London close: Fed's Yellen sparks gains on hopes of continued stimulus

14th Nov 2013 16:28

- Yellen comments in focus as taper speculation picks up- Corporate earnings come in mixed- Economic data weakens in UK, EurozonetechMARK 2,649.23 +0.90%FTSE 100 6,666.13 +0.54%FTSE 250 15,257.93 +0.51%Markets were able to shrug off some disappointing economic data on Thursday as hopes over a continuation of monetary easing by the US Federal Reserve lifted stocks.Speaking this afternoon to the Senate Banking Committee, soon-to-be Fed Chair Janet Yellen argued that the central bank's quantitative easing (QE) programme, which has been in place since late 2008, has made a "meaningful contribution to economic growth". However, she said that the labour market and wider economy are still performing "far short of their potential" with unemployment still too high. As such, she assured that Fed policy is "not on a set course", raising hopes that the central bank could put off a tapering of QE until next year.The FTSE 100 finished 36.13 points higher at 6,666.13, rebounding after hitting its lowest level in nearly four weeks on Wednesday (6,630).Financial Sales Trader Alex Conroy from Spreadex said that Yellen's "vigorous defence of QE" led to a strong finish for markets "as investors who may have been cautious about getting into equities just before tapering occurred, get the encouragement they need". Stocks had pared gains this morning after a series of gloomy economic figures from this side of the Atlantic. UK retail sales fell by 0.7% in October, compared with a 0.6% gain the month before, disappointing analysts who had pencilled in no change month-on-month. Meanwhile, Eurozone gross domestic product growth eased to 0.1% in the third quarter, in line with analysts' estimates but down from the 0.3% expansion seen in the second quarter. German GDP growth slowed from 0.7% to 0.3%, as expected, while French economic activity contracted by 0.1% from 0.5% growth in the second quarter, worse than forecasts. Sainsbury extends gains, Tesco fallsSupermarket group Sainsbury gained as investors continued to celebrate the company's better-than-expected first-half results yesterday. The stock was benefitting from broker upgrades from HBSC, Exane BNP Paribas and Citigroup who all lifted their ratings on the stock and raised target prices.In contrast, sector peer Tesco was being pressured lower by a Goldman Sachs downgrade to 'sell', with the bank saying that investors "still have some time to wait before a cash return programme (buyback of special dividends) can be instigated".British Gas-owner Centrica was also down after warning that market conditions remained challenging, particularly in business energy supply in both the UK and the US, in UK gas-fired power generation and in UK gas storage. The company said it expects 2013 adjusted earnings to be flat on last year.Consumer packaging company Rexam fell after saying trading since the start of July. Sentiment still seems fragile following the company's profit warning in June.Burberry's share price was higher after the luxury fashion company said that first-half revenues exceeded £1bn for the first time on the back of strong growth in retail. Oil and gas group Ophir Energy surged after announcing the sale of a 20% interest in three blocks in Tanzania to Pavilion Energy for a maximum of $1.3bn.Digital sports media firm Perform, however, dropped sharply after saying that earnings would be lower than expected this year. Serco's shares also tumbled as the service company warned profits would be hit by contract delays with the UK government and currency movements.FTSE 100 - RisersAberdeen Asset Management (ADN) 419.20p +3.02%Shire Plc (SHP) 2,840.00p +2.86%WPP (WPP) 1,342.00p +2.68%ITV (ITV) 186.40p +2.53%Smiths Group (SMIN) 1,440.00p +2.35%CRH (CRH) 1,617.00p +2.21%Associated British Foods (ABF) 2,311.00p +2.08%Rolls-Royce Holdings (RR.) 1,235.00p +2.07%Randgold Resources Ltd. (RRS) 4,598.00p +1.97%Prudential (PRU) 1,266.00p +1.85%FTSE 100 - FallersCentrica (CNA) 345.30p -5.11%Morrison (Wm) Supermarkets (MRW) 266.20p -2.85%Tesco (TSCO) 356.15p -2.34%Rexam (REX) 506.50p -2.31%William Hill (WMH) 370.70p -2.16%RSA Insurance Group (RSA) 102.50p -1.54%Mondi (MNDI) 996.00p -1.39%Antofagasta (ANTO) 804.00p -1.17%Johnson Matthey (JMAT) 2,990.00p -0.47%Glencore Xstrata (GLEN) 324.20p -0.22%FTSE 250 - RisersOphir Energy (OPHR) 362.10p +10.03%Xaar (XAR) 1,015.00p +7.35%Ted Baker (TED) 1,887.00p +5.42%NMC Health (NMC) 363.20p +4.88%Booker Group (BOK) 157.70p +4.78%SIG (SHI) 215.60p +4.76%Ferrexpo (FXPO) 185.40p +3.69%Amlin (AML) 447.70p +3.68%Ocado Group (OCDO) 432.10p +3.60%Brewin Dolphin Holdings (BRW) 287.10p +3.27%FTSE 250 - FallersSerco Group (SRP) 419.10p -16.85%Perform Group (PER) 460.00p -14.81%Phoenix Group Holdings (DI) (PHNX) 713.50p -8.17%Bank of Georgia Holdings (BGEO) 2,060.00p -4.67%3i Group (III) 353.80p -4.58%BBA Aviation (BBA) 320.30p -4.22%Ladbrokes (LAD) 180.20p -3.53%Pace (PIC) 295.00p -3.41%Thomas Cook Group (TCG) 139.50p -2.99%IG Group Holdings (IGG) 613.50p -1.68%BC