Confidence in economy boosts FTSE

A WAVE of positive trading updates pushed the FTSE 100 back towards seven-week highs as the UK’s economic recovery appeared to be gathering pace.

The pickup in the economy – boosted by quantitative easing and the Funding for Lending Scheme – is expected to be confirmed this morning by second-quarter gross domestic product (GDP) data showing the pace of expansion doubling to 0.6 per cent between April and June.

Goldman Sachs and UBS have recommended long bets on British equities, leading investors to take their most-optimistic stance on the market in more than a decade, according to the latest survey from Bank of America Merrill Lynch.

Edward Bland at Duncan Lawrie Private Bank said: “We have turned the corner now in the UK and it’s amazing what a stimulus to the housing market can do for raising confidence.”

The Footsie closed up 22.99 points or 0.4 per cent at 6,620.43, bouncing back from a dip during the afternoon session when unconfirmed rumours of a credit rating downgrade for Germany curtailed the rally.

The heatwave helped B&Q-owner Kingfisher return to growth in the UK and pushed the stock up 11.8p to 396.6p.

Pubs operator JD Wetherspoon was 12.3 per cent higher, up 82p to 750p, after like-for-like sales rose by 3.5 per cent in the 11 weeks to 14 July, leaving it on track for profits ahead of City forecasts in the year to July.

Budget airline EasyJet, which had fallen on Tuesday after a target price cut by broker HSBC, set an intra-day record high before closing up 49p at 1,385p following a positive trading update.

The news boosted travel agency TUI Travel, up 13.1p to 377.7p, while British Airways-owner International Airlines Group was 5.5p higher to 291.4p.

NEW YORK: Wall Street indices mostly fell last night, as losses in US utility and commodity shares more than offset gains in the tech sector on Apple’s solid earnings.

The Dow Jones industrial average slipped 25.50 points, or 0.16 per cent, to end at 15,542.24 while the broader Standard & Poor’s 500 Index declined 6.45 points, or 0.38 per cent, finishing at 1,685.94. The Nasdaq Composite Index inched up just 0.33 of a point, or 0.01 per cent, to close at 3,579.60.