LONDON, July 11 — London’s main index snapped a four-day losing streak today as dovish comments from the US central bank reinforced bets of an interest rate cut and lifted broader sentiment, while Reckitt gained after agreeing to settle with US authorities.
The FTSE 100 added 0.3 per cent, with the biggest support from oil majors, while the mid-cap FTSE 250 rose 0.5 per cent by 0752 GMT.
US Federal Reserve Chairman Jerome Powell yesterday said the central bank was prepared to “act as appropriate” to counter a threat to the economy from the effects of a trade dispute with China and disappointing factory activity, stoking hopes that the Fed would cut interest rate later this month.
“His (Powell’s) comments though did nothing to nudge market expectations towards a more neutral position,” Markets.com analyst Neil Wilson said.
“Investors are buying the Fed put hook, line and sinker.”
Reckitt Benckiser added 2.7 per cent after it agreed to pay up to US$1.4 billion (RM5.7 billion) to resolve all US federal investigations in connection with the sales and marketing of Suboxone Film by its former unit Indivior.
“With this settlement, management draws a line under an issue that would, at best, have resulted in additional cost/distraction/uncertainty and could, at worst, have led to much more costly and protracted legal proceedings,” Deutsche Bank analysts said.
Indivior, which has plummeted 44 per cent so far this year, gained 24 per cent after it raised its annual profit and revenue forecast in a separate statement as Suboxone lost market share at a slower pace than expected.
An index of homebuilders was on course for its best day in roughly five months with a 2.4 per cent rise after a survey revealed the housing market had shown tentative signs of recovery in June.
Shell, FTSE 100’s most valued component by market cap, and BP rose, with oil futures at six-week highs as rigs in the Gulf of Mexico were evacuated ahead of a storm.
Industrial stocks thrust the midcap bourse higher, led by an 3.6 per cent rise in engineering company Meggitt and a 3.5 per cent gain in defence contractor Cobham after rating upgrades.
Among smaller stocks, world’s oldest tour operator Thomas Cook surged 7.3 per cent after peer and Jet2 owner Dart Group reported higher annual earnings as Britons booked more holidays. Dart shares were 3.8 per cent higher. — Reuters