FTSE:5,102.17 (+157.73) Mid-250:9,567.84 (+141.91) Small Cap:2,727.14 (+17.44)
UK STOCKS rallied yesterday, snapping a five-day slump on the benchmark FTSE 100 Index, amid hopes policy makers are examining measures to shield banks from the sovereign-debt crisis.
The FTSE 100 Index advanced 3.2 per cent in London.
Markets rallied “on reports that European finance ministers were examining ways of co-ordinating large scale recapitalisations of banks on a local level in an attempt to convince markets that governments would do all they could to safeguard and support the European banking sector,” said Michael Hewson, a markets analyst at CMC Markets in London.
The FTSE 100 on Tuesday closed below 5,000 for the first time since July 2010, as policy makers failed to reassure investors they can contain the European debt crisis.
The gauge lost 14 per cent in the third quarter, its biggest drop since 2002, amid concern that Greece’s debt woes will spread to other countries in the region.
The Bank of England should consider easing monetary policy if the outlook for the economy deteriorates further, the International Monetary Fund said. The IMF cut its 2011 and 2012 UK growth forecasts last month as threats from Europe’s sovereign-debt crisis weigh on the economy.
US Services Stocks extended gains after a gauge of US service industries topped estimates, tempering concern about a slowdown in the world’s largest economy.
Rio Tinto advanced 7.1 per cent to 2,905.5p. Xstrata rose 7.1 per cent to 818.2p, both after five days of declines.
A gauge of miners in the Stoxx Europe 600 Index was the second-best performer among the gauge’s 19 industry groups.
Sainsbury climbed 3.6 per cent to 284.6p after saying sales for the second quarter excluding petrol and including value added tax, rose 1.9 per cent.
EnCore Oil rallied 64 per cent to 74p , the most since June 2010, as Premier Oil, a London-based oil explorer, agreed to buy EnCore for £221 million to add reserves and production in the North Sea.
BTG rose 11 per cent to 265p as the drug maker said 2012 sales may beat analysts’ estimates.
Supergroup slumped 30 per cent to 707p, its biggest fall ever, after saying profit will decline by as much as £9 million this year due to problems with its warehouse system. – (Bloomberg)