FTSE surges to nine-month high on hopes of further stimulus from Fed

BRITAIN’S top share index closed at a new nine-month high yesterday, led by an energy sector buoyed by hopes that the US Federal Reserve would continue to provide stimulus for the world’s biggest economy.

Oil & Gas and basic materials, which rise and fall with optimism over the economic outlook, combined to added over 13 points to the FTSE, which rose on expectations the Fed will launch a fresh round of $45bn in bond buying a month, bringing the monthly pace of asset purchases to $85bn,

The FTSE 100 index closed up 20.88 points, or 0.4 per cent at 5,945.85, its highest close since March, and marking a nine-month high for the index.

The energy sector added nine points to the index as oil rose to around $110 a barrel, with investor anticipation of renewed monetary stimulus outweighing plentiful supply.

The materials sector also prospered, with miner Anglo American among the FTSE 100 leaders, ahead by 2.7 percent as it was lifted by a Barclays upgrade to equal weight from underweight.

The rise took gains for December to 1.3 per cent less than halfway through the month, despite recent downgrades to growth outlooks across the UK and the euro zone.

A rise in December would be the 10th straight year of gains in the last month of the year, and the index rose for the sixth straight day for the first time this year.

However, the recent gains have been made in thin volumes, and while the index closed above 5,932, the intraday high in September, other key levels need to be passed before it can hit 6,000.