US unemployment data and commodity rally puts FTSE above 5600
The FTSE 100 has hit new four-month highs at the beginning of Friday’s session with better-than-expected US job data eliminating fears of a double-dip recession and commodity and bank stocks hauling the index up on the back of strong gains on Asian and US markets.
Kate Neilson
shareprices.com - Friday, September 17, 2010
At 10:23GMT, the UK’s blue-chip index is 1.1 per cent higher with a gain of almost 61 points to hit a value of 5,600.92.
The London top index followed in the footsteps of strong gains on the Nikkei, which pushed 0.8 per cent higher. Wall Street ended Thursday flat after forecast-beating unemployment data helped the market regain losses made earlier in the session.
Investors looked to Asia to gain direction on commodity stocks which are back in favour thanks to improved metal prices.
Kazakhmys (LON:KAZ) is the top mining gainer, up 2.7 per cent, with Vedanta Resources (LON:VED) and Antofagasta (LON:ANTO) positing gains in excess of two per cent, too.
As well as base metal prices rising, gold has hit a new all-time record high and silver is at a new 30-month high.
This helped nudge precious metal miners including Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) higher at the rate of 1.3 and 0.9 per cent respectively.
Crude prices also rebounded, putting energy firms back into favour as well.
BP (LON:BP) is 0.5 per cent higher after confirming yesterday that the leaking oil in the Gulf of Mexico will finally be plugged on Sunday.
Along with commodity pushes, banks had a turnaround in fortunes as sentiment in the US economy growing improved risk appetite for investors.
Royal Bank of Scotland (LON:RBS) was the standout sector climber, pushing 1.5 per cent ahead. Lloyds Banking Group (LON:LLOY) is gaining at the rate of 0.6 per cent and HSBC Holdings (LON:HSBA) is also up by 0.5 per cent.
The outstanding stock of the day is Invensys (LON:ISYS).
The engineering group announced its rail arm had signed a deal with Chinese manufacturer CSR to supply its control and signalling system Westrace in China. The improved exposure in Asia buoyed investors, sending the share price soaring over six per cent higher.
At the opposite end of the FTSE, 3i Group (LON:III) has shed one per cent of its share price after the private equity firm announced the departure of top dealmaker Jonathan Russell and also received a downgrade to “neutral” from “add” from Evolution Securities.
The index could change after midday with US consumer price data due for release at 12:30GMT.
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