Markets hinted that a round of quantitative easing from the European Central Bank is all but being taken for granted when its governing council meets this Thursday.
With US exchanges closed for Martin Luther King Day and few companies reporting, there was little to distract traders from thoughts of billions of euros flooding the market, even though the ECB has a history of erring on the side of caution.
David Madden, market analyst at IG, said: “In mid-afternoon trading the FTSE 100 made an attempt on 6,600, but it lacked the conviction to break through it.
“A sense of optimism still lingers around the trading floor as [ECB president] Mario Draghi is anticipated to reveal QE on Thursday. Draghi has been in denial about falling prices in the eurozone, but the confirmed state of deflation will force him to act.”
The FTSE 100 Index was 35.26 points higher at 6,585.53, despite the mining sector trying its best to drag it into the red as traders squared up their positions ahead of the Chinese GDP figures due overnight.
Glencore was the biggest faller, down almost 2 per cent at 247.7p, even though a shortfall from Chinese industry will increase the likelihood of stimulus there too. BHP Billiton was down 20p at 1,368p and Rio Tinto dropped 32.5p to 2,856p. Dixons Carphone topped the blue chip riser’s board ahead of its third quarter figures later this week. Its shares added 19p or almost 4.5 per cent to 446.5p as the retailer is expected to have been a beneficiary of the Black Friday phenomenon imported from the US.
Even though a market minnow, chocolatier Thorntons gave the retail sector a treat as it reported that sales from its branded shops grew 7.8 per cent on a like-for-like basis during December, amid strong demand for boxed chocolates, seasonal specialities and advent calendars.
The firm had already warned that weaker supermarket demand and teething problems at its new centralised warehouse would weigh on profits, so shares climbed 5 per cent even as it confirmed that total sales for its financial second quarter dropped by 6.4 per cent to £86.8 million. The shares added 4p to close at 83p.