London open: FTSE soars on outcome of Fed meeting

19th Sep 2013 08:12

The FTSE opened up 90 points this morning after the Federal Reserve surprised with its decision to maintain its bond-buying strategy on the back of softer growth. Following its two-day policy meeting, the Fed announced it had decided to stick with its approach of buying $85bn of debt a month, but said it could still potentially scale back this sum by the end of the year. In its report, the Fed said that while household spending and business fixed investment has advanced, and the housing sector has been strengthening, mortgage rates have risen further and fiscal policy is "restraining economic growth". As such, as part of its goal "to foster maximum employment and price stability", it has "decided to await more evidence that progress will be sustained before adjusting the pace of its purchases". The decision prompted 10-year gilts to drop 16 basis points to 2.833%, which is by no small change for a single day. The gold price leapt on the news, prompting Randgold Resources to leap into the top spot on the FTSE. Meanwhile, a UK report is due out today on retail sales is forecast to show a 3.2% year-on-year increase in August, up slightly from the previous month's 3.1% jump. In today's UK company news, regulatory price increases have allowed water and sewage group United Utilities to raise revenues and profits in the first half of the year. The FTSE 100 company said it anticipated underlying operating profits would be moderately higher than the first half of last year in the six months to the end of September due to tight control of costs.African Barrick Gold has appointed a new Chief Financial Officer, Andrew Wray, who originally joined the company as Head of Corporate Development and Investor Relations in 2010. He will retain his existing responsibilities in addition to those of his new role. Jaco Maritz, who assumed the role of Acting Chief Financial Officer earlier this year, will revert to his original position of Vice President of Finance. Food wholesaler Booker reported a strong set of interim results, as the warm summer weather boosted customer numbers, adding that the Makro turnaround is progressing well. Total sales in the 12 weeks to September 13th, including Makro, rose by 19.3% on the same period last year. Booker like-for-like (LFL) sales (excluding Makro) rose 3.5% with non-tobacco LFL sales climbing 6.9%.Evraz has agreed to sell its subsidiary Evraz Vysokogorsky Iron Ore Mining and Processing Plant (VGOK) to NPRO URAL for $20m. The company has also agreed to provide of up to 400m Russian Rubles (RUB) to VGOK to normalise the working capital of the unit.Gulf Keystone Petroleum narrowed its first half losses as the oil and gas company kept a tight rein on costs. Loss after tax came to $26.4m, compared to the previous year's loss of $31.4m, reflecting a fall in administrative expenses to $19.3m from $34.1m. NR