European Indexes End Higher
The FTSE 100 ended solidly higher Tuesday, along with other European markets, as banking stocks rebounded and Wall Street traded higher on the back of Lehman Brothers' results. Moreover, US producer prices fell by more than expected, although the core rate edged up. The FOMC is due to set US interest rates after European markets close, with estimates of a cut of up to 50bp. On the UK economic front, inflation rose by a lower-than-expected 1.8% in the year to August, fanning hopes that the BoE may have room to cut rates. On the trading floor, NORTHERN ROCK (+8.22%), gained after the UK govt moved to guarantee all deposits, while ALLIANCE & LEICESTER (+32.17%) and HBOS (+3.14%) also climbed. Strong commodity prices helped lift miners, while a telecom sector downgrade from Morgan Stanley to in-line from attractive, put pressure on BT (-0.39%) and on VODAFONE (-0.06%). Additional support came from oil majors, as crude prices hovered just below the record US$81 level. LONMIN (-3.62%) dropped after an estimate downgrade from Credit Suisse, while RESOLUTION (+3.07%) climbed after reporting in-line first half. DEBENHAMS (-3.79%) weakened after a 5% fall in fiscal like-for-like sales and expectations of a 0.9% drop in gross margin. Elsewhere, buy-to-let lender PARAGON (-4.99%) said underlying profitability for September remained on track. VENTURE PRODUCTION (-1.01%) cut its fiscal production guidance by 4%.
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