Wednesday 20 June 2018

FTSE extends gains

London, June 12, 2007

Britain's index of 100 leading shares rose as data showing the UK inflation rate had slowed to its weakest level in seven months soothed nerves a day after the Bank of England warned of further rate increases.

Consumer prices gained 0.3 per cent in May, a slower rate than expected, which took the annual rate down to 2.5 per cent from 2.8 per cent in April.

"The FTSE has liked what it's seen," said David Scott, a senior stockbroker at Redmayne-Bentley. "It's focusing on the short term rather than looking at the long term. It comes on the heels of the warnings last week that the inflationary beast ... has not yet been slain."

Bank of England Governor Mervyn King said on Monday British interest rates may need to rise again if signs of price pressures and capacity constraints stay high.

At 0857 GMT, the FTSE was up 0.2 per cent after having started trade in negative territory as King's comments weighed. The FTSE had lost 2.4 per cent the week before on fears that interest rates globally were headed higher.

Also boosting the market, Britain's Imperial Chemical Industries rallied 2.5 per cent as traders cited market talk of a possible bid from German rival BASF, and interest from Akzo Nobel. ICI declined to comment on the rumour.

But it was Rolls Royce that was the top performer with a 3 per cent gain on a series of positive brokerage notes ahead of the Paris air show, traders said.

Real estate stocks also came back in focus with traders saying bid rumours surrounding Hammerson had resurfaced, buoying the sector. Hammerson rose 2.1 per cent, Liberty International was up 1.7 per cent and Segro gained 1.8 per cent.

On the downside, HBOS fell 4.3 per cent after the Britain's biggest mortgage lender said its earnings growth was on track this year but warned its net share of new mortgages had slumped. Elsewhere in the sector, Northern Rock fell 2.7 per cent.

In oils, BP was cited as one of four companies short-listed to partner with Gazprom < in a $3.7 billion liquefied natural gas plant on Baltic Sea, the Russian gas monopoly's deputy chief executive said. BP was up 0.8 per cent.

Meanwhile a top executive said Royal Dutch Shell  expected to seal long-term liquefied natural gas contracts this year for its Indian Hazira import terminal, already running full-throttle on spot cargoes. Reuters

Tags: FTSE | HBOS |


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