Brokers help bring back the buyers

Positive broker comments boosted a number of blue chip stocks yesterday and helped the FTSE 100 start the week on the front foot.

The index closed 22.23 points higher at 6,330.49, as analysts also appeared increasingly optimistic that US Federal Reserve members will play down the prospect of an imminent cut in money printing this week.

Michael Hewson, senior analyst at CMC Markets, said: “The best performers have come about largely as a result of some positive broker comment, though Vodafone shares are finally arresting their recent slide as merger and acquisition speculation in the sector gives the stock a positive read across.”

Vodafone had suffered in recent sessions as analysts fretted that its interest in Kabel Deutschland signalled the start of an acquisition spree. But shares rose 2.65p to 182.7p as rumours of a €70 billion (£60bn) swoop by AT&T for Spanish rival Telefonica reminded investors of the possible payout should Vodafone manage to sell its US business.

Investment vehicle Resolution was on the receiving end of a positive broker update from JP Morgan. Its shares were 8p ahead at 283.1p as the broker revised its target price upwards.

And consumer goods giant Reckitt Benckiser was on the up after Citigroup said the stock was undervalued. Its shares were 100p stronger at 4,679p.

Retail stocks were also doing well, with Next up 32p to 4,585p and Sainsbury’s 5.7p higher to 375.5p in the week that the supermarket chain plans to relaunch fashion brand Tu.

But Primark owner Associated British Foods, was 50p lower at 1,732p after broker Nomura downgraded its price target on the stock due to the volatile pricing outlook for the company’s sugar business.

NEW YORK: US stocks rose last night but ended off their highs as investors speculated on the outlook for possible changes in the Federal Reserve’s stimulus programme at a meeting later this week.

The Dow Jones industrial 
average closed up 109.90 points, or 0.73 per cent, at 15,180.08 while the Standard & Poor’s 500 Index was up 12.34 points, or 0.76 per cent, to close at 1,639.07. The Nasdaq Composite Index ended the day up 28.58 points, or 0.83 per cent, at 3,452.13.