Market report: Stocks respond to better news on debt and earnings

Almost four weeks into January and traders are feeling optimistic. Talks on resolving Greece's debt crisis have resumed. Ben Bernanke, Federal Reserve chairman, says ultra-low interest rates will last another three years – a year longer than expected – and US corporate earnings continue to surprise on the upside. Little wonder stocks have responded worldwide.

The FTSE-100 briefly pushed through the 5800 level yesterday, and still closed up 72.2 points, or more than 1 per cent, at 5795.20 – a six-month high. The Cac-40 in Paris and the Dax in Frankfurt also both jumped more than 1 per cent.

The Footsie is now back at the same level as the end of July 2011, before the markets tanked on eurozone fears and US corporate jitters. There is serious talk on dealing-room floors that the market could breach 6000 soon, with some traders seeing 6100 as a realistic target – a 10 per cent rise since the start of the year.

Banks did well as the Greek government signalled growing confidence that a deal on its debt "haircut" could be reached, and Italy had to pay slightly less than in recent days to borrow money at a bond auction.

Lloyds Banking Group was the big winner, surging more than 6 per cent or 1.9p to 32.82p. Shares have risen more than 20 per cent since Antonio Horta-Osorio's return from sick leave on 9 January, and have recovered all their losses since the chief executive went on leave in the autumn. The stock is still down more than half on a year ago.

Barclays was up 5.6p at 222.85p and Royal Bank of Scotland also climbed 0.92p at 27.67p.

The miners and commodity stocks were the best performers on the FTSE-100. Strong fourth-quarter production figures suggested that any global slowdown is not as bad as feared, while low interest rates mean investors want big-cap equities that can pay well-covered dividends.

Vedanta Resources flew up to the top of the FTSE-100 leaderboard, rising 8.7 per cent or 100p to 1152p. Other notable miners to rise in the region of 4-5 per cent included Anglo-American up 82.5p at 2737p, Rio Tinto climbing 181.5p to 3893p and XStrata shooting up 50.5p to 1129.5p.

Smaller-cap stocks also enjoying a commodities lift were Petropavlovsk, soaring 75.5p to 772p at the top of FTSE-250 leaderboard, and Avocet Mining, climbing 14.25p to 226p – also on the strength of a strong last quarter.

Back on the Footsie, the cruise line operator Carnival was the biggest loser, sinking 2.2 per cent or 42p to 1901p. Fears about the wider impact on consumer sentiment of the cruise liner disaster off the Italian coast continue to weigh on the sector.

Elsewhere in the travel business, shares in easyJet really took off, rising 10 per cent or 41.7p to 445.5p, as analysts rushed to back the strategy of Carolyn McCall, the former Guardian newspaper boss who moved into the airline cockpit just over 18 months ago. She is forecasting a better-than-expected loss for the past six months, the toughest period of the year, as business travellers have splashed out on meals and other extras such as speeding boarding.

The broker Investec was impressed, upgrading its profits forecast by 9 per cent, and it rates the airline as its "key buy" in the sector with a 500p target price. "The macro backdrop remains difficult," said Investec. "However, the strength of the easyJet model is seeing it once again take share and improve margins whilst others are struggling."

At the other end of the FTSE-250 board, the IT firm Misys was the biggest loser, tumbling 6 per cent or 20p to 305.3p after sales disappointed some analysts and it warned on the outlook as customers delay decisions in the present climate. "Following these results and associated downgrades, shares are coming down," declared the broker Panmure Gordon, although it said "takeover talks will keep the 'pep' in the share price".

On AIM, shares in Vince Power's Music Festivals Group tumbled 3p to 55p after it signed up the Eighties electronic band New Order as another headline act for his four-day music festival in Benicassim, Spain, in July. Traders don't tend to let their musical tastes influence their market-making, but earlier this week Music Festivals' shares had risen a half-penny when it announced Noel Gallagher's High Flying Birds as another headline act for the same event.

Looking ahead to next week, BSkyB shares slipped 1p, to 671.5p, ahead of half-year results on Tuesday. Sky's 10.3 million customer base means it is closely watched as a consumer bellwether, and the broker Numis Securities warns in a preview: "Given macro challenges, we believe gross additions and HD [high-definition TV] upgrades will be hard to come by and churn [the rate that subscribers quit] could increase." But Numis rates the shares a buy, reckoning Sky remains strong and should see off any threat to regain its Premier League football rights.

Start your day with The Independent, sign up for daily news emails
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own