12th July 2013
The FTSE 100 racked up another week of gains as the US Federal Reserve further eased investor fears over the reduction of its economic stimulus measures writes Philip Scott.
The top flight index closed on Friday just 1.53 points ahead on the day at 6,544.94 but was 3 per cent better over the week. Recent weeks have witnessed the leader-board clawing back some of its losses – it is now up 17 per cent over 12 months – since Fed boss Ben Bernanke sent shock waves through markets in May when he mooted the potential tapering back of quantitative easing.
Stocks surged after the minutes of the Fed’s latest monetary policy meeting showed it was committed to keeping its $85bn-a-month bond buying programme in place for the time being, as it wants more evidence of a stronger recovery in job numbers.
After a period of heavy falls, miners enjoyed a boost over the week, with Fresnillo and Vendanta Resources leading the way, each up 11 per cent to 981p and 1,097p respectively, while Rangold Resources firmed 8 per cent to 4,393p.
Also enjoying a better week was Royal Bank of Scotland, up 10 per cent to 304.4p following positive upgrades from brokers Investec and Goldman Sachs. Lloyds Banking Group, earmarked for a sell-off which could begin as early as September rose 5 per cent to 67.73p while HSBC added 1 per cent to 723.1p. Standard Chartered firmed 4 per cent at 1,529.5p and Barclays managed a 5 per cent gain to 306.15p.
Security giants G4S and Serco were the FTSE 100’s main fallers over the week, following a highly-critical review which revealed they had overcharged the Government by millions for electronic criminal tags. Serco lost 8 per cent to 620.5p while G4S shed 7 per cent to close at 209.5p.
Next week sees market updates from mining giants BHP Billiton and Rio Tinto while all eyes will be on the minutes of the Monetary Policy Committee Meeting held on 3 and 4 July, which should shed more light on the approach of new Bank of England boss Mark Carney.