Falling precious metals prices hurt miners early in the session.
Traders in London would have been mistaken for thinking that with the avoidance of the dreaded “fiscal cliff” the flow of unsettling news from the US would begin to ease.
However, America was once again a source of concern for some investors early in the session, as minutes from the latest Federal Reserve meeting out after Thursday’s close sparked fears the central bank may stop asset purchases this year. That weighed on precious metal prices, with gold in particular having been a beneficiary of the central bank’s policy in the past, because of its status as a hedge against inflation.
Gold miner Randgold Resources fell 255p to £59.75, the biggest drop on the blue-chip index, and Polymetal declined 45p to £11.74 as a result. Silver producer Fresnillo (Other OTC: FNLPF - news) lost 75p to £18.10, with a downgrade to “neutral” from “buy” on valuation grounds at UBS (Berlin: UBRA.BE - news) also dragging on the shares.
The main board closed up 42.50 points at 6,089.84, the highest level since February 2011 and capping off a week that has seen the FTSE 100 rise 2.8pc, putting it close to a four and a half year high. The blue-chips jumped 2.2pc on Wednesday, boosted by a compromise deal on the package of US spending cuts and tax rises that had been due to kick in at the start of the year. The FTSE 250 today advanced 43.65 to 12,694.90, a new record high.
Deutsche Bank (Xetra: 514000 - news) reckoned those investors looking for ways to outperform the wider market this year could keep an eye on share dealings of company directors. Strategists at the German bank analysed buying and selling in 600 European companies across 17 countries, concluding that “directors’ timing proved smart throughout the past 18 months”. Although bosses are currently net sellers, they said investors would benefit if they copied share purchases in particular. Deutsche strategists also highlighted how director dealings could move the market, noting that easyJet shares climbed 5.75pc in the week after director Adele Anderson bought shares in December.
Back with the blue-chips, BP , up 11.8 at 453½p, topped the FTSE 100 in the wake of Transocean’s $1.4bn (£870m) deal with US authorities over its role in Gulf of Mexico oil spill. Investors were hopeful the settlement may signal BP (LSE: BP.L - news) could reach its own civil agreement before a trial due to start in February.
With traders looking ahead to next week’s spate of Christmas updates from the retailers, Marks & Spencer (Other OTC: MAKSY - news) was hurt by bearish comments from Nomura. Analyst Fraser Ramzan lowered his forecast for full-year pre-tax profit, arguing weaker general merchandise sales would drag on the group’s numbers. M&S shares slid 12 to 376.4p.