FTSE jumps after Wall Street rally; miners, materials lead

Josephine Mason

Shares in the United Kingdom jumped nearly one percent on Thursday as the Wall Street Assembly expanded across Europe after the Federal Reserve Chairman suggested it was nearing the end of its tightening cycle and strengthened the investor's appetite for assets deemed to be more risky.


FTSE 100 <.FTSE> increased by 0.8 percent at 0955 GMT and the average value index <.FTMC> increased by 0.6 percent.

Fed Chairman Jerome Powell said on Wednesday that the bank's interest rate is now "just below" estimates of a level that neither curtails nor increases the healthy US economy.

Higher interest rates mean higher borrowing costs, which can reduce economic activity and consumption.

The blue chips were still on their way to their second direct monthly loss because there are still concerns about the outcome of divorce talks between Prime Minister Therese Maye and Brussels and Brexit's impact on the British economy. Parliament will vote on the agreement on 11 December.

Investors were also cautious of the planned meeting of US and Chinese G20 presidents in Argentina over the weekend, hoping that the two biggest economies in the world could resolve the prolonged trade conflict at a time of slowing global growth.

The British government has looked at Brexit's various options on Wednesday and reinforced the warning by Central Bank Governor Mark Carney that there has been a serious interference with the UK economy in the event of an unenviable withdrawal from the EU.

The market also had a positive message following the latest central bank stress test of seven British banks and building societies that have shown they can withstand the inappropriate Brexit without having to limit lending.

"All banks have gone through fairly comfortably in the most extreme scenarios, even though Lloyds was perceived as the most vulnerable due to the high exposure of credit cards and mortgages in the UK," said Michael Hewson, principal analyst at CMC Markets UK.

The result was broadly in line with expectations and bank shares <.FTNMX8350> were 0.6 percent. Lloyds and RBS were 0.9 percent higher.

Stock extraction <.FTNMX1770> some of Powell's biggest recipients were on the back of higher prices of base metals. The sector increased by 2.4 percent and the best day in two weeks.

Interests in supplying copper have also lifted the Antofagast mineral sector , an increase of 4.8 percent and topping the FTSE 100.

Investors have invested in stockpiles of building materials following Fed commentary comments and have suggested that slower-than-expected rises in rates may boost the US housing sector.

Sector <.FTNMX2350>, which includes CRH and Melrose Industries was 3.1 percent on the way to its best day since April 2017.

Ashtead Group , which leases equipment such as excavations and construction tools, gained another 3.7 percent, after reports that CEO Geoff Drabble will resign next year.

Most of the action was on medium and small Caps with Intu losing more than a third of its market limit and hit a record low after a consortium led by Vice President John Whittaker left his plan to buy a British group of shopping malls.

The news sent fresh shakes to the already worsened sector and dragged their opponent Hammerson About 4.8 percent lower.

In other ways, revenues have boosted Britvic's non-alcoholic beverages and the Greene King pub , which was 6 percent and 5.6 percent.

"If Greene King can continue to manage its margins and maintain decent sales, investors will surely get rounds when the results are announced for the full year," said Julie Palmer of Begbies Traynor.

Senior was canceled by JPMorgan's improvement.

Investors in Dignity Funeral Service Provider (CMA) has begun a funeral services survey after finding out problems with high price fluctuations that have hit "people in their most vulnerable."

Shares have fallen by 15 percent since June. Peel Hunt lowered his ratings to sell off the news.

"The best scenario is that CMA will only end up demanding greater price visibility, but the tone of the statement suggests that more money will be needed," analysts said in a note.

(Josephine Mason's News)

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