U.K. Market Buoyed by U.S. Gains

Ivaylo
27 Sep, 2006
New York City

Leading stocks traded in positive territory at midday, bolstered by advances across the mining sector, while expectations of a renewed bid approach for EMI from Warner Music was adding to the pervading optimism. The market was also assisted by continued strength across the Atlantic, expected to open higher again today. By mid-day, the FTSE 100 index was up 53.6 points at 5,927.2, with only UK small caps in the red.

[R]9:30AM The FTSE 100 higher by mid-day on Wednesday on U.S. gains overnight.[/R]
The FTSE 100 index was up 53.6 points at 5,927.2, by mid-day on Wednesday. The catalyst has been recent strength in global markets, particularly the US, where the S&P 500 hit a six-year peak overnight.

Advancers

Miners led the advancers as investors bet that strengthening prospects for US growth would help protect metals prices. Antofagasta gained 3.6%, Anglo American was 3.25 higher, Rio Tinto advanced 2.95 and BHP Billiton rose 2.8%. Fund managers booked gains in line with the strong showing from world equities. Man Group was 1.4% and Amvescap rose 1.1%.

Smiths Group, the defence contractor, rose 0.9% after a rise in pre-tax profits. United Utilities was 0.5% stronger at as the water group underlined its existing profit guidance.

Decliners

Compass Group, the contract caterer, slumped 2.1% in the wake of its statement that it expected revenue growth rates to slow. Standard Life lost 1.2% after the newly-floated life assurer’s debut figures to the City left investors disappointed. Interim operating profits missed analysts’ forecasts after an increase in charges related to customers cashing in their policies.

Several leading stocks also started trading ex-dividend. They included Resolution, the life assurance consolidator, dropping 1.3%, and Northern Rock, the bank, slipping 0.5%.

Corporate news

EMI Group climbed 4.26% after the Times newspaper reported that Warner Music officials have held talks with some of its UK rival''s biggest investors in a bid to persuade them of the merits of a merger of the two music labels.

Economic news

The UK labour market is set to weaken in coming months, reducing household spending and possibly curtailing inflation and economic growth, according to the Bank of England.