FTSE 100 Friday close: Fed minutes hit trader confidence and mining stocks

22nd November 2013

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The FTSE 100 stalled this week as the US Federal Reserve sent a clear signal that it soon intends to start reducing its massive quantitative easing policy writes Philip Scott.

The minutes from the Fed’s meeting in October reported that it expects better economic conditions going forward and as a result it could starting tapering its $85 bond-buying programme in the “coming months”.

Britain’s blue-chip index closed on Friday at 6,674.3, 7 points, or 0.11% down on the day and flat over the week.

A steep drop in the price of gold this week, on the back of the Fed’s update saw the precious metal slide to its lowest level since July, which in turn hit mining stocks. Over the week Fresnillo is off 11% at 840.5p, while Vedanta Resources fell 6% to 895p and Randgold Resources finished 5% lighter at 4,362p.

By market close on Friday bullion was trading at $1,246.86 per ounce.

The week’s steepest fall on the leader-board was endured by oil services group Petrofac, which plummeted by 17% to 1,191p as the commencing of two new projects for the firm have been delayed until 2015 at the earliest. As reported in the Telegraph, the group’s profits were forecast to grow by about 16% in 2014 but are now expected to be flat or at best have single-digit growth.

Discount carrier Easyjet enjoyed a better week, finishing as joint top riser, with its shares up 11% to 1,405p following its announcement that it had seen a 51% rise in annul pre-tax profits to £478m, which it said was boosted by its decision to start allocating seats to passengers.

Also ahead by 11% was Aberdeen Asset Management, which closed at 475.4p after it was confirmed that the group was to snap up the Lloyd’s Banking Group owned fund manager Scottish Widows Investment Partnership, up in a deal worth up to some £660m. Lloyds shares fell by 1% to 74.62p over the trading week.

Elsewhere in the banking sector, it was as week of flat finishes for HSBC and Royal Bank of Scotland who closed at 686.3p and 330.1p respectively. Barclays, which announced it was closing its PPI claims office in Glagow finished the week 3% better at 256.95p.

Stockbrokers are recommending investors hold onto their Johnson Matthey shares as the firm announced a solid market update this week, during which it witnessed its shares rise 8% to 3,268p. The chemicals company that specialises in platinum, which is in high demand across the automobile industry, reported a decent set of interim results, which exceeded management expectations and the  interim dividend was raised by 10% to 17p per share. Also enjoying a week of gains were Persimmon and ARM Holdings, each up 5% apiece at 1,221p and 991p.

Next week sees market updates arrive from United Utilities, Compass and Kingfisher.

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