London close: Investors concentrate on Bernanke's words

10th Apr 2013 17:11

UK equities finished Wednesday close to their best levels of the day despite the pre-release of the minutes of the Federal Reserve Open Market Committee's (FOMC) last rate setting meeting, which at first glance seemed to show US monetary policy makers taking another step closer to quantitative easing. "Many participants (...) expressed the view that continued solid improvement in the outlook for the labour market could prompt the Committee to slow the pace of purchases beginning at some point over the next several meetings (...)."Traders however are wondering if last Friday's by some accounts dismal jobs report does not beg the question of whether those minutes are now dated. For Bill Hubbard, Chief Economist at Markets.com, the answer should be in the affirmative. In a written reply to interview questions sent by Sharecast he said: "First, Bernanke has already spoken this week (Tuesday) and reassured markets that he will not abruptly tighten policy. Second, last week's softer-than-expected employment report has led investors to push out their expected timing of a start to tapering. Indeed, our US economists have long held the view that tapering will be a story for 2014."Acting as a backdrop, President Barack Obama submitted his proposed 2014 budget to Congress. In parallel, investors were shrugging off a surprise trade deficit in China in March, as the data showed a strong rebound in imports. Export growth, however, was weak. Nevertheless, there is a lingering suspicion that the last few months' worth of data was overstated. In fact, and on the above point, economists at Nomura pointed out to clients that this is probably still the case although they are not sure of the reason why there has been a sudden surge. Amongst the difficult-to-explain data points is the fact that China?s exports to Hong Kong, which accounted for 27% of the total, soared by 93% y-o-y in March, exceeding the already high growth of 61% in Jan-Feb, they explained. Lastly, mention must be made that the European Commission itself today criticised the fact that Spain's adjustment is "running out of steam." On the other side of this debate, European Central Bank Governing council member Jorg Asmussen today reiterated the urgency of finalising a banking union, something which is anathema to some 'core' countries. FTSE 100: Airlines and miners provide a liftBudget airline easyJet surged from the 'get-go' after Citigroup upgraded the stock to 'buy' and raised its target price from 980p to 1,210p, saying that it expects strong profit growth and continued market-share gains this year.Sector peer IAG also performed well after Credit Suisse kept its 'outperform' recommendation for the shares, saying that the pending acquisition of Vueling would "represent another significant positive step towards driving profitability in Spain".Mining stocks were on the up on hopes over Chinese domestic demand with Vedanta, EVRAZ, ENRC and Rio Tinto making decent gains. Vedanta was leading the way after reporting an increase in full-year production across oil and gas, copper, aluminium, lead and silver. Today's In that regard, today's Chinese import data was reassuringly solid.Polymetal also rose after completing its acquisition of the Maminskoye gold deposit in the Sverdlovks region of Russia which it hopes will have "substantial exploration upside".Supermarket group Morrison was lower on reports that it could be cutting up to 700 back-office jobs.Engineering firm IMI was also among the fallers after going ex-dividend.FTSE 250: AZ Electronic rebounds...slightlyShares in chemicals group AZ Electronic Materials surged by 14%, though this only slightly made up for the near-35% slump yesterday after a profit warning. UBS upgraded the stock from 'neutral' to 'buy' this morning, saying that yesterday's sell-off was overdone and that the investment case remains intact.Engineer WS Atkins was also on the rise after saying that full-year results would come in ahead of expectations thanks to stronger second-half margins in the UK and US.FTSE 100 - RiserseasyJet (EZJ) 1,090.00p +6.65%International Consolidated Airlines Group SA (CDI) (IAG) 250.90p +5.78%Vedanta Resources (VED) 1,179.00p +5.65%CRH (CRH) 1,430.00p +4.84%Barclays (BARC) 298.25p +4.28%Royal Bank of Scotland Group (RBS) 285.40p +4.20%Evraz (EVR) 209.70p +4.07%Eurasian Natural Resources Corp. (ENRC) 269.90p +3.81%Prudential (PRU) 1,066.00p +3.60%Standard Life (SL.) 340.90p +3.55%FTSE 100 - FallersFresnillo (FRES) 1,323.00p -2.29%Randgold Resources Ltd. (RRS) 5,340.00p -2.20%Tullow Oil (TLW) 1,167.00p -1.68%BG Group (BG.) 1,122.50p -0.71%Glencore International (GLEN) 357.50p -0.28%Anglo American (AAL) 1,695.00p -0.26%Xstrata (XTA) 1,074.50p -0.19%Croda International (CRDA) 2,697.00p 0.00%InterContinental Hotels Group (IHG) 1,923.00p +0.10%British Sky Broadcasting Group (BSY) 864.00p +0.12%FTSE 250 - RisersAZ Electronic Materials SA (DI) (AZEM) 273.60p +14.00%Paragon Group Of Companies (PAG) 329.80p +6.56%Supergroup (SGP) 682.50p +5.57%Halfords Group (HFD) 333.30p +5.44%Barratt Developments (BDEV) 280.80p +5.01%3i Group (III) 325.20p +4.63%International Personal Finance (IPF) 448.80p +4.59%FirstGroup (FGP) 215.80p +4.40%Carillion (CLLN) 288.50p +4.30%Kazakhmys (KAZ) 410.40p +4.29%FTSE 250 - FallersHochschild Mining (HOC) 280.00p -3.15%RPS Group (RPS) 266.60p -2.77%Berendsen (BRSN) 747.50p -2.67%Morgan Advance Materials (MGAM) 280.00p -2.61%Ophir Energy (OPHR) 439.10p -2.53%Barr (A.G.) (BAG) 540.00p -2.35%New World Resources A Shares (NWR) 210.00p -2.33%Amlin (AML) 415.80p -2.05%Moneysupermarket.com Group (MONY) 182.70p -2.04%PayPoint (PAY) 896.00p -1.81%FTSE TechMARK - RisersRM (RM.) 79.00p +3.27%Xaar (XAR) 420.00p +2.19%Gresham Computing (GHT) 79.75p +1.59%BATM Advanced Communications Ltd. (BVC) 19.00p +1.33%Torotrak (TRK) 30.00p +1.27%Ark Therapeutics Group (AKT) 0.45p +1.12%Vislink (VLK) 31.00p +0.40%Ricardo (RCDO) 422.00p +0.24%Innovation Group (TIG) 25.00p 0.00%Triad Group (TRD) 5.50p 0.00%FTSE TechMARK - FallersFiltronic (FTC) 60.62p -3.77%Phytopharm (PYM) 1.30p -3.70%Vectura Group (VEC) 79.00p -3.36%Oxford Biomedica (OXB) 1.62p -2.99%Emblaze Ltd. (BLZ) 57.50p -1.71%CML Microsystems (CML) 406.00p -1.69%Optos (OPTS) 146.25p -1.18%Kofax (KFX) 301.50p -1.15%Consort Medical (CSRT) 783.00p -0.76%Wolfson Microelectronics (WLF) 170.00p -0.58%AB