FTSE 100 rises for second successive day, US stocks also advance
The FTSE 100 advanced on Tuesday, clawing back some of its declines over the last month and a half as fears of quantitative easing slowly begin to take a backseat in the minds of investors in the markets appear to be returning to their bullish nature, which was seen throughout the first half of the year. Banks once again led the London blue-chip index, supported by impressive gains from the mining sector.
The Royal Bank of Scotland was again at the forefront of financial news in London as investors continued to show great faith in the stocks after yesterday’s announcement that there were a number of companies and funds that were prepared to take on the government’s stakeholding in the nationalised bank. Additionally, Goldman Sachs altered their rating for RBS stocks from neutral to buy. This drove the Royal Bank of Scotland to 304p per share, an increase of 15.6p, or 5.40 percent, for the day.
The FTSE 100 itself increased by 63 points to close at 6513.08, extending its month-long high from yesterday’s trading. With the recent concerns from Greece finally being put to rest after finance ministers across the eurozone supplied the financially stricken nation with a fresh three billion-dollar bailout package, the outlook for Europe as whole looks substantially better than it did this time last month. However things were not so positive in Asia, where China saw yet more data released that suggested they were going to be faced with an economic slowdown of epic proportions in the very near future.
Ordinarily this would have led to heavy declines in the mining sector, just as we have seen on numerous occasions over the last few weeks. However, due to better than expected results for the quarter from Alcoa, one of the world’s largest aluminium manufacturers, many miners so impressive gains as concerns over the long-term demand for base metals eased.
Among the sector’s biggest gainers were Vedanta Resources Plc which led the FTSE 100 in gains with a rise of 8.53 percent, or 86.000, closing the session at 1094.00. Fresnillo PLC, Anglo American PLC and Weir Group PLC, who provide mining tools and equipment, all saw significant advances, rising by 3.26 percent, 2.97 percent, and 2.76 percent respectively.
Across the Atlantic in New York, the US markets had an incredibly strong day of trading. The Dow Jones Industrial Average advanced by 75.65 points, or 0.50 percent, to close the second trading session of the week at 15,300.30. The technology heavy NASDAQ added 19.43 points, or 0.56 percent, ending the day at 3504.26, while the broader S&P 500 made the biggest percentage based advance of the day, rising by 0.72 percent, or 11.86 points, reaching 1652.32 points. Gold, Western Texas Intermediate crude oil and US 10 year bonds were all also up for the day.