Market overview: Stocks surge on ECB speculation

1630:Close Stocks surged on the heels of reports that the ECB was contemplating expanding its asset purchase programme to include corporate bonds. Although there was no confirmation to be had the mere possibility of the above sent traders into a frenzy. As markets stabilised a tad further following two weeks of heightened volatility travel and oil-related stocks bounced back. ARM Holdings was a laggard after analysts at Liberum reiterated their sell recommendation following the company’s third quarter results. Tesco was a notable gainer after figures from Kantar Worldpanel revealed the firm’s sales slowdown might be easing. FTSE 100 up 105 to 6,372.

1419: Contrary to what their name would seem to imply hedge funds are often times anything but ‘hedged’. As Bill Hubard explains in a note to clients, this month’s turmoil has been a ‘bloodbath’ for hedge funds (which by some estimates manage $2.8trn in assets). “John Paulson’s Advantage Fund, which owned Shire shares, was down nearly 11% for October through last Tuesday, bringing the $21bn firm’s losses in that fund for the year to nearly 22%, according to data from Lyxor, the wealth-management arm of Société Générale SA that invests client money in hedge funds. That was before Shire fell 30% on Wednesday in New York!!!!,” Hubard explained.

1405: Today’s surge in European equities is being attributed by some market commentary to reports that the European Central Bank (ECB) is considering the purchase of corporate bonds. The announcement led to a 20 basis point drop in the iTraxx Cross-over index and in turn dragged Italian and Spanish 10-year bond yield lower by 10 basis points each, explains RBS’s Alberto Gallo. Gallo cautioned that the plan is only under consideration, further pointing out how the European Central Bank in fact runs the risk – unless lending picks up – of either not being able to buy what it needs or it could gradually crowd-out other market participants.

1208: Liberum has reiterated its sell recommendation on shares of ARM Holdings, telling clients that: "While licensing continues to be strong for the company, we expect royalty growth to disappoint as smartphone and tablet growth continues to slowdown."

1103: UKFI chairman says he is closer to sale of RBS stake, according to reports. He appears to be speaking before the Treasury Select Committee.

0931: Tesco's market share slipped to 28.8% over the 12 weeks ending on 13 October.

0930: Public sector net borrowing excluding public sector banks from April to September 2014 was £58bn, up £5.4bn compared with the same period in 2013/14. The monthly borrowing figure was £11.8bn in September 2014 (consensus: £10.2bn), up £1.6bn against September 2013.

0929: Growth in international air passengers improved 4.5% year-on-year in August, IATA says.

0857: Credit Suisse shifts Lloyds target price from 68p to 72p and stays with its neutral rating.

0845: Arm Holdings is in the lead early on after the release of its interims in what had been a rather lacklustre start to trading today on the Footsie. GKN is following in its wake despite telling investors that organic growth will be “modest” going forward. Propping sentiment are the better-than-expected results out from tech heavyweight Apple overnight. Stock in Asos is leaping 16% higher in early trades. Nevertheless, the tech giant’s shares ended the after-hours session up by just 1.5%. GDP out in China printed slightly above economists’ forecasts, but some analysts are highlighting the fact that the figures mark the slowest rate of expansion in five years. FTSE 100 up 3 points to 6,271.