US: Recovery hopes boost FTSE 100
- Credit: PA
The FTSE 100 Index extended its recent rally today as investors pinned their hopes on a continued recovery for the world’s biggest economy.
The festive optimism was driven by Friday’s revisions to previous GDP figures in both the UK and United States, where the economy grew at an annual rate of 4.1% rather than the previous estimate of 3.6%.
With investors also benefiting from the removal of uncertainty after the Federal Reserve’s announcement on tapering last week, the FTSE 100 Index climbed another 32.6 points to 6639.2. It represented the fourth day in a row of gains.
Alongside the US recovery, figures on Friday showed the UK is now 2% away from its pre-crisis level at the start of 2008, rather than 2.5% as previously thought.
The festive cheer failed to reach the retail sector, where a number of high-profile stocks have fallen on fears that the sector could be left with a profits hangover after heavy discounting in the run-up to Christmas.
Marks & Spencer, which reduced some prices by 30% over the weekend, was 3.25p lower at 441.75p, while Sports Direct International declined 1.25p to 716.75p. Outside the top flight, Carphone Warehouse fell 14p to 264p, a drop of 5%, and JD Sports Fashion eased 50.5p to 1443.5p.
Chip designer Arm Holdings was the biggest riser in the FTSE 100 Index after tech giant Apple reached a deal to bring the iPhone to China Mobile, the world’s biggest phone carrier.
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Arm shares jumped nearly 3%, up 27.5p to 1095.5p, as its technology helps power Apple’s iPhone and iPad.
Meanwhile, there was a disappointing debut for Royal Mail as a top flight company. Its shares were 8.5p lower at 582.5p on its first day in the FTSE 100 Index, although the stock remains more than 75% higher than its flotation price of 330p in October.
Madame Tussauds owner Merlin Entertainment, which joined the FTSE 250 Index as part of the same reshuffle, fell 8.65p to 357.35p.
Elsewhere, shares in Hovis and Mr Kipling firm Premier Foods slid 8.5p to 122p following its confirmation that it is considering a £300million rights issue as it looks to tackle a debt mountain of around £1 billion.
Premier said a review of its capital structure was ongoing and stressed that no final decision has been made about a cash call to shareholders.