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Journalism of Courage
Britain’s top shares rose on Thursday,building on the previous session’s fragile rally,helped by positive earnings news from the retail sector.
Caution ahead of monetary policy meetings at the Bank of England (BoE) and the European Central Bank (ECB) on Thursday kept the index’s progress in check.
The BoE will keep interest rates ultra-low for a 30th month,but it would be a shock if it took further steps to stimulate growth,despite the growing risk of another recession.
The ECB is expected to signal a change in policy direction,halting an interest-rate rise cycle just five months after it started as the euro zone debt crisis weighs on the economy.
An uninspired opening this morning. With little or no news to give direction we can expect traders to sit on their hands as we wait for the BoE rate decision,Mic Mills,head of electronic trading at ETX Capital,said.
However with no real chance of any change things are unlikely to get too exciting after.
The UK benchmark index was up 15.79 points,or 0.3 per cent,at 5,334.38 by 0828 GMT,having jumped 3.1 per cent on Wednesday as investors sought out bargains among battered stocks.
The market was also looking ahead to an important speech by US President Barack Obama on Thursday,at 2300 GMT,when he is expected to outline plans to revive the faltering US economy.
Retailers found favour after slightly better than expected first-half results from Wm Morrison Supermarkets ,which sent the shares 1.4 per cent higher.
Tesco firmed 0.5 per cent,Next climbed 1.2 per cent,and Kingfisher ,ahead of results on Sept. 15,added 1.3 per cent.
Corporate earnings are still beating expectations and investors are starting to pay attention to strong earnings in a tough economic environment,Atif Latif,director of Trading Equities & Derivatives at Guardian Stockbrokers,said.
On the second line,Home Retail jumped 9.8 per cent after the household goods retailer issued a trading update which Seymour Pierce said was a little better than the market’s worst expectations,with the broker lifting its rating to hold.
Marks & Spencer was among the top blue-chip risers,up 3.6 per cent,on optimism about the British retailer’s plans to revamp its stores and some speculation about possible private equity interest in the stock.
Marks & Spencer declined to comment on the bid speculation.
M&A rumours also gave Tullow Oil a fillip,up 2.5 per cent,with talk doing the rounds again that China National Offshore Oil Corporation could be interested in the company.
Tullow declined to comment on the talk.
Broker downgrades were behind a number of stock movements on Thursday.
British chemicals firm Johnson Matthey dropped 0.9 per cent,while mid cap peer Victrex shed 3.7 per cent,the top FTSE 250 faller,with traders citing the impact of downgrades to underweight for both in a Morgan Stanley review of the European Chemicals sector.
Schroders slipped 1.6 per cent,the second biggest FTSE 100 faller,as Deutsche Bank cut its rating for the fund manager to sell in a sector review,saying investors should avoid exposure to Continental European retail assets under management.
Admiral was the biggest blue-chip faller,down 2 per cent after a domestic regulator launched a competition and consumer probe into the pricing of premiums in the sector.
