FTSE 100 rallies to close 8.05% higher

Wednesday, 29 October 2008 12:00

The FTSE 100 closed 8.05 per cent higher at 4,242.54 as hopes of further interest rate cuts boosted confidence.

The US Federal Reserve is expected to cut interest rates tonight by half a percentage point to one per cent, with cuts from the European Central Bank and the Bank of England also forecast next week.

Mining stocks were among the top risers but Standard Chartered (up 30 per cent) and HBOS (up 28.28 per cent) made the biggest gains today.

Most stocks on the index were buoyant but Friends Provident bucked the trend, falling 7.69 per cent, while Stagecoach was not far behind, down 6.47 per cent.

Anthony Grech, market strategist for IG Index, said: "Markets have been cheered by hopes of another round of rates cuts from many of the world's central banks, in the latest move at repelling the onset of a prolonged recession.

"The Fed's decision this evening could provide a half-point cut but a 0.75 basis-point cut isn't completely out of the question. The BoE and ECB are also expected to cut rates at their next gatherings."

Markets across Europe have also experienced rises, with the CAC 40 7.9 per cent higher and the DAX recovering to 0.3 per cent - despite the hedge fund losses from the Volkswagen fallout.

The FTSE 100 has experienced sharp highs and lows in October.

On Monday, the index fell to its lowest close in more than five years, while on October 13th, the FTSE 100 soared 8.3 per cent, its second-biggest percentage point gain since the index begun in 1984.

• Tags:
• news
,
• share prices