London open: FTSE 100 up one per cent, miners surge after Bernanke comments

11th Jul 2013 08:36

Dovish comments from Federal Reserve Chairman Ben Bernanke prompted some strong gains on the FTSE 100 on Thursday morning, as mining stocks tracked metals prices higher on the back of a weaker US dollar."Bernanke and his colleagues are trying to reassure the market by communicating that even once tapering of stimulus starts, the Fed's monetary policy will remain accommodative with record low rates, despite the stretched balance sheet," said Market Strategist Ishaq Siddiqi from ETX Capital."It looks like that's worked, at least for now, with risk assets posting strong gains across the board."Minutes of the June Federal Open Market Committee (FOMC) meeting released after the UK close last night didn't reveal much new, with comments from policymakers in line with previous remarks by Bernanke. The statement reiterated that downside risks to the economy had diminished and activity was picking up, but "many" members wanted to see further progress in the labour market before beginning to 'taper'.However, given that the meeting took place before the release of the release of last month's jobs stellar report, many analysts still expect a scaling back of quantitative easing (QE) by as early as September.A Q&A session with Bernanke after the markets closed saw Wall Street benchmarks gain in after-hours trading as he said that the Fed would not think about raising short-term interest rates even if the unemployment rate falls dramatically. "It may be well sometime after we hit 6.5% before rates reach any significant level," he said."The decision by Bernanke to focus more on interest rates last night sent a clear message that days of large scale asset purchases are numbered. The Fed appears more focused on damage limitation for the markets than trying to prolong the purchases for a few more months to avoid spooking investors," said Market Analyst Craig Erlam from Alpari.FTSE 100: Miners surge as metals prices jumpJumping metals prices across the board on the back of Bernanke's dovish comments sparked some big moves in the mining sector early on. Fresnillo, Randgold, Anglo American, Rio Tinto, Antofagasta, BHP Billiton, Vedanta and Glencore Xstrata were among the best performers this morning on the FTSE 100.Associated British Foods was also putting in a decent performance after total group sales rose 8.0% in the third quarter, as a strong performance from Primark offset weakness in the sugar division.Consumer products firm Unilever advanced after saying that it has increased its stake in Hindustan Unilever from 52.48% to 67.26%, spending nearly €2.5bn.easyJet was flying lower ahead of a shareholder vote today on an order for 135 Airbus planes valued at $13bn, a transaction that has drawn fierce criticism from founder and major shareholder Stelios Haji-Ioannou.FTSE 250: Balfour Beatty jumps after first-half updateBalfour Beatty gained early as it said it is pinning its hopes on a revival in the second half after its businesses in the UK and Australia struggled in the first half. "We expect our profits to be significantly more skewed to the second half than in previous years, with the full-year result remaining in line with management's expectations," the company said.Fund manager Ashmore was also higher despite reporting that assets under management during the final quarter were unchanged from the same time a year earlier as market conditions turned more challenging towards the end of the period.Heading the other way was price comparison site Moneysupermarket.com which revealed slower trading in the second quarter due to ever-changing Google algorithms.Second-tier miners were performing in line with their FTSE 100 counterparts, with African Barrick Gold, Polymetal, Hochschild Mining and Lonmin rising strongly.FTSE 100 - RisersFresnillo (FRES) 994.50p +10.07%Randgold Resources Ltd. (RRS) 4,369.00p +6.43%Associated British Foods (ABF) 1,925.00p +6.06%Vedanta Resources (VED) 1,119.00p +5.37%Rio Tinto (RIO) 2,849.50p +5.17%Anglo American (AAL) 1,326.00p +4.57%Glencore Xstrata (GLEN) 268.45p +4.19%Antofagasta (ANTO) 848.00p +4.11%BHP Billiton (BLT) 1,788.00p +3.86%Eurasian Natural Resources Corp. (ENRC) 213.80p +2.74%FTSE 100 - FallersInternational Consolidated Airlines Group SA (CDI) (IAG) 264.10p -2.11%Meggitt (MGGT) 557.00p -0.89%easyJet (EZJ) 1,330.00p -0.45%Reckitt Benckiser Group (RB.) 4,928.00p -0.44%Reed Elsevier (REL) 794.50p -0.38%William Hill (WMH) 464.90p -0.21%Morrison (Wm) Supermarkets (MRW) 281.70p -0.11%Next (NXT) 4,765.00p -0.08%BAE Systems (BA.) 419.90p -0.07%Admiral Group (ADM) 1,349.00p -0.07%FTSE 250 - RisersAfrican Barrick Gold (ABG) 106.00p +7.78%Polymetal International (POLY) 514.50p +7.39%Ashmore Group (ASHM) 375.60p +6.83%Hochschild Mining (HOC) 156.90p +5.30%Lonmin (LMI) 289.20p +4.97%Balfour Beatty (BBY) 229.90p +4.74%Carpetright (CPR) 665.00p +4.31%Supergroup (SGP) 843.50p +4.26%Kazakhmys (KAZ) 260.70p +4.07%Ferrexpo (FXPO) 155.90p +4.07%FTSE 250 - FallersMoneysupermarket.com Group (MONY) 199.60p -1.96%Rank Group (RNK) 161.00p -1.83%Tullett Prebon (TLPR) 343.90p -1.06%Jupiter Fund Management (JUP) 327.00p -1.00%Savills (SVS) 607.00p -0.98%Direct Line Insurance Group (DLG) 223.30p -0.89%F&C Asset Management (FCAM) 97.65p -0.76%ICAP (IAP) 382.00p -0.75%Millennium & Copthorne Hotels (MLC) 553.50p -0.72%Afren (AFR) 135.70p -0.66%BC