The FTSE 100 index is up 106 points to 4,103 this morning as investors bet on a pending interest rat...
The FTSE 100 index is up 106 points to 4,103 this morning as investors bet on a pending interest rate cut in the US - a bet that already pushed up US stocks on Friday - that is likely to be followed by cuts by the Bank of England and the European Central Bank.
Such concerted effort to stave off global deflation would give a kick to corporate profits next year: that is the argument being put forward at present.
A rate cut would see cyclical stocks gain faster, which perhaps explains why BSkyB is up 39.5p to 614.5p, on hopes advertising revenues will grow, and 3i Group is up 32.5p to 521p, on hopes undervalued technology stocks will start to rise.
Retailer Dixons jumped 12p to 205p after it was added to Goldman Sachs' list of European equities that are expected to produce the best returns over the coming year.
The price war between mobile phone companies to sell cheaper camera-equiped phones in the run-up to Christmas has kicked off, but investors believe that this will help boost the market all round rather than cut into earnings.
MmO2 today announced it would sell a camera-phone for less than £100, which helped boost its share price by 2.75p to 49p, closely followed by Vodafone, which has gained 5.75p to 105p - although that has more to do with its pending bid for French mobile phone operator Cegetel.
Banking stocks are also performing well in advance of this week's Monetary Policy Committee meeting setting interest rates.
Barclays is up 17.75p to 450.75p, HBOS is up 27p to 725p, and Standard Chartered is up 28.5p to 770.5p.
Mid-cap stocks are doing well and the FTSE 250 index is up 46 points to 4,460.
British Airways is the best performer, up 13p to 156.25p ahead of tomorrow's results - and following positive gains by competitor Ryanair.
Rumours of a takeover have pushed FitnessFirst shares up 8p to 104p.
A change of directors at Game Group has made investors nervous, pushing shares down 3p to 110p.
Other stock markets have done well today too, with Tokyo's Nikkei 225 index up 45.24 points to close at 8,685.72, while Hong Kong's Hang Seng index is up 313.15 points at 9,720.83.
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