Date: Thursday 26 Jul 2012
- Stocks surge on comments from ECB head
- Peripheral bond yields drop
- Rolls, ITV and Unilever lead gainers on Footsie
Mario Draghi’s pledge to do whatever it takes to save the euro saw stocks worldwide rocket toda,y as markets attempt to regain lost ground from the steep sell-off earlier this week.
Italian and Spanish bonds surged on Thursday after the President of the European Central Bank (ECB), Mario Draghi, said the bank would do “whatever it takes to preserve the euro...and believe me, it will be big enough”. This is the clearest indication yet the ECB may be prepared to buy the debt of under pressure Eurozone countries in order to drive down yields.
Speaking in London, he said: "To the extent that the size of the sovereign premia hamper the functioning of the monetary policy transmission channels, they come within our mandate."
Yields on 10-year Spanish and Italian bonds dropped 44 basis points and 36 points on the secondary market this afternoon, meaning that borrowing costs for 10-yar Spanish debt were back below the ‘unsustainable’ level of 7%.
Markets were lifted yesterday afternoon after ECB policy-maker Ewald Nowotny suggested that the European Stability Mechanism (ESM) should be given a banking licence, which could help it provide bigger loans to struggling countries.
If that wasn’t enough, markets were attempting to digest a flurry of corporate results today, with several heavyweight blue chips providing big swings in the London market this afternoon.
Power systems group Rolls-Royce advanced after saying that underlying revenues and pre-tax profits rose 5% and 7% in the first half, respectively, and said it expects "good" growth for the full year.
Broadcaster ITV surged after reporting double-digit revenues and profit growth in the first half, as its 'Transformation Plan' "continues to gain momentum", according to CEO Adam Crozier.
Consumer products firm Unilever jumped after turnover increased 11.5% in the first six months of the year. CEO Paul Polman said that the group is continuing to deliver volume growth ahead of its markets and gained value share across the majority of the business.
Intertek, the international provider of quality and safety services, also gained after it delivered soaring revenues and strong profit growth in the six months to the end of June.
Publishing group Reed Elsevier was a high riser after underlying revenues grew 5% in the first half, with all five business areas showing growth.
Catering firm Compass also rose after delivering a "good" performance in the third quarter, as strong growth in North America and emerging markets offset weakness in Europe.
Oil major Royal Dutch Shell was leading the fallers after second-quarter earnings dropped from $8bn to $6bn in the second quarter, as profits have tracked energy prices lower.
Real estate investment trust Capital Shopping Centres Group (CSCG) fell after reporting a 2.3% LFL decline in net rental income in the first half.
Banking group Lloyds fell after posting a half-year loss of £439m and upping its PPI provisions by £700m. Nevertheless, underlying profits increased from £715m to £1.1bn.
FTSE 100 - Risers
Polymetal International (POLY) 873.50p +7.64%
Rolls-Royce Holdings (RR.) 885.00p +6.69%
ITV (ITV) 75.85p +6.23%
Unilever (ULVR) 2,256.00p +5.42%
Reed Elsevier (REL) 544.00p +5.32%
Intertek Group (ITRK) 2,831.00p +5.20%
Compass Group (CPG) 682.00p +4.52%
Evraz (EVR) 220.70p +4.35%
Weir Group (WEIR) 1,600.00p +4.23%
Wolseley (WOS) 2,330.00p +4.06%
FTSE 100 - Fallers
Royal Dutch Shell 'B' (RDSB) 2,208.00p -2.52%
Royal Dutch Shell 'A' (RDSA) 2,137.50p -2.26%
Admiral Group (ADM) 1,118.00p -1.58%
Carnival (CCL) 2,083.00p -1.42%
Pennon Group (PNN) 754.50p -1.18%
Capital Shopping Centres Group (CSCG) 325.90p -0.67%
Lloyds Banking Group (LLOY) 29.14p -0.53%
Rexam (REX) 435.70p -0.53%
British Land Co (BLND) 531.00p -0.19%
Hammerson (HMSO) 466.50p -0.11%
FTSE 250 - Risers
Laird (LRD) 213.00p +15.45%
Talvivaara Mining Company (TALV) 132.00p +7.40%
Avocet Mining (AVM) 71.60p +6.63%
St James's Place (STJ) 339.50p +6.49%
Drax Group (DRX) 469.00p +6.11%
Moneysupermarket.com Group (MONY) 141.20p +5.45%
Petropavlovsk (POG) 421.70p +5.21%
Taylor Wimpey (TW.) 44.91p +5.13%
Imagination Technologies Group (IMG) 504.50p +5.10%
easyJet (EZJ) 569.50p +4.98%
FTSE 250 - Fallers
De La Rue (DLAR) 1,016.00p -4.60%
Synergy Health (SYR) 920.00p -3.11%
Cookson Group (CKSN) 533.00p -2.83%
Daejan Holdings (DJAN) 2,834.00p -2.51%
BTG (BTG) 381.00p -2.41%
Capital & Counties Properties (CAPC) 208.30p -1.75%
London & Stamford Property (LSP) 113.00p -1.57%
Ferrexpo (FXPO) 173.60p -1.53%
Genus (GNS) 1,270.00p -1.24%
Diploma (DPLM) 442.00p -1.18%
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