Markets: Global rebound gains momentum

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The rebound in world markets gathered pace yesterday as further soothing talk from the Fed helped dispel fears over its bond buying programme.

London’s FTSE 100 added 77.92 points or 1.3 per cent at 6,243.4, as investors who couldn’t sell fast enough last week started to worry about missing the boat for a move higher.

William Nicholls, a dealer at Capital Spreads, said: “This rally is starting to pick up momentum now, which may well continue in the near-term and beyond. All of a sudden there is a new air about the markets.”

Advertising agency WPP led the way, up 4.5 per cent on the back of positive comment from Bank of America. Its shares added 49p at 1,128p.

Engineering firm Smiths Group was another good performer after benefiting from an upgrade from UBS, which moved it from “neutral” to “buy”. Its shares jumped almost 4 per cent to 1,319p.

Power firm SSE also found favour with UBS, as the Swiss broker downgraded rival Centrica and named the Scottish stock its top pick in the sector. Perth-based SSE was 2.5 per cent higher, up 37p at 1,519p. Centrica added a more modest 4.4p at 359p.

Financial stocks were the day’s underperformers amid concerns about increased costs after EU leaders agreed a framework for “bailing in” large unsecured bond holders and depositors in the event of a bank failure.

The new rules, due to take effect in 2018, will involve the implementation of a deposit levy that is likely to raise costs and impact profitability.

The biggest top-flight fallers were Royal Bank of Scotland, down 4.5p to 275.8p; Standard Life, off 3.4p to 350.8p; and Barclays, which was 2.6p lower at 286.3p.

NEW YORK: US stocks climbed for a third straight session yesterday after comments from several Federal Reserve officials soothed concerns that the US central bank would begin to reduce its stimulus efforts in the near future.

The Dow Jones industrial average rose 114.43 points or 0.77 per cent, to end at 15,024.57 while the S&P 500 gained 9.94 points or 0.62 per cent, to finish at 1,613.21. The Nasdaq Composite added 25.64 points or 0.76 per cent, closing at 3,401.86.