Markets: US growth gives FTSE a boost

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THE Footsie closed above the 6,600 level yesterday after economic growth in the United States accelerated, stoking hopes that the global economy could continue to expand even if central banks ease back on stimulus.

The world’s largest economy grew by more than expected between April and June, accelerating to a 1.7 per cent annualised growth rate from the downwardly revised 1.1 per cent posted during the first quarter.

Marcus Bullus, trading director at MB Capital, said: “It is not a barn-storming reading by any stretch of the imagination, but shows further momentum in the world’s biggest economy. However gross domestic product is measured, such a strong number sent an instant buy signal to the markets.”

The FTSE 100 closed up 50.11 points or 0.8 per cent at 6,621.06, having reached 6,650.89 earlier.

Diageo, Scotland’s largest distiller, was the biggest riser in the Footsie, up 64.5p at 2,054p after new chief executive Ivan Menezes toasted the continued global growth of Scotch whisky.

Perth-based utility firm SSE was the biggest faller in the FTSE 100 – down 3.9 per cent or 63p at 1,575p – after the stock turned ex-dividend, meaning buyers will no longer be entitled to the next shareholder pay-out.

Price comparison website operator Moneysupermarket.com plunged 14.7 per cent or 31.2p to 181p after it failed to convince investors how it would regain the top position in ­Google’s search engine rankings.

Wolfson jumped 5.3 per cent or 7.75p to 153p, a day after the Edinburgh-based chip-maker’s half-year results, while non-executive director Glenn Collinson bought 33,300 shares at 154p.

Insurer Standard Life edged up 0.7p to 379.3p after launching another US fund with John Hancock Investments.

In New York, the Dow Jones index closed 21.05 points down, or 0.14 per cent, at 15,499.54, well off an intra-day high of 15,634.32, reached after the Federal Reserve said it would maintain its bond-buying in a bid to steady the US recovery.

There are mixed views as to the future of the Fed’s position, with its chairman Ben Bernanke indicating that the economy remains fragile, making it unlikely that there will be any rapid change in Fed policy which might force up interest rates.