Tesco helps FTSE to set 2-week high, ECB eyed
today Jan 19, 2015
LONDON, United Kingdom - Britain's top share index hit a two-week high on Monday, led by Tesco following its upgrade by Morgan Stanley and improving sentiment on growing expectations of further stimulus from the European Central Bank.
Shares in Tesco, the world's third-biggest retailer, lifted 2.4 percent after Morgan Stanley raised its stance to "overweight" from "equal weight" and added the stock to its "best ideas" list. The broker also expected Tesco's projects asset disposals to net 12 to 17 billion pounds ($18.2-25.8 billion).
The blue-chip FTSE 100 index rose for a third straight session and was up 0.3 percent at 6,570.82 points by 0923 GMT after rising as much as 8,589.20, the highest since early January.
"The FTSE had a good run recently and may remain higher on expectations of some quantitative easing measures from the ECB at its policy meeting. However any disappointment from the central bank could hit the markets quite sharply," Jawaid Afsar, sales trader at Securequity, said.
The ECB's crucial policy meeting is scheduled for Thursday. Expectations are growing that the bank will announce a scheme to buy government bonds to bolster the euro zone economy, a step known as quantitative easing (QE).
The banking sector was among the top gainers, with the UK banking index rising 0.6 percent. Barclays , Standard Chartered and Royal Bank of Scotland were up 0.8 to 1.5 percent.
However, the FTSE 100's gains were limited by weaker commodity shares before data from China, which is expected to report on Tuesday that its economic growth slowed to 7.2 percent in the fourth quarter, the weakest since the global financial crisis.
The UK mining index fell 1.4 percent, while the energy index was down 0.7 percent. Shares in BHP Billiton, BP and BG Group were down 0.7 percent to 1.4 percent. Rio Tinto fell 1.8 percent, the top faller in the FTSE 100, as Exane BNP Paribas cut its target price for the stock by 5 percent to 3,450 pence.
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