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FTSE plays catch-up with Europe

Tuesday, August 26 09:23:42

Britain's top shares rose on Tuesday, boosted by comments from European Central Bank President Mario Draghi which raised expectations of further policy easing, while WPP and Bunzl advanced after posting first-half results.

Draghi, speaking at a global central banking conference in Jackson Hole, Wyoming, said late on Friday the bank was prepared to respond with all its "available" tools should inflation drop further.

The prospect of more policy easing in Europe - and even the possibility of quantitative easing to pump cash into the financial system and revive inflation - saw the London stock market, closed on Monday for a public holiday, play catch up with an advance seen in Europe in the previous session.

The FTSE 100 was 25.21 points, or 0.4 percent, higher at 6,800.46 points by 0806 GMT. The euro zone's blue-chip Euro STOXX 50 index closed up by 2.2 percent on Monday.

"The FTSE is supported this morning by Draghi's Jackson Hole speech - although low on detail. European central bank support will be a positive for the UK market as well," said Lex van Dam, a hedge fund manager at Hampstead Capital.

The likelihood of more gains for the UK benchmark was borne out by upbeat technical comment on the index - up some 4 percent from a low hit more than two weeks ago following a sell-off triggered in June by the worries over the crisis in Ukraine.

WPP, the world's largest advertising group, was among the biggest risers, up 1.6 percent, after unveiling first-half results slightly ahead of forecasts and confirming its full-year guidance.

Business supplies distributor Bunzl was up 1.7 percent after its first-half revenue climbed 7 percent at constant exchange rates, helped by the impact of recent acquisitions.

Shares in RSA Insurance rose 2.5 percent, with traders citing the impact of a BofA Merrill Lynch upgrade to "buy" from "neutral". (Reuters)

For more visit: www.businessworld.ie