New Bank of England governor Mark Carney sparked a shares surge today as policymakers hinted that low interest rates would continue for the foreseeable future.
The FTSE 100 Index rose more than 3%, or 191.8 points, to 6,421.7, following the Bank’s first rates meeting under the Canadian’s stewardship. All except two companies in the top-flight were on the rise as nearly £50billion was added to the value of the UK’s blue-chips.
The surge was further fuelled by a commitment from European Central Bank chief Mario Draghi that its rate would also remain low for “an extended period of time”.
In London, the Bank’s Monetary Policy Committee held the bank rate at 0.5% and left its quantitative easing programme unchanged at £375billion, as widely expected.
But it surprised the City by issuing a note in which it said expectations of a rate rise to come next year were “not warranted”, helping the markets cast aside earlier worries over eurozone debt fears and the turmoil in Egypt.
On the FTSE 100, easyJet shares were up by more than 3%. The low-cost airline said it carried 100,000 more passengers in June than in the same period last year, a 1.9% rise taking the total to 5.5million. The stock has risen more than three-fold in the last two years and climbed further today, up 47p to £13.67.
Housebuilders did well on the FTSE 250 Index as a trio of positive updates reflected improving consumer confidence, the brighter economy and government stimulus schemes.
Taylor Wimpey rose 6.8p to 103.8p, a gain of 7%, Redrow surged 7% or 15.9p to 237.9p and Galliford Try shares were up 22.5p at 997.5p.
Top-flight housebuilder Persimmon shares were also buoyant, climbing 53p to £12.66, a rise of more than 4%.
The biggest FTSE 100 risers were Royal Bank of Scotland, up 14.1p to 284.1p, Wolseley rising £1.55 to £32, Standard Chartered up 69p to 1,496.5p and Rolls-Royce climbing 53p to £11.91.
The only two FTSE 100 fallers were Schroders, down 19p to £22.36 and BSkyB, off 1.5p at 812.5p.
Elaine McLachlan, of investment manager and financial planning specialist Brewin Dolphin in Inverness, noted that risers included Anglo Pacific Group, up 8.1% to 174.5p and Standard Life rising 4% to £3.68.
Fallers included Plexus Holdings off 5.4% to £1.74, Xcite Energy 0.7% lower at 100.9p and Devro down 0.17% at 291.4p.
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