London midday: Momentum continues as BoE stays put

8th Mar 2012 11:43

- BoE maintains interest rates and asset purchases.- Greek debt-swap participation rate estimated at 60 percent.- Miners lift the Footsie higher.The earlier momentum had continued by lunchtime after the Bank of England announced that it has decided to maintain its interest rates at 0.5 percent, marking the third consecutive year of record-low borrowing costs. Fionnuala Earley, the UK consumer economist at RBS, said: "the committee voted to hold rates at 0.5% for the 36th consecutive month in March, and there is little to suggest it will want to raise rates for a long time yet. Inflation is beginning to recede and economic conditions are weak, in spite of support from quantitative easing. So the MPC has no reason to rush, especially if it fears a hasty rise could squash any budding recovery."With the central bank doing what was widely expected and the European Central Bank predicted to do the same, the focus today will very much be on Greece, as markets wait to see how many private creditors have agreed to take part in the bond-swap deal.Europe is still awaiting a final decision on the Greek debt restructuring. Private investors have until later this evening to decide if they will accept a debt exchange in which they will be required to take a 53.5% nominal haircut, in an agreement that would save Athens about €106bn (£88bn). A Greek government official has already said that it is confident of achieving the 75% participation threshold, while another told Reuters this morning that "the pace of responses to the bond offer is good, the percentage of bondholders tendering voluntarily is very high." The latest estimate, according to Bloomberg, pins the participation rate at around 60%. This morning's buying mood was has been in part boosted by speculation of a new type of bond-buying programme by the Federal Reserve to drive economic growth in the US. According to the Wall Street Journal, the central bank is considering printing money to acquire bonds, then borrowing the money back for short periods at low rates, effectively taking it out of circulation (sterilising). This move is thought to be an attempt to ease fears of quantitative easing fuelling inflation.MINERS LEAD THE RISECommodities prices were on the up this morning, lifted by hopes that Greece can secure its next bailout if the debt-swap deal is successful. As such, the miners were among the highest risers of the day, with Kazakhmys, Antofagasta, Vedanta Resources, Rio Tinto, ENRC, Evraz and Randgold Resources making gains of at least 3% each.Xstrata was also in demand after agreeing to acquire the Sukunka hard coking coal deposit from Talisman Energy for $500m cash. "Based on our due diligence and technical analysis, Sukunka has the potential to be a high quality metallurgical coal mine," said Xstrata Coal's Chief Executive Peter Freyberg. Supermarket giant Morrison jumped as it beat both sales and profit expectations in 2011, after seeing a record number of customers in its stores. Turnover excluding VAT rose 7% to £17,663m in the 12 months ended January 29th, ahead of expectations of £17,570bn. Jefferies reiterated its buy rating on the stock this morning, saying Morrison is "delivering for shareholders again", after raised its total dividend by 11%. Insurance firm Aviva rose strongly after beating all of its operating targets in 2011. Operating profit before tax, which eased 2% to £2.50bn from £2.55bn, was ahead of market expectations of £2.41bn Chip company ARM Holdings was a high riser after US tech giant Apple - which uses some of its technology in its gadgets - unveiled its new-and-improved iPad last night. Morgan Stanley has this morning upgraded ARM from equal weight to overweight. Also feeling the effects of a broker upgrade was Petrofac after JP Morgan Cazenove raised its rating from neutral to overweight and lifted its target price.Just a handful of stocks were in the red, with Schroders among the worst performers after announcing that its Chairman and Chief Investment Officer are calling it time on their careers at the asset management firm. Shares were falling despite the group seeing profits beat expectations in 2011.FTSE 250: FENNER JUMPS ON STRONG FIRST HALF Polymers firm Fenner has reported a strong trading period for the six months ended February 29th 2012, with operating profit for the half year 'significantly' ahead of the comparable period last year. All segments of Spirax-Sarco Engineering were firing on all cylinders in 2011, as the peristaltic pumps specialist produced figures a shade ahead of market expectations. Shares headed higher after the group revealed that full-year revenue rose 10%. Logica was a heavy faller after Morgan Stanley downgraded its rating on the business and technology service company from overweight to equal weight.BCFTSE 100 - RisersHammerson (HMSO) 406.50p +4.23%Petrofac Ltd. (PFC) 1,657.00p +4.15%Kazakhmys (KAZ) 981.00p +4.14%Antofagasta (ANTO) 1,275.00p +3.66%Rio Tinto (RIO) 3,489.00p +3.53%Burberry Group (BRBY) 1,486.00p +3.41%Vedanta Resources (VED) 1,389.00p +3.35%Eurasian Natural Resources Corp. (ENRC) 675.50p +3.13%IMI (IMI) 980.50p +3.05%Johnson Matthey (JMAT) 2,322.00p +2.97%FTSE 100 - FallersMan Group (EMG) 143.30p -1.92%Schroders (SDR) 1,539.00p -1.41%Schroders (Non-Voting) (SDRC) 1,231.00p -0.32%SSE (SSE) 1,290.00p -0.23%United Utilities Group (UU.) 614.50p -0.16%Centrica (CNA) 307.30p -0.10%FTSE 250 - RisersFenner (FENR) 494.70p +7.61%Imagination Technologies Group (IMG) 644.50p +7.15%Supergroup (SGP) 557.00p +6.70%Spirax-Sarco Engineering (SPX) 2,132.00p +6.07%Perform Group (PER) 288.00p +5.84%Ferrexpo (FXPO) 319.50p +5.58%Heritage Oil (HOIL) 168.10p +5.33%Balfour Beatty (BBY) 279.30p +5.20%International Personal Finance (IPF) 256.90p +5.07%Hunting (HTG) 839.00p +4.55%FTSE 250 - FallersLogica (LOG) 86.95p -2.52%Genus (GNS) 1,296.00p -1.52%SDL (SDL) 703.00p -1.26%BH Macro Ltd. USD Shares (BHMU) 19.55 -1.21%BH Global Ltd. USD Shares (BHGU) 11.75 -1.18%Shanks Group (SKS) 102.30p -1.16%Phoenix Group Holdings (DI) (PHNX) 550.00p -1.08%Home Retail Group (HOME) 102.20p -0.97%PayPoint (PAY) 575.00p -0.86%Moneysupermarket.com Group (MONY) 126.10p -0.71%