18th Jun 2015 15:54
LONDON (Alliance News) - The FTSE 100 ended higher Thursday, supported during the afternoon session by a positive open on Wall Street after a mixed set of US inflation and jobless claims data, while the Eurogroup meeting on Greek debt also got underway.
The blue-chip index ended up 0.4% at 6,707.88, while the mid-cap FTSE 250 closed down 0.2% at 17,678.90. The AIM All-Shared finished down 0.3% at 764.02.
European major indices also ended higher, with the French CAC 40 adding 0.3% and the German DAX 30 up 1.2%. When the European market closed, US equities also were higher, with the Dow Jones Industrial Average up 1.1%, the S&P 500 index up 1.0% and the Nasdaq Composite up 1.3%.
The US Commerce Department released a report showing a substantial increase in energy prices in the month of May but overall consumer prices in the US rising by slightly less than economists had expected. The report said the consumer price index climbed by 0.4% in May from April, after inching up by 0.1% in April. The month-on-month increase by the index was the largest such rise since February of 2013, but it was slightly short of the 0.5% increase expected by economists.
On an annual basis, US consumer price inflation was flat - 0.0%.
The month-on-month increase in consumer prices primarily reflected the rebound in energy prices, which surged 4.3% in May after falling by 1.3% in April. Gasoline prices soared by 10.4% during the month, more than offsetting a 1.2% drop in prices for electricity. Meanwhile, the report said food prices were unchanged for the second straight month, as prices for food away from home rose but prices for food at home declined.
Meanwhile, the US Labor Department released a report showing a bigger-than-expected decrease in first-time claims for US unemployment benefits in the week ended June 13th. It said initial jobless claims fell to 267,000, a decrease of 12,000 from the previous week's unrevised level of 279,000. Economists had expected jobless claims to dip just slightly to 275,000.
The dollar remained under pressure following the release of the US data. It had declined against the pound and the euro on Wednesday after the Federal Reserve offered no explicit guidance indicating that it will soon raise US interest rates from zero.
Many economists thought the Fed would lay further groundwork for a rate hike as soon as September, but policy makers remained reluctant to tip their hand, even though US economic activity seems to be picking up after a second consecutive rough winter.
The pound and euro were both higher against the dollar at the European equities close, at USD1.5877 and USD1.1395, respectively.
The Fed also cut its forecast for US GDP this year to 1.8% to 2%, down from 2.3% to 2.7%, reflecting the cold and stormy winter weather. The US economy has improved since the winter, but analysts say the Fed is keeping a close eye on developments in Europe, where a Greek default could de-stabilize the euro area.
Investors attention late Thursday turned to Luxembourg, where the Eurogroup meeting was getting underway with the Greek debt situation as its main topic. Greece is hoping to attain consensus with eurozone finance ministers, Greek Finance Minister Yanis Varoufakis said as he arrived for the meeting.
"The purpose is to replace costly discord with effective consensus," Varoufakis said. He pointed to a past statement, in which European Central Bank President Mario Draghi said that "for the euro to succeed anywhere, it must succeed everywhere."
"We think he's absolutely spot on, and today, we are going to be presenting the Greek government's ideas along those lines," Varoufakis said.
Meanwhile, Greek government spokesman Gabriel Sakellaridis told the Mega television channel that there was no chance of capital controls being implemented and that bank deposits are "safe".
On the London Stock Exchange, miners were amongst the best performers in the FTSE 100 as commodity prices, including gold, rose as the dollar weakened after the Fed's policy announcement. Gold rose to USD1,196.06 an ounce, a level it hasn't seen since late May.
Randgold Resources, up 2.7%, Anglo American, up 2.6%, BHP Billiton, up 2.4%, and Fresnillo, up 2.1%, were amongst the biggest gainers in the FTSE 100.
In the FTSE 250, Premier Farnell and Poundland Group were the worst performers, down 5.5% and 3.5%, respectively. Premier Farnell reported growth in sales but warned it is continuing to battle adverse exchange-rate movements, particularly the weakness of the euro.
Meanwhile, Poundland's profit slightly missed analyst expectations. The discount retailer also revealed slower growth in the first quarter of its current financial year compared with the prior year, and said consensus figures for full-year profit will be lowered.
In the UK corporate calendar Friday, N Brown issues a first-quarter trading statement, while Auto Trader Group releases full-year results.
In a light economic calendar Friday, German producer prices are due at 0700 BST, eurozone current account is due at 0900 BST and UK public sector net borrowing is at 0930 BST.
By Daniel Ruiz; [email protected]
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Anglo AmericanBHP Billiton PLCAuto TraderRandgold ResourcesFresnilloBrown GroupPFL.LPLND.L