Markets play down US data revision

The London market made cautious gains yesterday as downbeat US economic data reassured investors that the Federal Reserve would not scale back stimulus measures any time soon.

The FTSE 100 Index added 29.82 to close at 6,656.99 as a small revision to the US growth rate, from 2.5 per cent to 2.4 per cent, appeared to back the case for money printing while falling short of outright disaster for the world’s largest economy.

David Madden at IG said: “The hangover from the Japanese rout appears to have been relatively short-lived, with European markets staging a meagre rebound on US macro data. The mining sector was in the driving seat, with shares in Fresnillo adding 6.6 per cent on the back of higher precious metal prices.”

Fresnillo added 67p or 6.2 per cent to 1,156p, while fellow metals miners Randgold Resources and Polymetal International were close behind on the risers’ board, up 284p to 5,225p and 32p at 690p respectively.

Retailer Kingfisher was under pressure early on when it reported that retail profit tanked by 29.2 per cent in the quarter. But bargain-hunters soon stepped in on the back of positive broker comments. The group ended up as the top flight’s biggest riser, up 21.9p or 6.7 per cent at 349.7p. But other retailers remained in the red, led by supermarket Tesco, off 5.8p to 367.3p after a broker downgrade.

Utilities firms littered the fallers’ board for the second day in a row after the Treasury closed a loophole allowing gas and electricity distribution companies to claim tax relief on costs already met by other businesses.

National Grid dropped 8.5p to 788.8p; Scottish Gas parent Centrica was down 2.6p to 376p and SSE shed 4p to 1,565p. However water group Severn Trent edged 14p higher to 2,049p after full year results suggested a valuation of at £8 billion for the takeover target.

NEW YORK: Wall Street rebounded on the same tepid economic data that eased concerns over the US Federal Reserve.

The Dow Jones industrial average was up 23.26 points, or 0.15 per cent, to finish at 15,326.06 while the Standard & Poor’s 500 Index closed up 6.16 points, or 0.37 per cent, at 1,654.52. The Nasdaq Composite Inde ended up 23.78 points, or 0.69 per cent, at 3,491.30.