MONDAY MARKET CLOSE: Upbeat Fed expectations lift FTSE 100

The London market recovered from a faltering start to make solid gains ahead of minutes from the US Federal Reserve which are widely expected to be supportive of equities.

Michael Hewson, chief market analyst at CMC, said: “After an initially slow start European markets finally threw off some of their caution and pushed higher, playing catch up with Friday’s US move ahead of the release of the latest Fed minutes later in the week.”

The FTSE 100 Index added 30.02 points to close at 6,723.46, as the strategic deal between Lloyds and Aberdeen Asset Management gave the financial sector a lift.

Aberdeen was up almost 15 per cent following its all-share acquisition of Scottish Widows Investment Partnership. Its shares climbed 62.9p to 489.7p. Lloyds Banking Group added 1 per cent at 76.17p, Barclays was up by a similar degree at 251.4p and Standard Chartered cheered almost 2 per cent to 1,482p.

Miner Vedanta Resources was also on the risers’ board, up 33p at 988.5p as broker Credit Suisse said it remained attractive despite recent downgrades.

And engineering stocks were buoyed by news of airline deals in the Middle East. Rolls-Royce, which will be making the engines for many of the planes, was up 9p at 1,233p.

Oil services firm Petrofac was the worst performer in the top flight, as shares tumbled 16 per cent following a cautious outlook statement. It was down 239p at 1,200p.

Outside the FTSE 100, shares in engineering and IT firm Aveva were almost 8 per cent lower despite an increase in first-half profits. Analysts said slower-than-expected growth in its enterprise solutions division was to blame for a decline of 201p in the stock, to 2,365p.