FTSE surges higher as hopes pinned on US economic policy

The FTSE 100 index saw violent swings up and down on Tuesday as investors firstly saw stocks plummet before recovering to finish in positive territory for the first time in seven days. The bluechip index closed for the day up nearly 96 points at 5164, an increase of 1.9 per cent on the day.

Chris Bradshaw
shareprices.com - Tuesday, August 09, 2011

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ARM Holdings

The FTSE 100 had taken a further dive lower on Tuesday but speculation that the US Federal Reserve may be considering an earlier than expected injection of stimulus into the economy perked up investors and led to a 340 point swing upwards for the bluechips.

However, although there appeared to be a glimmer of hope for the first time in days, analysts were quick to point out that the extended range could mean that investors were still uncertain and the index could see further significant drops yet.

Defensive ARM Holdings and engineering group Weir were two of the highest risers in the blue chips with gains of 7.7 and 7.8 per cent, after sustaining heavy losses in recent days.

Banks had a better day following recent sharp declines after some of the big part-nationalised groups announced disappointing half yearly results. HSBC was one of the banks posting strong results with a climb of 1.34 per cent whilst peer Barclays also rose, adding 2.22 per cent. Lloyds Banking Group and Royal Bank of Scotland still struggled to shrug off the losses they reported so far this year with drops of 2.12 and 3.85 per cent respectively.

 

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