The FTSE 100 has risen almost 100 points in early trades on the back of strong markets in both the US and Asia.
At 8.44am, the blue-chip index had risen by 1.45 per cent to stand at 5239.96, at 11.31am the FTSE 100 fell back slightly to 5203, a rise of 0.75 per cent. The rise has followed a rebound in Asian markets, which in turn rose after the US Federal Reserve said it would keep interest rates on hold until 2013. Meanwhile, the German Dax was up 1.93 per cent and the French Cac 40 was up 0.4 per cent.
Japan’s Nikkei 225 index rose 1 per cent, while Hong Kong’s Hang Seng gained 2.7 per cent.
The move by the US Federal Reserve saw US markets finish strongly with the Dow Jones closing almost 4 per cent up at 11239.52. The S&P 500 was up 4.74 per cent at the close, standing at 1,172.53.
- The US Federal Reserve says interest rates are expected to stay “exceptionally low” for the next two years and hinted that it is prepared to introduce another round of quantitative easing in an attempt to bolster the economy.
- Growth forecasts published in the Bank of England’s Quarterly Inflation Report today are expected to be the latest in a line of forecasts projecting lower growth for 2011. With interest rates at an all time low of 0.5 per cent, he is likely to face questions at the following press conference about further quantitative easing.
- The Office of National Statistics says manufacturing output fell by 0.4 per cent in June, compared with forecasts of a 0.2 per cent rise. However the figure was 2.1 per cent up on June last year. The Government has repeatedly said it wants to re-balance the economy by growing the sector. Industrial production, which includes mining and energy, fell by 1.6 per cent in the three months June.
- European Central Bank president Jean-Claude Trichet has defended the “unconventional measure” of purchasing member state bonds. Speaking on French radio he said the ECB had asked measures of Italy and Spain to speed up “return to a normal budgetary situation”. He did not say which European debt the Bank was buying or how long the intervention would last, though the Financial Times reports that the ECB has bought E74bn worth in the past year.