Resource stocks counter banks to push FTSE 100 past 5,700

Wed, 13th Oct 2010

Blue chip stocks collectively gained in value enough to push the index of London's top stocks to levels not seen since April of this year. The FTSE 100 gained a very substantial 1.51 per cent as resource and other stocks responded to upbeat economic data from Asia and the possibility of further QE in the US. A fall in the value of banking stocks failed to dampen investor sentiment, the FTSE 100 closed at 5,747.34, up 85.76 points.

Yesterday the US Federal Reserve made further suggestions that it will expand its quantitative easing program to support the flagging US economic recovery. In addition positive data from Asian economies served to boost investor confidence which in turn boosted demand for commodity stocks.Vedanta Resources, Anglo American, Rio Tinto, Xstrata, Petrofac Ltd., Antofagasta and BHP Billiton all climbed over 4 per cent through Wednesday's trading session. A number of other stocks including Man Group, Wolseley and ICAP also gained over 4 per cent in value.On the flipside the banking sector proved to be an exception. Standard Chartered moved down by 1.76 per cent, Barclays lost 0.7 per cent and Royal Bank of Scotland Group moved down by 0.15 per cent. Losses amongst banking stocks are in response to the news that Standard Chartered is due to tap markets for £3.3bn to boost its capital ratio. Mid-cap stocks also had a robust trading day. The FTSE 250 index broke past the 10,900 level, gaining 1.38 per cent or 148 points. Stellar performers include Kesa Electricals, up 9.54 per cent and Bodycote, up 9.06 per cent.
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