London open: Stocks gain as central bankers back stimulus

28th Feb 2013 08:28

Stocks were making solid gains on Thursday morning after the heads of central banks in the US and Europe defended their current easing policies.Speaking to Senate's Banking Committee on Capitol Hill over the last two days, US Federal Reserve Chairman Ben Bernanke defended the Fed's asset purchase programme, saying that it was necessary until the job market improves substantially. He allayed fears that the central bank could start to scale down quantitative easing measures.Meanwhile, his dovish comments were echoed by Mario Draghi, the President of the European Central Bank (ECB), who said that the ECB would not tighten monetary policy with inflation expected to stay well below the 2.0% target near term. He said that policy makers are "far" from exiting stimulus measures.Markets across Europe reacted by pushing firmly into positive territory in the morning session today, though sentiment is still fragile in the wake of the inconclusive Italian elections at the weekend, which saw anti-austerity parties secure a surprising portion of the vote.Shavaz Dhalla, a financial trader at Spreadex, said this morning that today's rally is "simply an extension of yesterday's optimism which was driven by key policy officials maintaining their commitments to stimulus packages.  "However, when such optimism is based on maintaining tools to help support struggling nations, one could question whether investors should be more concerned with why such nations still require the stimulus measures at all."FTSE 100: RBS underwhelms; IAG flying highUK lender RBS slumped in morning trade despite beating analysts' profit forecasts in 2012. The bank posted core operating profits of £6.3bn, up 50% year-on-year and ahead of the £6.1bn estimate by Nomura. CEO Stephen Hester said there was "important work still to do". British Airways owner IAG soared as its operating loss of €107m for 2012 was better than the company's guidance in November of €120m.Copper giant Kazakhmys was a heavy faller after saying that it would be slashing its dividend for 2012 to reflect falling profits. The company also said that its CFO would step down in May, when its Chairman is also due to retire.British American Tobacco lit up after its 2012 revenues and volumes met forecasts and margins came in better than expected.Utilities group National Grid was a high riser after agreeing to all of the UK RIIO price-control arrangements with regulator Ofgem, which it hopes will deliver further shareholder value.Publishing and events firm Reed Elsevier also rose after reporting a rise in revenues for 2012, driven by volume growth, new products and expansion in lucrative markets. Outsourcing firm Capita fell despite reporting a solid 14% increase in revenue in 2012,while underlying operating profit gained 10%.FTSE 250: Howden Joinery and National Express jump early on Howden Joinery beefed up annual earnings and underlined its confidence in future trading with a six-fold increase in its full-year dividend. Howden, whose products are predominantly sold to small local builders for installation in public and private housing, said group revenue rose to £887.1m from £853.8m in 2011.Tranpsort group National Express was also a high riser after cheering investors with news of cost savings and an increased total dividend for 2012.FTSE 100 - RisersInternational Consolidated Airlines Group SA (CDI) (IAG) 235.30p +6.13%ITV (ITV) 124.50p +4.62%Hargreaves Lansdown (HL.) 870.50p +2.53%Reed Elsevier (REL) 713.50p +2.07%British Sky Broadcasting Group (BSY) 856.50p +1.96%National Grid (NG.) 734.00p +1.73%Pearson (PSON) 1,164.00p +1.66%Standard Chartered (STAN) 1,801.00p +1.46%Lloyds Banking Group (LLOY) 54.48p +1.45%HSBC Holdings (HSBA) 734.20p +1.27%FTSE 100 - FallersKazakhmys (KAZ) 645.00p -4.73%Petrofac Ltd. (PFC) 1,456.00p -2.74%Royal Bank of Scotland Group (RBS) 338.30p -2.45%Randgold Resources Ltd. (RRS) 5,520.00p -1.95%Eurasian Natural Resources Corp. (ENRC) 341.70p -1.53%Shire Plc (SHP) 2,072.00p -1.43%Fresnillo (FRES) 1,531.00p -1.23%Evraz (EVR) 266.70p -1.22%Antofagasta (ANTO) 1,102.00p -1.17%Anglo American (AAL) 1,936.50p -0.82%FTSE 250 - RisersHowden Joinery Group (HWDN) 204.60p +7.46%COLT Group SA (COLT) 128.80p +4.29%Stobart Group Ltd. (STOB) 96.00p +3.56%National Express Group (NEX) 202.00p +3.43%Henderson Group (HGG) 159.00p +3.31%Man Group (EMG) 106.40p +3.30%easyJet (EZJ) 1,005.00p +2.81%RPS Group (RPS) 245.00p +2.77%Home Retail Group (HOME) 128.80p +2.63%Supergroup (SGP) 646.00p +2.54%FTSE 250 - FallersSpirent Communications (SPT) 156.00p -5.91%Kier Group (KIE) 1,311.00p -2.60%JPMorgan Indian Inv Trust (JII) 390.00p -1.47%Atkins (WS) (ATK) 866.50p -1.31%Petra Diamonds Ltd.(DI) (PDL) 118.30p -1.25%Perform Group (PER) 413.15p -1.23%Menzies(John) (MNZS) 731.00p -1.08%Petropavlovsk (POG) 304.10p -1.01%Lonmin (LMI) 341.80p -0.98%Devro (DVO) 355.00p -0.89%BC