European shares spread betting markets took an unexpectedly positive turn on Friday afternoon after Wall Street was boosted following a buoyant start to the holiday shopping season on 'Black Friday'.
By 4pm (London time) the FTSE 100 had erased its morning loses and was 1% higher at 5170.80. On Wall Street shares jumped almost 0.7% with the S&P 500 and Dow Jones up to 1170.13 and 11,336.53 respectively.
Bank of England: A case for more QE
In a speech by Bank of England (BoE) policymaker Martin Weale today, he announced that there was a strong case for more quantitative easing once the current round of purchases was complete, but it partly hinged on inflation starting to fall.
The BoE introduced the latest round of asset purchases in October, raising its asset purchase target to £275 billion from £200 billion, which is due to be completed by February.
Mr Weale also said that he hoped the latest round of asset purchases would add 0.5% to UK GDP and unless the economic situation improves, there is likely to be a strong case for extending the asset purchase programme after the current one comes to an end.
He further added that Britain's economic recovery was proving slower than expected, even taking into account the scale of the financial crisis.
Going once, twice, three times, sold
Italy paid a record 6.5% to borrow money over six months this morning, and its longer-term funding costs soared far above levels seen as sustainable for public finances, raising the pressure on Rome's new emergency government.
In its short-term debt auction, Italy managed to successfully attract buyers and raised €10 billion of six-month bills, but yields shot up to 6.504% compared to 3.535% at the end of October, reflecting market fears over the country's debt burden.
Meanwhile the Italian ten-year bond yield continued to trade above the unsustainable level of 7% this morning, while the German ten-year bond yield edged higher to 2.27%. Investors will now look to a bond sale of up to €8 billion that Italy is planning for next Tuesday.
The euro traded around a seven-week low this morning, though it inched down lower after Friday's auction. European stock markets remained in negative territory for the majority of the day, with the Milan stock exchange the worst performer.
Severn Trent first-half profit slips
British water company Severn Trent reported a slightly higher-than-expected drop in underlying pre-tax profit this morning. The company, which provides water and sewerage in the Midlands and mid-Wales, announced its underlying pre-tax profit fell 1.9% to £155 million, with revenue 2.1% higher at £886 million.
The fall in pre-tax profit reflected the increased investment in water networks and challenging conditions at its water treatment division.
The firm raised its interim dividend to 28.04p from 26.04p a year ago and remained committed to its dividend policy of 3% above retail price inflation. Shares in Severn Trent fell over 3% this afternoon to a low of 1475p.
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'Strong Start to US Shopping Season Lifts Shares Market Spreads', Article by IG Index, last update: 25-Nov-11
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