BETTER than expected consumer confidence data out of the US gave the FTSE 100 a much-needed boost yesterday afternoon, after Asia’s sell-off – driven by concerns of heightening geopolictical tension on the Korean peninsula – infected the London markets in early trading.
“Following the release of the US consumer confidence data there was an immediate return to traders buying riskier equities. The oil, financial and mining sectors that were all suffering in the morning session traded much higher with this new wave of demand,” said City Index market strategist Joshua Raymond.
The index ended 1.1 per cent, or 46.43 points, higher at 4,411.72. Volumes on the FTSE 100 were at some 70 per cent of the index’s 90-day average daily volume.
The UK benchmark is down 0.5 per cent this year, but has rallied 27.5 per cent since hitting a six-year trough on 9 March.
Energy stocks added most points to the UK index, with BP, Royal Dutch Shell and Tullow Oil rising between 0.9 per cent and 1.2 per cent.
Tobacco stocks British American Tobacco and Imperial Tobacco advanced 3.9 and 2.7 per cent respectively, while food retailers Tesco, Wm Morrison Supermarkets and J Sainsbury rose between 1.8 per cent and 3.5 per cent.
In the banking sector, Barclays, HSBC and Standard Chartered put on 0.7 per cent to 1.7 per cent, paring earlier losses. However, Royal Bank of Scotland and Lloyds Banking Group stayed in negative territory.
Miners were also generally firmer, with Eurasian Natural Resources, Fresnillo, Lonmin, BHP Billiton and Xstrata up 0.9 per cent to 6.8 per cent.
Rio Tinto eased 0.6 per cent. The miner has agreed to cut key iron ore prices to Japanese steelmakers by a third in this year’s first contract, setting a benchmark analysts say China will almost certainly reject after six years of surging prices.
Among individual movers, Rexam, the world’s largest beverage can maker, rose 3.4 per cent after Goldman Sachs added it to its “conviction buy” list.
Shares in Wood Group rose 5.9 per cent as traders noted vague speculative interest in the mid cap oil services group.
Thomas Cook shed 4.3 per cent. Its debt-laden parent Arcandor said talks with rival Metro about a tie-up of their department store chains were still on, pouring cold water on speculation it had walked away from a possible deal.