US interest rates news boosts FTSE

The FTSE 100 Index moved back above the 5800 barrier today as investors welcomed the latest round of news from the United States over interest rates.

The FTSE 100 Index moved back above the 5800 barrier today as investors welcomed the latest round of news from the United States over interest rates.

Global stockmarkets rallied after comments from the US Federal Reserve suggested it may pause for breath after increasing the cost of borrowing for the 17th month in a row last night.

The indication, which came in the text of the Fed announcement, lifted the Dow Jones Industrial Average by 2% yesterday – its biggest one-day rise for three years – and sent the Footsie up 44.2 points to 5835.7 by lunchtime.

Miners were among the main beneficiaries as fears that higher interest rates will curb world economic growth started to diminish.

They were also buoyed by the rising cost of metals such as gold and copper as Kazakhmys gained 39p to 1215p, Vedanta Resources jumped 38p to 1374p and Anglo American put on 44p to 2207p.

Anglo-Australian company Brambles broke up the dominance of the miners as its shares rose 10.5p to 430p.

The gain of 3% came after it sold its Cleanaway UK business to Veolia for £595m (€859m), which was more than expected at the time it announced plans to sell the waste management business in November.

And oil stocks were also pushing forward after the price of crude moved above $73 a barrel. BP put on 5p to 632p and Royal Dutch Shell was 16p higher at 1902p, but they were both outrun by Cairn Energy which gained 66p to 2221p.

Among other stocks on the move, inter-dealer broker ICAP made a disappointing start to life as a blue-chip stock.

The group has been promoted to the Footsie in place of BAA following its sale to Spanish firm Ferrovial, but ICAP shares shares fell 5.25p to 503.5p on its first day.

Elsewhere, shares in housebuilder Berkeley Group were ahead 8p at 1205p, helped by its positive comments on the UK housing market.

Announcing a 6% rise in annual profits to £165m (€238m), Berkeley said there was still a “feel-good factor” at work in the market.

And Shanks Group gained 9.5p to 172.5p or 6% after it acquired Dutch waste company Smink Beheer for $86m and said the deal should be profitable within the current year.

But Eidos owner SCi Entertainment slipped 5p to 513p after it announced plans to split the roles of chairman and chief executive.

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