FTSE index surges up as US says it will keep pumping money into economy
FTSE 100 up by more than 40 points, led by mining stocks as Fed head Ben Bernanke says he's committed to monetary stimulus
Thursday 11 July 2013
The FTSE 100 index has risen on the back of good news from the US that the easy money era is far from over.
Federal Reserve chairman Ben Bernanke has reaffirmed his commitment to financial stimulus, saying that while the US central bank could start "tapering" its $85 billion-a-month bond-buying program later this year, Fed officials aren't abandoning their broader commitment to easy-money policies.
By early afternoon, the FTSE 100 had risen by more than 45 points or 0.7 per cent at the news, with mining stocks leading the charge upwards.
Bernanke said on Wednesday that the overall message coming from the central bank was that "a highly accommodative policy is needed for the foreseeable future".
"For now there's only one story in play and that's markets attempting to assess just how good the news was from Bernanke," Mike McCudden, head of derivatives at Interactive Investor, said.
He added, sounding a note of caution: "The bulls may be in charge but they will want to enjoy this while they can - when the timing of the tapering is announced, the mood will most certainly change."
Mining stocks were the biggest risers by some margin, dominating the leaderboard, as copper prices hit a near one-month high on the back of the news from across the pond.
AB Foods also managed strong gains, up 4.3 per cent, driven by a strong third-quarter performance at Primark, which it owns, prompting Panmure Gordon to give the company a "buy" recommendation.
"My outlook is still bullish on the FTSE ... For me, the main target remains 6,755 (around the 2007 peak)," GFT Markets technical analyst Fawad Razaqzada said. The market is currently about 200 points below that.
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