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Published On: Wed, May 22nd, 2013

FTSE closes 90 points off highest ever levels

The FTSE 100 closed this evening just 90 points off its highest ever levels of 6930. The index made a somewhat slow start to the day with as it waited with baited breath for news from across the Atlantic of Ben Bernanke’s comments to congress on the state of the US economy and the future of their monetary easing programme.

Initially Bernanke’s comments were well received by investors, who instantly drove the market to its peak for the day of 6,873.80. The chairman of the Federal Reserve, the United States central bank, seemed to suggest that the current policy of bond purchasing would continue for as long as necessary, adding “a premature tightening of monetary policy could lead interest rates to rise temporarily, but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further”.

The advances were short lived however, as the USA’s chief policymaker seemed to backtrack later in the session, implying that the relaxed policies could draw to a close in the coming months. This once again emphasised the importance of the US economy, as investors overlooked negative retail sales for April and a negative-neutral report from the IMF on the current British economic situation before making their decision on how to make their next moves.

The announcement didn’t really have a profound effect on which companies advanced, with the majority of the the big gainers already making solid progress prior to the hearing. Antofagasta PLC lead the LSE at the close of play with an advance of 38.00, or 3.94 percent, pulling back yet more of its losses which came as a result of the recent gold decline. Fresnillo PLC, Rio Tinto PLC and Anglo American PLC also made good gains of 2.38 percent, 2.13 percent and 1.97 percent respectively.

Bankers also enjoyed a solid day of trading, with Barclays PLC leading the pack, registering gains of 3.26 percent. Lloyds Banking Group were the second biggest advancers in the sector, adding 2.32 percent and beating their 30 day average for volume by 53m shares traded.

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About the Author

- Gregory previously worked for a leading financial news publication and is now assistant news editor of financialtrading.com.

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