LSE: FTSE 100 index rises after Draghi comments, US optimism

Britains FTSE 100 index gained after the Stoxx Europe 600 Index rose the most in three weeks as President Mario Draghi restated yesterday that the European Central Bank will act to safeguard the regions economy, if necessary. Optimism in the US recovery state, coupled with receding tension in Ukraine also supported global equities.

Britains headline index stood at 6 620.50 points at 8:49 GMT, up 0.24% on the day, having ranged between days high and low of 6 625.30 and 6 593.30, respectively. The index rose by 84.50 points on Tuesday, or 1.3%, rebounding from a six-week low closing, led by gains in EasyJet and Kingfisher. This was the strongest daily performance since March 4th.

The FTSE 100 index kept its gains from the previous session after President Mario Draghi reiterated yesterday that that the ECB will safeguard the regions economy and act, if necessary. He said that although risks remain at hand, the central banks accommodative monetary policy should become more effective within the Eurozone as the financial system stabilizes.

“We stand ready to take additional monetary policy measures that ensure our mandate is fulfilled,” Draghi said. “We will do what is needed to maintain price stability,” he added.

Equities also drew support following an unexpected rise in US consumer confidence to a six-year high in March amid improved optimism about the economy. The Conference Board’s Consumer Confidence index surged to 82.3 this month, sharply exceeding analysts’ expectations for a minor improvement to 78.6. February’s reading was revised up to 78.3 from initially estimated at 78.1.

Easing diplomatic tension between Russia and the West also fanned positive sentiment. US President Barack Obama and his allies agreed to abstain from imposing tougher economic sanctions against Russia, if Moscow limits its territorial appetite to Crimea.

Global equities were also buoyed by growing bets that the Chinese government will impose monetary stimulus in order to meet its annual growth target after recent downbeat readings fueled fears of a slowdown.

Gainers, losers

The FTSE 100 indexs top three gainers for the day are Standard Life Plc, Legal & General Group Plc and William Hill Plc.

Standard Life rose by 4.67%, or 17.45 pence, by 8:36 GMT to 391.25 pence after announcing it will acquire Ignis Asset Management from Phoenix Holdings for 390 million pounds ($643.71 million).

Legal & General Group rose by 3.10%, or 6.50 pence, to 216.00 pence after it announced it had won a 3-billion-pound bulk annuity contract with the ICI Pension Fund.

William Hill Plc traded at 350.40 pence at 8:40 GMT, up 3.27%, or 11.10 pence, on the day.

The FTSE 100s top three losers for the day are RSA Insurance Group PLC, Lloyds Banking Group Plc and Centrica Plc.

RSA Insurance Group fell by 9.53%, or 9.075 pence, to 86.125 pence by 8:43 GMT. Nomura lowered their target price on the insurers shares on Wednesday from 96 pence to 89 pence. RSA announced yesterday that it is planning to raise about 773 million pounds (1.28 billion dollars) in a rights offering. The company is said to be focused on increasing its capital cushion after an accounting scandal at its Irish division.

Lloyds Banking Group plunged 3.98%, or 3.145 pence, to 75.965 pence. U.K. Financial Investments Ltd., which manages the governments investment in Lloyds, said that Britain sold 4.2 billion pounds of shares in the lender in order to cut its stake to 25% as it prepares for a full exit next year.

Centrica lost 1.71%, or 5.70 pence, to trade at 326.80 pence at 8:48 GMT. The largest energy supplier and distributor for residential customers in the U.K. announced yesterday it has reached an agreement for the acquisition of Bord Gais Energy in a deal that is estimated to 1.1 billion euros (1.5 billion dollars).