Markets: Eurozone rate cut firms up Footsie

0
Have your say

Britain’s benchmark share index saw its highest close in a month yesterday, supported by the European Central Bank delivering some widely expected stimulus and upbeat numbers from the energy sector.

The ECB, faced with weak economic data and low inflation, trimmed interest rates in the eurozone – Britain’s biggest trading partner – in a move that pushed down bond yields and offered fresh support to stimulus-hungry equity markets.

Yusuf Heusen, sales trader at IG, said: “ECB president Mario Draghi has wrought the necessary magic to keep the FTSE 100 from slipping lower.

“Only time will tell whether the optimism generated by expectations of an easing-in policy will last, or whether [Friday’s] non-farm payrolls [in the US] will be sufficient to torpedo any good sentiment engendered by Mr Draghi.”

The Footsie closed up 9.42 points at 6,460.71 – its strongest close in a month. On the currency markets, the pound slipped slightly against the dollar, to $1.55, while rising a little against the euro, to be worth €1.19.

Among stocks, it was Glencore that led the way on the FTSE 100, after its takeover of Xstrata heralded the creation of a new natural resources giant, in the biggest mining deal in history. Shares in the vast mining and commodities group – called Glencore Xstrata – will begin trading on the London Stock Exchange today, valuing it in the region of £42 billion. Glencore was up 5 per cent, or 16.8p, to 331.2p.

Shell posted a better-than-expected rise in first-quarter profits helping its shares improve by 17.5p to reach 2,276.5p.

BSkyB saw shares add 6p to 851p after a forecast-beating hike in earnings for the first nine months of the financial year.

NEW YORK: On Wall Street, stocks closed higher last night, led by tech shares, after weekly jobless claims figures pointed to improving US labour market conditions a day before the monthly payroll report.

The Dow Jones industrial average closed up 130.71 points, or 0.89 per cent, at 14,831.66 while the Standard & Poor’s 500 Index ended up 14.85 points, or 0.94 per cent, at 1,597.55. The Nasdaq Composite Index was up 41.49 points, or 1.26 per cent, to close at 3,340.62.

Back to the top of the page