UK Stocks closing : Britain’s top shares advanced on Thursday as sentiment was lifted by hopes policymakers will take the necessary measures to stabilise stressed European banks and by the Bank of England’s decision to launch a second round of ‘quantitative easing’.
Central banks have come to the party and said ‘look, we’re really concerned about growth; we’re going to take steps to boost the economy, or support the banking system, Michael Hewson, analyst at CMC Markets, said.
I think that tells investors that there is some sort of consensus forming, he said.
Financials were among the top gainers. Prudential lurched almost 12 percent to the top of the FTSE 100 leader board, while Standard Chartered and Lloyds Banking Group enjoyed near 9-percent gains.
European Commission President Jose Manuel Barroso said the EU’s executive body proposed a coordinated recapitalisation of banks, in the clearest statement yet from a top EU official on joint action to help restore confidence in the sector.
Separately the Bank of England’s monetary policy committee voted for a second round of ‘quantitative easing’ by buying 75 billion pounds ($116 billion) of assets to keep the UK’s sluggish economic recovery going.
The central bank also kept interest rates on hold at a record-low 0.5 percent.
With inflation expectations falling back sharply next year and (finance minister) George Osborne saying the treasury is exploring further policy options to complement QE this will have a positive impact on the market, Atif Latif, director of equities and derivatives at Guardian Stockbrokers, said.
The European Central Bank also kept rates unchanged, at 1.5 percent, while outgoing ECB boss Jean-Claude Trichet’s more gloomy prognosis for the euro zone’s economy than last month was expected to encourage investors to believe a rate cut is not far away.
The FTSE 100 closed up 189.09 points, or 3.7 percent, at 5,291.26, eradicating losses sustained in the first two trading days this week.
Miners gained in tandem with base metals as investors took heart from U.S. data that hinted at an improvement in the labour market and on the European policymakers’ comments on dealing with the region’s debt crisis.
Antofagasta and Eurasian Natural Resources , up 10.2 percent and 9.7 percent respectively, were the top performers in a sector which has lost almost a third of its value in 2011.
New U.S. claims for unemployment benefits rose less than expected last week, according to a government report on Thursday.
Industrials IMI and Weir Group , sensitive to the economic cycle, enjoyed respective gains of 11.5 percent and 6.6 percent.
Elsewhere, brewer SABMiller jumped 7 percent, in volumes more than four and a half times its 90-day daily average, on Brazilian press reports that Anheuser-Busch InBev is set to make an $80 billion move on the firm.
SABMiller declined to comment.
On the downside, Man Group slipped 1.2 percent, topping the blue-chip fallers’ list, in the wake of the hedge fund manager’s recent disappointing trading update.