The FTSE 100 rebounded from yesterday’s losses in early trading, gaining 39.48 points to reach the 4568.32 mark by 11am.
Other leading indices also tracked up, with the German DAX 1.62% higher at 5258.58, and the French CAC up 1.49% at 3380.59 as banking sector gains and ratings upgrades offset early weakness in the mining sector.
The biggest winner on the FTSE 100 was asset management company Schroders, which saw its shares climb 5.36% to 826.00p at 11 am, following a Morgan Stanley ratings upgrade. Aviva was also buoyant on the back of a broker upgrade, up 2.48% to 340.25p, after Deutsche Bank raised its UK insurance sector rating. An improved profitability forecast helped Cadbury, the world’s largest confectioner, to sweeten its share price by 0.44% to 567.00p.
Lacklustre metal prices drove mining shares lower on open, with copper, nickel and tin prices falling on the London Metals Exchange. BHP Billiton sank 10p to 1529p by 11am today.
Rexam, the drinks-can maker, was the index’s largest loser this morning, however, following plans to scrap its interim dividend payment and raise £334 million through a rights issue. After tough trading conditions for the company, this is a measure aimed at reducing their net debt of £2.1 billion.
This morning’s economic news has been on the positive side: the latest housing market data from the Bank of England has highlighted a summer boom. According to the BoE, mortgages approved in June were the highest since April last year, rising to 47,584 from 44,169 the previous month. Analysts surveyed by Bloomberg had been expecting the figure to come in at 47,000.
‘We’re expecting to see mortgage approvals rise as the banking crisis begins to ameliorate. The bank will be mildly encouraged by these figures. I don’t see a change in the bond purchases or in rates,’ said George Buckley, an economist at Deutsche Bank AG in London, following the report.
Looking ahead, economic indicators due in the US include the Fed Beige Book, followed by crude oil inventories and durable goods orders for June. An equally busy US earnings calendar this afternoon includes quarterlies from Time Warner and Coca-Cola Enterprises.
