London close: Stocks edge higher on IMF hopes

18th Jan 2012 16:33

- IMF looks to boost lending capacity by $500bn- UK jobless rate rises to 8.4%- Essar bounces back after Indian tax rulingUK stocks finished moderately higher on Wednesday, with reports that the IMF is boosting its lending capacity lifting the mood across European markets. The International Monetary Fund (IMF) is looking to increase the resources at its disposal to fight against the Eurozone crisis. "Based on staff's estimate of global potential financing needs of about $1tn in the coming years, the Fund would aim to raise up to $500bn in additional lending resources," the IMF said.According to IMF Managing Director Christine Lagarde, "The biggest challenge is to respond to the crisis in an adequate manner and many Executive Directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the Euro Area and protect economies around the world from spillovers and excessive output/income contractions.A German debt auction saw strong demand in which the government issued €3.44bn in two-year notes at an average yield of 0.17%. Meanwhile, a close eye will be kept on Athens as Greek private creditors meet with the government to agree on debt write-downs. Elsewhere in the Eurozone, reports that Fitch could downgrade Italy by two notches continue to do the rounds, while the S&P has said that Germany's triple-A rating will not be at risk of a downgrade this year, even if the economy enters a recession. In domestic news, the UK unemployment rate hit 8.4% in the three months to the end of November, higher than the 8.3% analysts had been expecting. The unemployment rate has not been higher since 1995 and the number of unemployed people has not been higher since 1994, according to the Office for National Statistics. ESSAR TOPS THE LIST AFTER SHARP FALL Essar Energy climbed this morning after a court ruling in India wiped 26% of the company's share price yesterday. The ruling appeared to put an end to Essar's use of a tax scheme for its oil refining operations in the state of Gujarat, which had seen the company defer $1.235bn in tax payments. Essar now says it is "examining all legal options" and expects to file a review petition in the next 30 days. Cruise ship operator Carnival was another stock bouncing back; the shares have been hammered this week after one of the company's ships ran aground last Friday, leading to several deaths. Hedge fund manager Man Group rose strongly despite seeing funds under management fall $6bn to $58.4bn at the end of December. Peel Hunt said this morning that the stock, trading at 7.9 times earnings is "undeniably cheap". Imperial Tobacco topped the fallers after going ex-dividend. Oil giant Tullow fell after 2011 production averaged 78.2 thousand barrels of oil equivalents per day (mboepd), slightly below the (already revised lower) guidance of 79-81mboepd. Miner BHP Billiton was in favour after saying that it now expects full-year iron output to exceed its prior guidance, while Fresnillo rose after saying that while silver output had remained flat in the final three months of the year, the full-year gold production target has been beaten.FTSE 250 MOVERS: INTERMEDIATE CAPITAL STILL ON THE RISESpecialist investment firm Intermediate Capital was one of the top risers, extending gains after yesterday's trading statement in which it said assets under management were stable at €12bn in the three months to December 30th. The group also announced today that it will realise a £43m capital gain in relation to the disposal of its stake in intellectual property management firm CPA Global. Shares were up 7% today and up 12% on the week. Meanwhile, Africa-focused oil group Afren was the worst performer, pulling back after yesterday's impressive surge on the back of a significant new off-shore oil find. Retailers were also making strong gains, with KESA, JD Sports and particularly Dixons performing well. BCFTSE 100 - RisersEssar Energy (ESSR) 136.20p +7.24%Man Group (EMG) 114.40p +6.82%Burberry Group (BRBY) 1,344.00p +3.31%Carnival (CCL) 1,971.00p +3.25%Wolseley (WOS) 2,180.00p +2.98%Glencore International (GLEN) 415.40p +2.45%InterContinental Hotels Group (IHG) 1,285.00p +2.39%Evraz (EVR) 416.10p +2.11%BAE Systems (BA.) 311.50p +2.00%Compass Group (CPG) 619.50p +1.98%FTSE 100 - FallersImperial Tobacco Group (IMT) 2,246.00p -4.83%Tullow Oil (TLW) 1,394.00p -4.19%Weir Group (WEIR) 2,025.00p -3.57%RSA Insurance Group (RSA) 107.00p -1.92%Rolls-Royce Group (RR.) 749.50p -1.77%ICAP (IAP) 320.30p -1.63%Cairn Energy (CNE) 286.20p -1.21%Severn Trent (SVT) 1,532.00p -1.16%IMI (IMI) 869.00p -1.14%SSE (SSE) 1,247.00p -1.03%FTSE 250 - RisersKesa Electricals (KESA) 77.90p +10.89%Dixons Retail (DXNS) 11.86p +8.41%International Personal Finance (IPF) 166.80p +7.47%Intermediate Capital Group (ICP) 266.00p +6.10%Cable & Wireless Communications (CWC) 40.99p +5.35%Aberdeen Asset Management (ADN) 229.90p +5.27%TUI Travel (TT.) 181.10p +4.62%Talvivaara Mining Company (TALV) 339.00p +4.31%Ashtead Group (AHT) 221.60p +4.09%Hochschild Mining (HOC) 478.00p +3.91%FTSE 250 - FallersAfren (AFR) 126.00p -3.45%Shanks Group (SKS) 98.45p -2.62%Exillon Energy (EXI) 262.50p -2.42%Morgan Crucible Co (MGCR) 300.00p -2.41%Galliford Try (GFRD) 480.40p -2.24%Telecom Plus (TEP) 713.00p -2.13%SIG (SHI) 98.95p -2.03%F&C Asset Management (FCAM) 63.50p -1.93%Carpetright (CPR) 532.50p -1.84%Premier Oil (PMO) 418.50p -1.81%