London FTSE ends higher after Fed rate hint

The FTSE 100 index was up 0.51 percent at 6,534.16 points in early trade on Monday January 12, 2015
The FTSE 100 index was up 0.51 percent at 6,534.16 points in early trade on Monday January 12, 2015 (AFP Photo/Facundo Arrizabalaga)

London (AFP) - London's leading index ended higher on Thursday, cheered by hints the US Federal Reserve could raise interest rates sooner than expected in view of US growth, despite mixed eurozone data.

The benchmark FTSE 100 added 0.33 percent to close at 6,777.66 points.

Minutes from the July 29-30 Fed meeting showed policy makers increasingly at odds over how strong the US labour market is and what that means for inflation -- a key issue in planning rate rises next year.

The intensifying debate signalled an increased, albeit still measured, level of hawkish sentiment in the Fed that could speed up any rate rise, dealers said.

"We're certainly seeing more emphasis on the pace of the recovery at these meetings and the minutes from the last meeting showed discussions around how to raise rates when the time comes," said Alpari analyst Craig Erlam.

The news cheered markets, despite disappointing data from the eurozone and the world's second-biggest economy China.

In London, drugmaker Astrazeneca led the risers, climbing 2.95 percent to 4,411.5 pence, followed by asset manager Schroders, which added 2.66 percent to 2,392.

The day's worst performer was silver miner Fresnillo, slipping 3.55 percent at 938, followed by Randgold Resources which dipped 1.86 percent to 4,904 pence.

Investors meanwhile digested mixed surveys from private research group Markit for the latest reading on the eurozone economy.

Markit's purchasing managers' index (PMI) measure of output in the eurozone's manufacturing and services sectors registered a figure of 52.8 in August.

That indicated expansion in the region, but was lower than a revised figure of 53.8 for July.

"August's fall... was the fourth in six months, adding to signs that the region's feeble recovery is already over," said Capital Economics analyst Jennifer KcKeown.

On the currency markets, the pound was trading at 1.6590 at around 5.30pm, down from $1.6632 around the same time Wednesday. It also fell to 1.2490 euros, down from 1.2522 euros over the same period.