FTSE lethargy following US disappointment

The FTSE closed down 2.7 per cent at 5675 on Friday following the announcement of the US' third quarter gross domestic product figures. Despite the subdued index, some gains were made in the market notably in the energy and insurance sectors.

Chris Bradshaw
shareprices.com - Sunday, October 31, 2010

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As the US announced a reserved 2 per cent rise in gross domestic product for the third quarter in 2010, the market response was wary. Despite performing as widely anticipated, there was some disappointment that further headway had not been made following a 1.7 per cent rise reported in the second quarter. The figures put further pressure on the Federal Reserve to publicise its plans for quantitative easing next week.

Scottish and Southern Energy revealed a planned 9.4 per cent hike in gas bills which drove the stock price up by 3 per cent. Centrica also rode the coat-tails of this news with related rises of 10.4 pence.

Insurance broker Panmure Gordon said yesterday that they expected the sector to firm following the third quarter results. This together with the market mood that the UK will avoid a so-called double dip recession led to Aviva adding 5.4 pence to its price with Legal and General following suit with a modest rise of 0.1 pence. In other areas of financial services, Lloyds Banking Group and the Royal Bank of Scotland rose 1 pence and 0.1 pence respectively.

British Airways surprised market watchers with a fall of 10 pence despite posting half year profits of £158 million for the first time in two years.

 

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