Capitalists awaiting negotiations with Greece while FTSE looking forward to BOE’s next move.
LONDON- Investors expected tidings from Greece as European stocks went up slightly. However the FTSE 100 index unwaveringly anticipated for the Bank of England’s decision to step-up its asset purchase program for another GBP50 billion.
At 1215 GMT, the FTSE 100 index climbed up a notch to 5886.68, a 0.2% increase only to be pulled back after the Bank of England stated its intention to retain its main rate as well as maximizing its bond buying facility to GBP325 billion.
The bank’s initiative was obviously expected by many which would justify a dull response from the country’s main blue chip stock index. Currently exchanging blows at 7 months high, the FTSE was able to overcome the key 6000-level on July 8, 2011 while the British currency depreciated and then fought back against the U.S. dollar as gilt values continued to be unstable.
“The Monetary Policy Committee’s decision to increase its asset purchase program by another GBP50 billion was as expected and confirmed that the recent improvement in the economic data has not alleviated the need for policymakers to give further support to the economy,” said Vicky Redwood, chief U.K. economist at Capital Economics.
Earlier, the FTSE 100 was able to gain slight ground thanks to a kick from the U.K. industrial production data as of the month of December. There was a 1.0% rise in manufacturing yield during December in contrast to the previous month. The data actually exceeded expectations of economists interviewed by Dow Jones Newswires who forecasted a 0.2% monthly increase.
Any updates from talks with Greek politicians are highly anticipated by capitalists regarding its austerity measures on reaching a final verdict to availing the country’s second rescue package. And it seemed that the focus of negotiations was on pension amendments but as pointed out by Greek Prime Minister Lucas Papademos, he is intending to resolve the loan talks before the commencement of the Eurogroup meeting on Thursday in Brussels.
Following the events happening in Europe, U.S. stocks are assumed to move either direction especially with regards to any settlement with Greece.