By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K.'s FTSE 100 index turned higher in
the afternoon on Wednesday after fairly dovish comments from U.S.
Federal Reserve Chairman Ben Bernanke boosted global stock
markets.
The benchmark gained 0.2% to close at 6,571.93 after trading in
negative territory earlier in the day.
The index started moving higher after Bernanke in prepared
comments for his semiannual testimony before Congress said the
bank's proposed timetable for tapering its asset purchases is not
on a "preset" course.
He also repeated earlier guidance that the Fed anticipates it
will be appropriate to reduce the pace of its easing program later
this year and end it altogether around midyear 2014.
If the outlook for employment becomes less favorable and
financial conditions tighten, however, the current pace of
purchases could be maintained for longer, he said.
Banks cheered the comments, with Lloyds Banking Group PLC (LYG)
up 1.8% and HSBC Holdings PLC (HBC) rising 0.7%. Shares of Barclays
PLC added 0.5%, even as the bank was fined $435 million for
allegedly manipulating electricity prices in California and other
western markets between 2006 and 2008.
Earlier in the day, most U.K. stocks traded in negative
territory after the U.K.'s central bank said all nine members at
the July meeting agreed to keep its asset purchases at 375 billion
pounds ($566 billion), marking a shift from the previous meetings.
In June, three members, former Governor Mervyn King, Paul Fisher
and David Miles, had voted in favor of increasing the bank's easing
program by GBP25 billion to a total of GBP400 billion.
The pound (GBPUSD) jumped after the release, trading at $1.5182,
up from $1.5115 on Tuesday.
Also on the rise in London, mining firms posted some of the
biggest gains, after sector major BHP Billiton PLC (BHP) said
iron-ore production hit a record high in its past financial year.
Shares rose 2%.
Anglo American PLC picked up 2.5% and Rio Tinto PLC (RIO) gained
1.1%. Metals prices were lower.
On Tuesday, Rio Tinto also posted record output of iron ore,
which helped send the sector higher.
Among other notable movers on Wednesday, shares of Smiths Group
PLC gave up 1% after the engineering company warned operating
profit likely will fall below current expectations.
Shares of Unilever PLC (UL) lost 1.6% in London after Credit
Suisse cut the consumer-goods firm to underperform from
neutral.
On the data front in London, the Office for National Statistics
said the unemployment rate for March to May fell to 7.8%, down 0.2
percentage points from December to February. Additionally, data
showed jobless claims in June fell by the biggest amount in three
years.
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