With the encouragement of a US rally behind them investors finally decided to buy into stocks that h...
With the encouragement of a US rally behind them investors finally decided to buy into stocks that have tumbled in the past week. Selected telecom, computer-related and financial stocks received the lion's share of the buying. With trading in the US getting off to a decent start the FTSE 100 finished on a positive note and posted a decent rise of just over 100 points.
Despite today's buying optimism there's a growing consensus amongst brokers that equity prices still have some way to fall before they'll move overweight in them.
The FTSE 100 rallied 103.3 points to 5729.2 and the technology biased techMark advanced 35.67 closing at 2172.25.
Many of yesterday's worst hit FTSE 100 constituents bounced back today with Energis, top riser, up 35p to 360p, Celltech gaining 90p to 1220p and Colt Telecom adding 58p to 996p.
Even today's familiar dose of corporate warnings failed to upset markets. Yesterday's rumours proved half true as telecom bellwether Nokia admitted that global mobile phone sales growth in the first quarter will be about 10% less than its forecasts of between 25% to 30%. Despite this Nokia said its profit forecast will remain the same and markets across Europe reacted positively to the news.
Shares in tiddler stock European Telecom slumped to a record low after the group confessed its system development costs had exceeded expectations. To worsen matters, its 50% share of the losses at Global Telematics also rocked in beyond expectations. No surprise then that the group expects to report a significant loss for the year as well as a spread of redundancies. Shares plummeted 14.75p to 24.25p.
NetBenefit shares also dived to an all-time low after the internet services business unveiled a pretty dire set of interim results. Losses rocketed to £6.6m compared to £473,000 last year. Ominously, the group's sales are steadying and monthly cashflow, starting next month, will come down to a break-even level. Shares tumbled 10p to 47.5p.
At midday US markets echoed UK sentiment with investors snapping up stocks deemed to have fallen too far in the past week.
The Dow Jones added 56.6 points to 10030.06, the Standard & Poor's advanced 9.83 to 1176.52 and the technology biased Nasdaq Composite recovered 37 points at 2009.09.
By Andy Wild
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