LONDON (ShareCast) - - US jobless claims boost buying late on
- BoE keeps interest rates, QE unchanged
- Miners shrug off China data as Greek concerns ease

London’s blue chips rallied in afternoon trade on Thursday after some better-than-expected US economic data and easing concerns about Greece helped to snap a three-day losing streak for the FTSE 100.

The Bank of England revealed at lunchtime that it had maintained the bank rate once again at the record-low level of 0.5% (a rate not changed since March 2009) and kept the size of the asset purchase programme at £325bn. While the decision was widely expected by analysts, there were some who speculated whether additional quantitative easing would be necessary after it was revealed that the UK was in recession.

In other domestic news, UK industrial production fell by 0.3% from February to March. Analysts were expecting a 0.2% decline. Manufacturing output however grew by 0.9%, well ahead of the 0.4% gain foreseen by the consensus.

US weekly initial unemployment claims fell by 1,000 to 367,000 last week according the latest data from the US Labor Department, despite economists expecting an increase to 369,000. “The fact that initial claims held their decline last week is supportive of the idea that the recent softness in initial claims has reversed,” said analysts at Barclays Capital.

Despite the ongoing political uncertainty that surrounds the Greek government, sentiment was lifted last night after the news that the Eurozone bailout fund (European Financial Stability Fund) would release a €5.2bn payment to Greece (€4.2bn now, €1bn later), allowing the debt-laden country to put off a default at least until the next elections, given the failure by the government to form a viable coalition.

FTSE 100: Resource stocks provide a lift

Mining stocks shrugged off some downbeat data from China today and were performing strongly by the close, with Polymetal, Fresnillo and Vedanta finishing firmly higher. Chinese trade data showed weaker-than-expected activity in April (particularly in imports) which raised hopes that the authorities will loosen their monetary policy. ENRC was also on the rise despite seeing a "significant" decline in group revenue in the first quarter, mainly as a result of a strong comparator and falling commodities prices.

The Organization of the Petroleum Exporting Countries (OPEC) today said that global oil demand would grow by 900,000 barrels a day (bpd) in 2012, above its previous estimate of 800,000bpd growth. "Given the stabilisation of the US economy and the shutdown of the Japanese nuclear power plants, world demand has - at least, for the short term - stopped its decline and has begun to show growth,” it said. Oil services stocks Petrofac and AMEC and oil producers Tullow Oil, BG Group and BP finished the day firmly higher.

Chip designer ARM Holdings was a high riser after Bernstein upgraded its rating on the stock from underperform to market perform and raised its target price from 460p to 490p. Meanwhile, Seymour Pierce initiated coverage on ARM today with a buy recommendation.

Risk, savings and investment management provider Legal and General rose strongly after replacing its CEO Tim Breedon with CFO Nigel Wilson. Financial peer Old Mutual was higher after saying it saw positive net client cash flows throughout the group in the first quarter, while sales continued to be strong in emerging markets.

Anglo-Dutch consumer goods firm Reckitt Benckiser was firmly lower after its biggest shareholder (JAB) sold around a third of its holding (4.9% of the issued share capital of Reckitt). The shares went at 3,350p a pop, raising a total of £1.2bn for JAB.

Experian, the credit check and financial data company, dropped after reporting underlying earnings below expectations for the full year to the end of March, while announcing the sale of its PriceGrabber price comparison service.

Telecoms titan BT was lower after full-year revenue slipped 4%. Underlying revenue excluding transit revenue was down 1.9% for the year, within the group's target range, but underlying pre-tax profit rose 17% to beat expectations.

FTSE 250: Petra Diamonds still sparkling a day later

Petra Diamonds jumped, extending gains made yesterday when it said it had doubled production in its third quarter, driven by its purchase of the Finsch mine in South Africa. Sector peer Bumi was heading in the opposite direction after saying that its operating performance "impacted by seasonal high level of rainfall in Kalimantan...and a strike at one of PT Bumi's contractors".

Business software firm Micro Focus International rose after saying earnings for the financial year just ended will be near the top end of the range of forecasts from investment analysts who follow the company.

House builder Barratt Developments was in demand after reporting its "strongest spring selling season for five years".


FTSE 100 - Risers
Polymetal International (POLY) 816.50p +6.38%
Lloyds Banking Group (LLOY) 31.20p +4.31%
ARM Holdings (ARM) 507.50p +4.10%
Old Mutual (OML) 149.70p +4.03%
Hargreaves Lansdown (HL.) 516.00p +3.97%
Barclays (BARC) 208.80p +3.19%
Weir Group (WEIR) 1,560.00p +3.04%
Fresnillo (FRES) 1,417.00p +2.98%
Petrofac Ltd. (PFC) 1,618.00p +2.80%
Vedanta Resources (VED) 1,118.00p +2.66%

FTSE 100 - Fallers
Experian (EXPN) 910.00p -4.31%
Reckitt Benckiser Group (RB.) 3,440.00p -3.53%
BT Group (BT.A) 211.50p -2.62%
Burberry Group (BRBY) 1,441.00p -1.44%
Imperial Tobacco Group (IMT) 2,497.00p -1.42%
Diageo (DGE) 1,535.00p -1.41%
International Consolidated Airlines Group SA (CDI) (IAG) 163.00p -1.21%
Associated British Foods (ABF) 1,196.00p -1.16%
Capita (CPI) 654.50p -1.06%
British American Tobacco (BATS) 3,092.00p -0.87%

FTSE 250 - Risers
Imagination Technologies Group (IMG) 632.00p +18.80%
Petra Diamonds Ltd.(DI) (PDL) 150.00p +16.82%
Supergroup (SGP) 333.00p +8.47%
Micro Focus International (MCRO) 459.10p +7.95%
Kesa Electricals (KESA) 56.00p +7.49%
AG Barr (BAG) 1,117.00p +6.28%
Heritage Oil (HOIL) 135.70p +6.18%
International Personal Finance (IPF) 241.30p +5.93%
Logica (LOG) 73.85p +5.80%
Centamin (DI) (CEY) 64.15p +5.77%

FTSE 250 - Fallers
Bumi (BUMI) 462.60p -4.81%
Northgate (NTG) 193.30p -3.35%
Tullett Prebon (TLPR) 308.60p -2.71%
Salamander Energy (SMDR) 173.00p -2.37%
Cobham (COB) 215.80p -2.35%
Inmarsat (ISAT) 458.20p -2.20%
Fidessa Group (FDSA) 1,500.00p -2.09%
Greene King (GNK) 497.60p -1.76%
Filtrona PLC (FLTR) 459.50p -1.69%
Homeserve (HSV) 245.30p -1.49%

BC

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