20th December 2013
The confirmation from the US central bank that it would finally begin tapering its quantitative easing programme in January has failed to put a drag on the so-called ‘Santa Rally’.
When the news emerged midweek that the Federal Reserve would reduce its monthly cash injection of $85bn to $75bn, the S&P 500 rose robustly on the news as did the UK market.
The FTSE 100 closed on Friday at 6,606.58, 21.88 points up on the day and 2.5% better over the week – marking the first time it has surpassed the 6,600 mark this month.
Leading the way was cruise operator Carnival, jumping more than 10% over the week to close at 2,389p, as the City welcomed better than expected fourth quarter sales.
Also enjoying a week of strong gains was Aggreko, up just shy of 10% at 1,665p, after the temporary power supplier won contracts to supply power at next year’s World Cup in Brazil and Commonwealth Games in Glasgow. Forestry and paper group Mondi increased 9% to 987p over the trading week after analysts at Bank of America Merrill Lynch upgraded its recommendation on the stock to ‘buy’.
Other high risers included Associated British Foods up 8% at 2,425p and plumbing giant Wolseley, 7% higher at 3,343p.
In regards to the UK listed banks, Royal Bank of Scotland was the top mover, up 4% to 327.1p, while Barclays gained 3% to close at 259.7p as did Lloyds Banking Group, which finished the week at 77.31p. Standard Chartered firmed 2% to 1,319p while its Asian market competitor HSBC rose 1% to 652p.
BAE Systems put a drag on progress, falling 3% to 422.1p following the news that its deal to supply Typhoon jets to the United Arab Emirates fell through.
Miner Randgold Resources also slipped down the blue-chip index, closing 5% lighter at 3,765p, making it the steepest faller of the week. Elsewhere Christmas cheer did not spread to the retailers this week as Sainsbury’s shares lost 5% to 370.1p while Marks & Spencer shed 3% to 445p.