London's blue-chip FTSE 100 Index made sharp gains this morning as the IMF reduced its estimate of bank writedowns.
Gordon Brown reiterated his party's intention to bring morals to the markets, as part of Labour's proposed new rules covering bankers' behaviour.
The International Monetary Fund (IMF) today adjusted its estimates for global writedowns for banks and financial institutions from US$4 trillion to US$3.4 trillion.While this remains good news, the improvement reflects rising securities values and new methods in calculating writedowns, and the IMF has strongly cautioned that loan losses would rise as unemployment, and the ills that accompany it, increase.
The IMF further cautioned that the risk of another downward surge in the economy was 'significant',and that much still needed to be done to ensure a sustainable, long term recovery.
Gordon Brown gave his views and plans on what the Labour party proposed to do to ensure a British recovery. Speaking at Labour's 2009 Conference in Brighton, the prime minister stressed the need for morals in the market place, and confirmed that it was his intention to force morals where necessary by intervening on bankers' bonuses where they were deemed to be putting the economy at risk.
By around 11am, the FTSE 100 had climbed to 5185.19 points, an improvement of 25.47 points (+ 0.49%) on yesterday's close. The broader FTSE 250 was also on the move this morning, trading 59.68 points (+ 0.65%) up on its previous close at 9275.25.
Both the Cac 40 and the Dax were ahead in morning trading as well. At 11am (London time) the CAC 40 was 23.26 points (+0.61%) up at 3837.36 and the Dax had climbed 22.52 points (+0.39%) to 5736.04.
September was another consistently strong month for the FTSE. However, growth for the period looks like finishing slightly lower than in previous months, with fears that the economy has been moving too quickly out of recession tempering the blue-chip index's continued good health. Still, at current levels, the FTSE should leave September about 270 points (+5.5%) better off than when it entered the month. This is down on August (+6.52%) and July (+8.45%).
Insurers were among the morning's biggest gainers, with Legal and General up 5.25p (+6.34%) to 88p, Standard Life up 10.9p (+5.11%) to 224.1p, and Aviva up 21.3p (+4.94%) to 452.5p.
Investor Man Group made the most of the morning, climbing 22.3p (+7.27%) to 330.5p, while Smiths Group was also up, by 51p (+6.09%), to 889p.
In contrast, retailers struggled in early trading today. Retail major Marks & Spencer was down 2.13% (-8p) at 366.8p, apparel retailer Next traded 1.46% lower (-27p) at 1823p and Home Retail Group was 1.11% down (-3.1p) at 276.9p. Travel services group Thomas Cook slipped by 1.37% (-3.3p) to 237.5p.
Looking ahead to the afternoon, the US is expecting Q2 annualised GDP figures at 1.30pm (London time), while in the UK tomorrow morning, September manufacturing PMI figures will be released at 9.30am (London time).
