FTSE rises amid hope of bank action

LSEFresh evidence of economic pain has failed to deter London stocks as investors eye initiatives from central banks to stimulate recovery.

The latest set of purchasing managers' index (PMI) figures made for depressing reading worldwide, with China revealing the slowest growth in manufacturing in eight months while eurozone figures for the same sector were at a 37-month low.
In the UK, where the FTSE 100 Index was 42.9 points higher at 5678.2, the PMI reading showed the country's worst manufacturing performance in more than three years, following on from declines in June and May.

Rather than causing markets to slump for a second straight session, investors took the figures as the latest prompt that central banks will take more measures to kickstart the global economy. With US employment data due later, there is a possibility that the Federal Reserve will increase its quantitative easing programme.

The Bank of England began its two-day policy meeting today but is not expected to alter its bond buying level or cut interest rates from their record low. However, there is a much greater chance that the European Central Bank will take action by resuming bond purchases after its latest meeting on Thursday.

Fashion retailer Next was the biggest riser in the top flight after it said strong online trading and new stores meant profits will now be between £575 million and £620 million for the year to January 31, better than previous forecasts. Shares responded with a rise of more than 6%, up 206p to 3425p.

It was joined at the top of the FTSE 100 Index by Standard Chartered, which has continued to buck the gloom in the beleaguered banking sector by posting more solid figures. Shares in the Asian-facing bank rose 65.5p to 1530p.

There was also an improvement of 2% for housebuilder Taylor Wimpey after it reported half-year profits of £78.2 million, up from £28.9 million a year ago. With current trading conditions stable, shares lifted 1.1p to 45.2p.

Elsewhere in the property market, shares in website Rightmove surged 8% after its revenues rose 23% to £57.9 million as it attracted greater spending from advertisers, boosted by price rises.

Underlying operating profits rose 28% to £42.6 million and with its interim dividend up by 29% the UK's seventh most visited website saw its shares lift by 118.5p to 1610.5p in the FTSE 250 Index.

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