London midday: Stocks jump as Fed signals "patience", resource shares gain

Upbeat economic data and a positive reaction to comments from the Federal Reserve were helping to push UK stocks higher on Thursday, with markets in positive territory for the third straight day.

The FTSE 100 was up 1% at 6399 by around midday after figures showed that UK retail sales surged in November and business confidence in Germany improved.

Meanwhile, markets were tracking gains on Wall Street on Wednesday after a massive surge on the back of the Federal Open Market Committee (FOMC) meeting.

“Equities in Europe are trying hard to take advantage of a dovish, US Federal Reserve-led rally in the States last night,” said Will Hedden, a premium client manager at IG.

The central bank didn't remove its “considerable time” language but added that it “can be patient” about tightening. Fed chair Janet Yellen said she doesn’t see the Fed raising rates for “at least the next couple of meetings”.

“The comments by chair, Janet Yellen, that this alteration in language did not actually mean a change in its outlook helped put a rocket under equities for the final part of last night’s session,” Hedden said.

In economic data, UK retail sales grew more than forecast in November, boosted by Black Friday sales, according to the Office for National Statistics. Sales rose 6.9% in November, accounting for the highest year-on-year increase since May 2004. It beat analysts expectations for a 4.5% gain and followed a 4.9% climb a month earlier.

German business confidence rose in line with expectations in December, the IFO Institute for Economic Research said. Ifo’s business climate index increased to 105.5 from 104.7 a month earlier.

Energy stocks, miners rise strongly

Oil service stocks such as Petrofac and explorers including Tullow, Enquest and Afren were on the rise after a strong rebound in oil prices, with Brent now firmly above $60 a barrel. Miners Randgold, Fresnillo and Anglo American were also advancing as metals prices gained.

Stock exchange operator LSE was in demand after saying it has made ”good progress” over the course of 2014. Some £41bn of equity capital was raised on LSE’s markets during the 11 months to 30 November, compared with £26.7bn the year before, while new issues jumped by 38%.

Also higher was British pharmaceutical giant Astrazeneca after it received marketing authorisation from the European Commission for its Lynpaza capsules.

Royal Mail was putting in decent gains after a report found that the company was £180m underpriced in its stock-market flotation last year.

Part-nationalised banking group Lloyds was lower amid speculation that the government will soon resume the sell-down of its 25% remaining stake in the lender. The sale of a further 10% could raise up to £3bn, reports suggest.

Water provider United Utilities was automatically a heavy faller on the FTSE 100 after going ex-dividend, meaning that investors no longer quality for the latest dividend payout. FTSE 250 groups Berkeley, Greene King, Halfords, Marston’s, Mitie and Polymetal also went ex-dividend.

Market Movers
techMARK 2,889.81 +0.90%
FTSE 100 6,398.78 +0.98%
FTSE 250 15,607.77 +1.06%

FTSE 100 - Risers
Petrofac Ltd. (PFC) 739.50p +5.64%
SABMiller (SAB) 3,344.50p +4.65%
Randgold Resources Ltd. (RRS) 4,293.00p +4.28%
ARM Holdings (ARM) 963.00p +3.55%
Fresnillo (FRES) 730.50p +3.25%
Tullow Oil (TLW) 407.30p +3.09%
Aberdeen Asset Management (ADN) 421.00p +3.03%
Old Mutual (OML) 185.10p +3.00%
Admiral Group (ADM) 1,304.00p +3.00%
Meggitt (MGGT) 498.20p +2.93%

FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 1,196.00p -3.70%
United Utilities Group (UU.) 904.00p -1.53%
Land Securities Group (LAND) 1,128.00p -0.97%
BT Group (BT.A) 399.60p -0.55%
Bunzl (BNZL) 1,705.00p -0.53%
TUI AG Reg Shs (Prior To 01/10/14) (DI) (TUI) 1,122.00p -0.44%
Sky (SKY) 887.00p -0.34%
Kingfisher (KGF) 317.90p -0.28%
Intu Properties (INTU) 325.40p -0.25%
Lloyds Banking Group (LLOY) 75.23p -0.16%

FTSE 250 - Risers
EnQuest (ENQ) 39.50p +10.86%
Afren (AFR) 42.09p +10.21%
Ophir Energy (OPHR) 138.20p +8.90%
Serco Group (SRP) 170.10p +6.65%
Hunting (HTG) 521.00p +5.57%
Soco International (SIA) 287.30p +5.51%
NMC Health (NMC) 470.00p +5.50%
Premier Oil (PMO) 165.00p +5.50%
Amec Foster Wheeler (AMFW) 874.50p +5.30%
Tullett Prebon (TLPR) 284.20p +5.26%

FTSE 250 - Fallers
Aveva Group (AVV) 1,243.00p -6.47%
Foxtons Group (FOXT) 156.00p -4.65%
Berkeley Group Holdings (The) (BKG) 2,403.00p -3.92%
Drax Group (DRX) 447.00p -3.33%
Riverstone Energy Limited (RSE) 847.00p -2.64%
Kaz Minerals (KAZ) 233.30p -2.26%
Informa (INF) 453.70p -2.16%
Catlin Group Ltd. (CGL) 632.50p -1.94%
Marston's (MARS) 137.10p -1.65%
Polymetal International (POLY) 596.00p -1.32%