Market Report: US resurgence puts the bears to flight

  • @LauraHChesters

It was a day of two halves today. Pessimists were toppled by bullish traders in the afternoon, and the benchmark index hit its highest point since May 2008, taking it back to the level last seen before the collapse of Lehman Brothers. FTSE Group data show the FTSE 100 index soared 28.38 points to 6,132.36.

Good jobs data from the United States and better-than-expected trading updates from US companies and UK retailers such as Home Retail Group, up 15.1p to 136.6p, helped punters to feel positive.

Angus Campbell, head of market analysis at Capital Spreads, said: "It looks like the Great Rotation out of bonds into equities that's being bandied around at the moment is in full flow as equities have defied the bears once again in today's session."

British punters' interest in US stocks has also been apparent, the online stockbroker Interactive Investor said. It has seen a jump in interest for US stocks from its clients, and Douglas Boyce, head of share dealing at Interactive Investor, said: "There seems to be a clear belief that the US economy is recovering, and right now our clients seem happy to overlook concerns surrounding the budget deficit."

Mr Boyce said interest in Apple is up around 50 per cent for the week so far, after its shares price dropped earlier this week on fears over iPhone demand, while requests for US equities in general is up almost 100 per cent since the start of the year.

British Airways' owner, IAG, flew to the top of the blue-chip index, soaring 8.8p to 211.8p. Investors were very glad it hasn't got any of Boeing's flagship 787 Dreamliners. The planes have been taken out of service after issues with a Japanese model.

Sales were booming at Primark and Twinings owner ABF and the shares climbed 50p to 1,606p.

The publisher and events business Reed Elsevier flogged the screening division of its LexisNexis risk solutions business to a private-equity group, and UBS's scribes think the deal could have raised up to $300m (£187m). UBS's analysts think Reed will plough the cash into share buybacks. Reed's shares booked in a 9.5p gain to 678.5p.

Banks were still in focus, and the ratings agency Fitch said the safeguards of an "electric" ring fence and "sibling" structure for UK retail banks could actually "make the separation from the rest of a banking group more effective and benefit the credit profile of the retail bank". Barclays rose 2.65p to 296.05p and Royal Bank of Scotland was up 3.7p to 353.8p, but Lloyds Banking Group lost 0.27p to 53.28p.

Investors in the property company Hammerson are breathing a sigh of relief after the Brent Cross-owner kissed and made up with its bitter Australian rival Westfield. Westfield, which already owns and runs giant malls in the east and west of London, had been planning a huge new scheme in Croydon. At the same time, Hammerson had been buying up assets in the town and planned its own version of a shopper's paradise. The two squared up and spent the past year trying to insist they would be the best to build a £1bn scheme. The news that the two are at peace sent Hammerson's shares up 4.9p to 487.7p. Jefferies' property guru, Mike Prew, views their plans as a "very sensible compromise to redevelop the centre". Mr Prew gives Hammerson a hold rating with a share price target of 482.8p. The insurance group Aviva is selling its 49 per cent share in its Malaysian business to Sun Life for £152m, and the shares edged down 0.1p to 368p.

Over on the mid-tier index, the cash-and-carry business Booker reported a rise in sales, but its shares only edged forward 0.2p to 98.9p.

The lorry-spotters' favourite, Stobart Group, warned that its full-year operating performance would be slightly below market expectations, and the shares motored down 2.5p to 92.55p.

The Tanzania-focused gold company African Barrick Gold, which had been a takeover target for China National Gold until talks collapsed earlier this month, posted a 9 per cent drop in annual production. But it had witnessed a pick-up in the fourth quarter. African Barrick put on 1.5p to 350p.

On AIM, Quadrise Fuels updated on its progress on producing shipping fuel and the shares gushed up 1.12p to 13p.

Lansdowne Oil said it continues to progress farm-out talks with interested parties and its shares jetted up 1.25p to 54.25p.

Nature Group, the maritime and off-shore waste specialist, has won a contract in Tanzania and its shares ticked up 3p to 24p.