FTSE 100 Friday close: Fed move boosts ‘Santa Rally’

20th December 2013


The confirmation from the US central bank that it would finally begin tapering its quantitative easing programme in January has failed to put a drag on the so-called ‘Santa Rally’.

When the news emerged midweek that the Federal Reserve would reduce its monthly cash injection of $85bn to $75bn, the S&P 500 rose robustly on the news as did the UK market.

The FTSE 100 closed on Friday at 6,606.58, 21.88 points up on the day and 2.5% better over the week – marking the first time it has surpassed the 6,600 mark this month.

Leading the way was cruise operator Carnival, jumping more than 10% over the week to close at 2,389p, as the City welcomed better than expected fourth quarter sales.

Also enjoying a week of strong gains was Aggreko, up just shy of 10% at 1,665p, after the temporary power supplier won contracts to supply power at next year’s World Cup in Brazil and Commonwealth Games in Glasgow. Forestry and paper group Mondi increased 9% to 987p over the trading week after analysts at Bank of America Merrill Lynch upgraded its recommendation on the stock to ‘buy’.

Other high risers included Associated British Foods up 8% at 2,425p and plumbing giant Wolseley, 7% higher at 3,343p.

In regards to the UK listed banks, Royal Bank of Scotland was the top mover, up 4% to 327.1p, while Barclays gained 3% to close at 259.7p as did Lloyds Banking Group, which finished the week at 77.31p. Standard Chartered firmed 2% to 1,319p while its Asian market competitor HSBC rose 1% to 652p.

BAE Systems put a drag on progress, falling 3% to 422.1p following the news that its deal to supply Typhoon jets to the United Arab Emirates fell through.

Miner Randgold Resources also slipped down the blue-chip index, closing 5% lighter at 3,765p, making it the steepest faller of the week. Elsewhere Christmas cheer did not spread to the retailers this week as Sainsbury’s shares lost 5% to 370.1p while Marks & Spencer shed 3% to 445p.

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