FTSE continues rebound rally as Eurozone and Korea fears subside

The FTSE 100 has continued to rally in early trading after a strong two per cent gain yesterday with the UK’s top index fighting to claw back the 2.5 per cent plummet on Tuesday which plunged the index below the 5,000 points mark for the first time in seven months. Miners are the most popular and influential stock as the concerns that caused Tuesday’s fall shrink for the time being.

Kate Neilson
shareprices.com - Thursday, May 27, 2010

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One of BHP Bilton's coal operations

Eurozone debt fears look to have subsided momentarily and a lack of movement in Korea has quashed some unease about a potential break out of war between the North and South.

The Asian indices were hammered earlier in the week due to the eurozone and Korea tension worries, but positive economic figures from Japan, China, Singapore, Malaysia and Taiwan have eased the minds of investors as the region looks like it could be minimally affected by the debt problem plaguing Europe.

Japan’s economic report boasted a 40 per cent increase in export in April with cars and hi-tech gadgets responsible for the majority of the movement, helping Japan’s Nikkei surge after the week’s earlier falling exploits.

The US markets also helped buoy the FTSE as it reported strong results for new housing sales and manufactured goods, despite Wall Street remaining tentative over reports denied by China that it could pull investment out of European Government bonds.

MAN Group (LON:EMG) is the stand-out stock so far this morning after the hedge fund manager reported a drop in profits that was less than predicted. The Group announced profit before tax for the year had fallen by 27 per cent – the share price has grown over 8.5p, more than four per cent, just after 09:30BST.

Commodity stock also gained with metal prices firming on the back of Asian growth potential being upped by the recent economic figures. BHP Bilton (LON:BLT) was the best performing stock with a three per cent gain after the group revealed it was planning to up the price of coking coal from Japanese steelmakers by 10 per cent.

Copper miners including Eurasian Natural Resources (LON: ENRC) and Kazakhmys (LON:KAZ) also fared well with gains in excess of two per cent. And Antofagasta (LON:ANTO) also gained almost two per cent ahead of the release of its first quarter results.

The oil sector also posted gains with BP (LON:BP) up over three per cent with a gain over 14p at 09:50BST after it reported the ‘top kill’ operation to block the oil leak in the Gulf of Mexico was on target.

The banking sector started strongly first thing with gains in the region of 0.5 per cent for RBS (LON:RBS), Lloyds Banking Group (LON:LLOY), HSBC (LON:HSBA) and Barclays (LON:BARC) which is progressing with its plan to sell-off its non-core assets.

Other climbers helping haul the FTSE 100 higher are insurers and British Airways (LON:BAY) which sees its staff strike end tomorrow despite not reaching an agreement on the cabin crew dispute.

At 10:00BST the FTSE 100 index is up 1.12 per cent at 10:00BST at 5094.70.

 

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