London open: Stimulus hopes drives gains after Fed minutes

23rd Aug 2012 08:44

- QE hopes increase after FOMC minutes- The ball is in Greece's court, says Juncker- Chinese manufacturing PMI falls to nine-month lowStocks bounced back after a sell-off yesterday as the details of the latest policy-rate setting meeting in the US showed that the Federal Reserve could embark upon more quantitative easing (QE) soon.The minutes of the Federal Open Market Committee (FOMC) meeting said that "many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery"Shavaz Dhalla, a financial trader from Spreadex, said this morning: "Although equities have not roared with optimism this morning, as many of the gains are likely to be already factored in over the last few months, the hope that further stimulus for the struggling US economy is providing a beacon of hope for supporters of further quantitative easing."Investors are still worried concerning the extent to which policy makers will allow the US economy to deteriorate before they finally step back in with another round of quantitative easing. Time will only tell whether the current approach proves to be too little, too late," he said.In Eurozone news, Eurogroup President Jean-Claude Juncker made clear that "the ball is in Greece's court" following his meeting with the country's Prime Minister Antonis Samaras. While the Greek PM requested a two-year extension on the deadline to implement austerity measures, the head of the Eurozone's finance ministers said that the Troika's visit to Athens in September will give the Hellenic Republic "one last chance" to meet its commitments. Meanwhile, the HSBC Chinese manufacturing sector purchasing managers' index for the month of August, compiled by Markit, has come in at 47.8 after a reading of 49.3 for the month before, apparently defying expectations for a stabilisation in the country's economy. The latest figure marks a nine-month low.FTSE 100: Miners up on stimulus hopes, shrug off Chinese dataMining stocks ignored the gloomy economic figures from China early on to making strong gains on the hopes that policy-makers in the US will boost the world's largest economy. Evraz, Randgold, Fresnillo, Antofagasta and Vedanta jumped early on.However, Kazakhmys bucked trend after seeing both revenues and earnings drop in the first half. Cash costs increased significantly during the period, leading the group to increase its cash cost guidance for the full year.Engineering group IMI fell after saying that the first-half revenue growth of 6% would likely slow in the second half mainly due to the weakening economic conditions in Europe.Sales and underlying earnings came in slightly ahead of market expectations at drinks brands leviathan Diageo, helping shares higher early on.FTSE 250: WH Smith results to be at top endNewsagent chain WH Smith jumped after saying it expects results for the year to the end of August will be at the top end of market expectations as the group's Travel business improves margins. AZ Electronic Materials, which produces chemicals for the electronics market, dropped after seeing profits fall in the first half.FTSE 100 - RisersFresnillo (FRES) 1,593.00p +4.39%Randgold Resources Ltd. (RRS) 6,385.00p +3.91%Evraz (EVR) 264.80p +3.64%Antofagasta (ANTO) 1,152.00p +2.86%Vedanta Resources (VED) 951.50p +2.15%Xstrata (XTA) 931.40p +1.61%Tullow Oil (TLW) 1,401.00p +1.60%Barclays (BARC) 196.95p +1.44%Wolseley (WOS) 2,539.00p +1.32%BHP Billiton (BLT) 1,972.50p +1.31%FTSE 100 - FallersKazakhmys (KAZ) 696.50p -1.14%SABMiller (SAB) 2,753.50p -1.13%IMI (IMI) 875.50p -0.91%SSE (SSE) 1,344.00p -0.74%National Grid (NG.) 688.50p -0.72%Land Securities Group (LAND) 799.50p -0.68%Next (NXT) 3,585.00p -0.64%Centrica (CNA) 324.20p -0.55%United Utilities Group (UU.) 711.00p -0.49%Rolls-Royce Holdings (RR.) 836.00p -0.42%FTSE 250 - RisersAquarius Platinum Ltd. (AQP) 41.10p +5.38%Perform Group (PER) 388.10p +4.89%WH Smith (SMWH) 608.00p +4.47%Hansteen Holdings (HSTN) 77.30p +3.34%Soco International (SIA) 345.20p +2.74%SIG (SHI) 96.50p +2.50%Man Group (EMG) 78.50p +2.21%Hochschild Mining (HOC) 439.00p +2.12%Talvivaara Mining Company (TALV) 143.10p +2.07%Ferrexpo (FXPO) 193.00p +2.06%FTSE 250 - FallersPetropavlovsk (POG) 418.40p -10.77%AZ Electronic Materials SA (DI) (AZEM) 293.10p -3.59%Ruspetro (RPO) 145.50p -3.00%Heritage Oil (HOIL) 202.40p -2.69%NMC Health (NMC) 191.50p -2.49%Chemring Group (CHG) 371.50p -1.62%Redrow (RDW) 141.00p -1.54%Shanks Group (SKS) 86.65p -1.53%Home Retail Group (HOME) 93.95p -1.21%Spirax-Sarco Engineering (SPX) 1,955.00p -1.11%BC