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Tuesday, March 21, 2023

US and China help spark FTSE gains

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The FTSE Index has added 120 points to stand at 5648.

Strong economic data from China and the US along with debt reassurances from Europe has seen the FTSE 100 Index advance more than 2%.

Wall Street’s Dow Jones Industrial Average lifted 1.3% on Wednesday after a key survey in the US revealed private businesses added 93,000 jobs in November, against expectations of a 70,000 gain.

The upbeat report added to better-than-expected manufacturing figures from China, which showed the country’s resource-hungry boom picked up pace in November, and helped the FTSE 100 add 120 points to 5648 by mid-afternoon.

The top flight has faltered alongside other markets in recent sessions amid growing debt concerns in the eurozone. Government bond yields have risen sharply in countries such as Spain, Italy and Portugal – an indication of declining confidence in public finances.

But fears were eased today when the Portuguese government reiterated that it will not follow in the footsteps of Greece and most recently Ireland and require a European Union-led bail-out.

The euro has also taken a battering, sinking below 1.30 dollars to its lowest level in 11 weeks, but was up against all major currencies in trading today.

Mining and banking stocks recovered losses in recent days and filled the risers board, with Royal Bank of Scotland up more than 6% or 2.4p at 40p, while Lloyds was not far behind, lifting more than 5% or 3.4p to 63.8p.

China’s strong growth figures proved good timing for Prudential bosses as they met investors in London to outline their plans for Asia, including a target to double the value of last year’s operating profits by 2013.

Prudential shares jumped on the forecast, up nearly 6% or 32.5p to 600.5p, as chief executive Tidjane Thiam said the company aspired to be “one of the winners in the post-financial crisis world”.

Other risers included accountancy software firm Sage after it reported a bigger than expected 14% rise in annual profits and a return to sales growth over the second half of the year.

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