QE hopes spark FTSE rally, JP Morgan beats view

By David Brett

LONDON (BestGrowthStock) – Britain’s leading shares were higher around midday on Wednesday after U.S. Federal Reserve meeting minutes suggested it may soon feed markets with cheap cash to boost growth, sparking a surge in equities.

Bullish earnings from JP Morgan also underpinned market gains. The results from the U.S. bank followed chipmaker Intel, which beat forecasts overnight on Tuesday.

Miners and energy stocks led the UK blue-chip rally, in tandem with commodities helped by robust data from Asia overnight.

By 1107 GMT, the FTSE 100 index was up 71.84 points, or 1.2 percent, at 5,733.43, back up around highs last seen at the end of April, and having closed down 0.2 percent at 5,661.59 on Tuesday.

However, banks missed out on the rebound after Asia-focused Standard Chartered, down 2.2 percent, announced plans to raise $5.3 billion via a rights issue.

Barclays dropped 1.6 percent as traders speculated that the UK bank may have to raise up to 8 billion pounds due to forthcoming tighter regulatory capital requirements, based on Standard Chartered’s move.

U.S. bank JPMorgan reported third-quarter earnings of $1.01 per share, which comfortably beat the Thomson Reuters I/B/E/S forecast of $0.90 per share.

“Corporate earnings don’t seem to be flagging too much and there’s the expectation that we will get the further asset purchases in the United States which is fuelling the market,” Tim Whitehead, head of portfolio service at Redmayne-Bentley, said.

UK chipmaker Arm Holdings was up 2.5 percent after stronger-than-expected third-quarter results and a forecast for better sales in the fourth quarter from U.S. peer Intel.

MINERS RISE

Miners and energy stocks rose along with base metal and crude prices after Japanese machinery orders rose more than expected.

Mexican precious metals miner Fresnillo added 3.4 percent after it said its silver and gold production rose to a record in the third quarter, beating expectations, and reiterated that it is on track to meet its full-year targets.

Announcements from China also helped, after the government said it will promote sales of construction material in rural areas, and as the world’s fastest-growing economy reported soaring crude imports.

Oil majors BP gained 1.6 percent, while oil services firms Amec and Petrofac added 4.0 and 4.5 percent respectively after Washington lifted its ban on deepwater drilling seven weeks ahead of schedule.

Hammerson climbed 2.9 percent after Goldman Sachs upgraded its rating for the real estate group to “conviction buy” from “neutral.”

Reed Elsevier was 1.1 percent higher, with traders citing talk that Wolters Kluwer is interested in making a bid for the Anglo-Dutch publishing company.

The number of Britons claiming jobless benefits last month rose in line with expectations, official data showed, but the wider measure of the unemployment rate dipped in August to its lowest in more than a year.

Luxury group Burberry slipped 2.3 percent as some analysts questioned whether a small upgrade in profit guidance was enough to sustain recent strong gains.

Ex-dividend factors knocked 1.77 points off the index, with Cobham, Old Mutual, Tesco and Smith & Nephew all losing payout attractions.

(Editing by Erica Billingham)

QE hopes spark FTSE rally, JP Morgan beats view