FTSE back to buy mode headed by commodity stocks
The UK’s blue-chip index has made a wide-scale rebound this morning along with indices worldwide after investor confidence was bolstered by reports out of the US that construction spending had leapt by 2.7 per cent in March – the biggest single month increase for ten years. Wall Street reacted positively with the Dow adding 226 points, the Nasdaq jumping 59 points and the S&P500 up 28 points. And global indices, including the FTSE 100, have rallied off the back of the confidence-affirming results to rebound from a few difficult sessions of trading.
Kate Neilson
shareprices.com - Thursday, June 03, 2010
UK shares have improved following the strong gains on the US and Asian markets with commodity stocks heading the activity on hopes of increasing the demand for raw materials. The FTSE opened with gains of 1.3 per cent and has continued to grow during the first two hours of activity to a high of 5262.48 - a growth of over 2.1 per cent - with miners edging the index higher. Eurasian Natural Resources (LON:ENRC) is the exceptional stock at 09:45BST with gains in excess of five per cent. And fellow mining stocks Kazakhmys (LON:KAZ) and Rio Tinto (LON:RIO) are in the region of four per cent gains, too.
And oil stocks also saw gains with under-fire BP (LON:BP) leading the way, trying to recover the double figure percentage losses it has made so far this week. The group, which is coming under more pressure from US Government over the oil leak in the Gulf of Mexico, is up by four per cent. However, experts are predicting the gains for the British oil giants will be short-lived as two US senators have called for BP to suspend its dividend payments until the full cost of the spill is known. Some reports are also suggesting the group may sell-off its Alaskan assets to pay for the clean-up operation. Competing oil stocks Petrofac Ltd (LON:PFC) and Cain Energy (LON:CNE) are up 3..6 per cent and 3.1 per cent respectively just before 10:00BST.
Also proving popular in morning trading is retail stocks. B&Q owner Kingfisher (LON:KGF) was the highlight sector performer after it announced Q1 retail profits this morning, edging the share price up 6p or 2.8 per cent.
Financials have also been in demand including Prudential (LON:PRU) which is one per cent up at 10:00BST after it announced the deal with AIG to buy its Asian business is now off. Prudential will have to pay AIG a termination fee of £152.6m after the US group refused to accept a lowered offer from the Pru which failed to get the full backing from shareholders to push through the deal anyway.
At 10:00BST the FTSE 100 is up 1.95 per cent at 5250.36 points with every stock on the index posting early gains.
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