London close: MPC's McCafferty warns against complacency

14th Jun 2013 16:16

Stocks bounced back further on Friday as traders opted to hold their fire ahead of next week's policy meeting at the US Federal Reserve. Nevertheless, there is still some uncertainty as to just how dangerous the present correction in equities really is, even if shares have reached clearly 'oversold' levels. Notably in the afternoon the International Monetary Fund (IMF) shaved its forecast for US economic growth in 2014 to 2.7% from 3.0% previously. In that same vein, Bill Hubard, Chief Economist at Markets.com, wrote on Friday about the rising realisation among market participants that US growth in the second quarter may not match that of the first quarter.Even so, some investors did decide to step in and scoop up some of those sectors which have been most punished of late, with miners being chief among them. An upbeat research note out from Citi also helped things along in the sector. The broker raised its view on European miners to overweight.Real estate companies also saw some strong demand. To be had in account, UK commercial property prices showed fractional capital growth of 0.01% in May, according to data from IPD, the first positive reading in 18 months.Also supporting the real estate sector was a move lower in UK Gilt yields, as they tracked their US counterparts. That came as market participants reacted very positively overnight to a report in The Wall Street Journal that US Fed Chairman Ben Bernanke will next week 'push back' against any suggestion that a rise in interest rates may now also be closer in time. Some observers apparently feel that this is a part of what has been vexing markets lately. Back in the UK, the Bank of England's Monetary Policy Committee member Ian McCafferty warned against complacency and the need to keep inflation expectations contained as a pre-requisite to accommodative monetary policies.FTSE 100: Miners rise as bargain-hunters step inAnglo American, Glencore, Antofagasta, Vedanta and Randgold led the resources sector higher today, while real estate giants Land Securities, British Land and Hammerson advanced.Newly merged mining conglomerate Glencore Xstrata also rose after saying that it has signed revolving credit facility worth $17.34bn to support general corporate activity. Shares gained strongly from the off.Severn Trent traded in the red, extending losses made earlier in the week following the news that a consortium of foreign bidders chose to walk away. The investors said that water group failed to "engage" in talks after rejecting their initial proposals.FTSE 250: Heritage Oil loses contract dispute at the UK High Court. Resource stocks were making advancing strongly on the FTSE 250 on Friday as the sector rebounded after a turbulent week owing to the wider market volatility.Oil explorer Afren led the risers with a gain of nearly 9.0% as West Texas crude oil prices rose to a nine-month high of $98.02 a barrel (up 1.4% on the day) on the back of increasing tensions in the Middle East. Heritage Oil however was lower after being defeated by FTSE 100 group Tullow Oil in a contract dispute taken to the UK High Court. The dispute related to which of the two companies was liable for a tax payment to the Ugandan government.Elsewhere, mining stocks were in demand after Citi upgraded the basic resources sector to 'overweight', saying that the category "looks cheap". New World Resources and Ferrexpo were among the better performers.Water group Pennon was pulling back after a strong rise the day before as it benefited from rumours that the company could be attracting interest from investors in Abu Dhabi.Real estate group Great Portland Estates was performing well after UBS upgraded its rating for the stock from 'neutral' to 'buy', saying that the recent pullback in the share price has created an opportunity to build positions.Sector peer Unite, the student accommodation firm, was also a high riser after yesterday placing 16m shares to raise £51.2m to invest into "select regional locations" over the next couple of years. The stock was given an extra lift today by Espirito Santo which boosted its target price from 371p to 381p.FTSE 100 - RisersGlencore Xstrata (GLEN) 315.85p +3.19%Randgold Resources Ltd. (RRS) 4,895.00p +2.86%Kingfisher (KGF) 352.50p +2.83%Aggreko (AGK) 1,725.00p +2.43%Vedanta Resources (VED) 1,213.00p +2.36%Hammerson (HMSO) 508.00p +2.32%British Land Co (BLND) 597.00p +2.31%Anglo American (AAL) 1,430.00p +2.14%Petrofac Ltd. (PFC) 1,324.00p +2.08%Polymetal International (POLY) 650.50p +1.80%FTSE 100 - FallersHSBC Holdings (HSBA) 680.90p -1.38%Severn Trent (SVT) 1,762.00p -1.29%Royal Dutch Shell 'B' (RDSB) 2,159.50p -1.01%Admiral Group (ADM) 1,304.00p -0.91%Tesco (TSCO) 336.90p -0.88%Diageo (DGE) 1,883.50p -0.82%Next (NXT) 4,554.00p -0.74%WPP (WPP) 1,120.00p -0.71%Associated British Foods (ABF) 1,782.00p -0.67%Meggitt (MGGT) 516.00p -0.67%FTSE 250 - RisersImagination Technologies Group (IMG) 316.20p +8.55%Afren (AFR) 129.00p +8.40%Lonmin (LMI) 288.70p +6.02%Unite Group (UTG) 352.90p +5.31%African Barrick Gold (ABG) 134.60p +5.24%NMC Health (NMC) 327.60p +5.00%Ferrexpo (FXPO) 153.30p +4.71%New World Resources A Shares (NWR) 90.35p +4.45%Lancashire Holdings (LRE) 780.00p +4.42%Great Portland Estates (GPOR) 549.50p +4.17%FTSE 250 - FallersOcado Group (OCDO) 296.90p -7.97%FirstGroup (FGP) 93.50p -4.83%Computacenter (CCC) 436.30p -3.02%Heritage Oil (HOIL) 138.30p -2.74%Senior (SNR) 251.70p -2.44%International Personal Finance (IPF) 480.40p -2.12%Essar Energy (ESSR) 126.30p -2.09%Playtech (PTEC) 644.00p -1.68%Morgan Advance Materials (MGAM) 266.00p -1.34%Fenner (FENR) 334.80p -1.24%FTSE TechMARK - RisersBATM Advanced Communications Ltd. (BVC) 15.50p +5.08%Sepura (SEPU) 117.50p +4.44%Ark Therapeutics Group (AKT) 0.45p +3.45%Xaar (XAR) 810.00p +2.02%Parity Group (PTY) 29.75p +1.71%Microgen (MCGN) 154.00p +1.65%Vectura Group (VEC) 82.25p +1.54%CML Microsystems (CML) 471.50p +1.40%Kofax (KFX) 325.00p +0.93%Innovation Group (TIG) 27.75p +0.91%FTSE TechMARK - FallersTriad Group (TRD) 6.00p -7.69%Promethean World (PRW) 13.50p -4.42%Antisoma (ASM) 1.65p -3.23%E2V Technologies (E2V) 116.00p -1.69%Wolfson Microelectronics (WLF) 162.25p -1.22%NCC Group (NCC) 110.00p -1.12%Torotrak (TRK) 26.75p -0.93%Oxford Biomedica (OXB) 1.69p -0.88%Emblaze Ltd. (BLZ) 49.50p -0.50%Optos (OPTS) 122.00p -0.20%AB