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London equities rose on Friday with miners leading an attempt to end a volatile week on a firmer footing. FT.Com reports that the FTSE 100 was 36 points higher at 5,443.3, an advance of 0.7 per cent. The FTSE 250 was higher by 27 points, or 0.3 per cent, at 8,567.9.
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The bouts of heavy selling seen across the week on fears over the outlook for global growth left heavily-weighted resource stocks looking undervalued. Kazakhstan-based ENRC rose 3.4 per cent to £10.83, compatriot Kazakhmys was 2.3 per cent stronger at £14.42 and BHP Billiton gained 1.3 per cent to £17.50.
Oil companies received a boost as crude prices established themselves further over the $140 a barrel mark. Geopolitical worries pushed Nymex West Texas Intermediate $1.51 higher to $143.16, back towards the record high of $145.85. BG Group rose 3.2 per cent to £11.70 with BP 2.2 per cent stronger at 552p and Royal Dutch Shell rising 1.6 per cent to £19.40.
Financial stocks also made gains after a fraught week for the sector ended with hopes that the US government was prepared to protect mortgage lenders Freddie Mac and Fannie Mae. Such a move, trailed in reports in the New York Times , looked set to prevent further negative sentiment toward mortgage lenders from spreading around the world under the lingering shadow of the credit crisis.
Lloyds TSB rose 1.7 per cent to 297.8p, lifted by reports it had pulled out of discussions about a possible merger with German rivals Dresdner and Postbank. That, in turn, sparked speculation that Lloyds could bid for a UK rival, such as Alliance & Leicester, up 8.6 per cent at 249.3p, or Bradford & Bingley, up 11 per cent at 50.3p, but still under the 55p per share price of its pending rights issue.
There was also respite for Taylor Wimpey after Building magazine reported the troubled developer was in talks to secure a £500m investment from private equity. Shares in the housebuilder rose 22 per cent to 42.8p.
DAILY TECHNICAL COMMENT
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MARKET DATA
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OVERSEAS MARKETS
Asia Pacific shares rose and looked like they would end the week slightly higher - the first such increase for four weeks - as miners and energy stocks advanced on the surging price of oil.
Fears about further credit losses that dominated early trading subsided as speculation mounted that the US government would not allow the country’s two big providers of mortgage finance, Fannie Mae and Freddie Mac, to go bust.
Overnight in New York, the S&P 500 closed up 0.7 per cent at 1,253.40. The Dow Jones Industrial Average also rose 0.7 per cent to 11,229.02.
COMMODITIES
Oil prices rose yesterday as Brazil's biggest oil company threatened to go on strike next week. When Petrobras employees refused to work for five days in 2001, oil production fell sharply and Brazil had to import extra oil. Oil also got a boost from news that the main militant group in Nigeria's oil rich Niger delta was abandoning a ceasefire in response to Britain's offer to help tackle lawlessness in the area. Militants have helped cut Nigeria's oil exports by more that 20 per cent since 2006 by attacking pipelines and other installations.
| Commodity | Last Close |
|---|---|
| Gold London PM | $939.50oz |
| August Brent crude | $142.03/barrel |
| LME 3-mth Copper | $8,278.50/tonne |
| Baltic dry index (freight) | 9,313 |
| December carbon | €26.68/unit |
FOREIGN EXCHANGE
The Israeli shekel tumbled from a near 12-year high against the dollar yesterday after the Bank of Israel said it was stepping up its purchases of foreign currency. The central bank said it was lifting daily purchases from $25m to $100m to boost its reserves. Meanwhile, sterling lost ground on more bad news from the housing market, and the Bank of England kept interest rates on hold.
| £1 EQUALS... |
|---|
| €1.2524 |
| $1.9736 |
| Sfr2.0297 |
| ¥211.348 |
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
