News that Eurozone rates were to drop to 1.25% spurred the Dax and CAC 40 to gains of over 2.5%. The FTSE 100 saw more moderate gains, rising 1.12% to 5,546.
The ECB’s move helped counter gloomy news from the US earlier in the day. The Federal Reserve cut its growth forecast for 2012 by 0.8% to 2.7%. It said that unemployment was likely to remain over 8.5% until the end of the year, but inflation would be under 2% from 2012-2014.
Man Group was one group leading the FTSE 100 higher, after results for the six months to 30 September beat expectations. Man has had a tough year, but said that redemptions from its funds had reduced in October and it had ended the month with $63.6bn under management.
Tate & Lyle also had a strong day’s trading after it reported stronger interim revenue figures. Sales rose 19% for the six months to 30 September on the back of its strength in international markets, such as Mexico. BT was another of the day’s top performers in spite of recording 2% dip in revenue in the quarter to 30 September. Its relative strength dragged up the rest of the telecommunications sector, with Cable & Wireless and Spirent also showing good gains.
Unilever was one of the day’s few fallers in spite of third quarter sales growth ahead of the market at 7.8%, driven by price rises of 5.8% and volume growth of 1.9%. The shares have had a strong run since mid-September and embedded expectations were high.
Insurance stocks sold off in early trading after Aviva reported lower sales. They had recovered by mid-morning, but were still among the day’s weaker performers. The group saw life insurance sales fall 8% in the third quarter and the resulting share price weakness hit Old Mutual and Admiral as well.