Newspaper article The Evening Standard (London, England)

After the Great Plunge, Time for a Careful Smile

Newspaper article The Evening Standard (London, England)

After the Great Plunge, Time for a Careful Smile

Article excerpt

Byline: MICKEY CLARK

STOCK market investors allowed themselves the luxury of a smile for thefirst time in more than a week after taking their lead from a massive 600-pointturnaround on Wall Street last night.

The Americans reckon they have come up with a rescue package for the monolinecompanies, insurers that guarantee bond issues and have been teetering on thebrink. New York's big banks have clubbed together and formed a lifeboatcontaining up to $15 billion, which should take some of the short-term pressureoff insurers such as MBIA and Ambac.

New York's resilience, which lifted the Dow almost 300 points, was just thetonic City investors needed and enabled them to shrug off news of a [pounds sterling]3.7billion fraud at French bank Societe Generale.

The FTSE 100 index soared 223.5 points to 5832.8, while the wider FTSE 250climbed 277.0 to 9770.7. But traders were still moved to add a health warning,pointing out that trading conditions will remain sensitive to any further badnews. Wall Street was set fair to extend its lead when trading resumes thisafternoon, according to indications from the futures market.

Financials were able to claw back some of their recent losses. They weretargeted heavily by the bears during this week's sell-off. HBOS rose 691/2p to7021/2p, Lloyds TSB 42p to 452p. Interdealer broker Icap led the way with arise of 701/2p to 6541/2p while fund manager Schroders jumped 103p to 1085p.

Fresh talk of a takeover boosted Prudential 52p to 678p. Only yesterday theshares were lifted by talk of a possible bid from Ping An Insurance, China'ssecond-biggest life assurer, which has just raised [pounds sterling]11 billion.

Mining shares enjoyed a good showing with Rio Tinto rallying 275p to 4465p inthe hope that BHP Billiton, up 96p at 1366p, may increase the terms of its bid.Antofagsata put on 52p at 6341/2p with Kazakhmys 61p better at 1110p.

But Xstrata could only muster a 13p rise to 3372p following reports that theBrazilian government may oppose a bid by iron ore producer Companhia Vale doRio Doce for the Anglo-Swiss miner. …

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