LONDON (ShareCast) – – FTSE reverses early declines to finish up 60 points
– Banks lifted by UK inflation data
– Anglo American (LSE: AAL.L – news) lifted by UBS (Xetra: UB0BL6 – news) note

techMARK 2,881.97 +0.86%
FTSE 100 6,796.43 +0.90%
FTSE 250 16,342.07 +0.60%

Stocks reversed this morning’s slight decline to end the session firmly higher, buoyed by a strong performance from the banking sector after January UK inflation came in in below the government’s target level.

The FTSE 100 closed up 60.43 points, or 0.9%, at 6,796.43.

Both Royal Bank of Scotland (LSE: RBS.L – news) and Barclays (LSE: BARC.L – news) registered strong gains after the key consumer price index measure came in at 1.9%, below the target of 2.0% set by the government.

Financial Trader Alex Conroy commented that the data “will have further strengthened the Bank of England’s case that interest rates should remain at current levels for the time being and has sent speculators into frenzy”.

According to Barclays Research, the fall came from services prices and more specifically recreational and personal services.

“Slightly weaker-than-expected outcomes in volatile prices (energy; food, alcohol and tobacco) were broadly offset by a moderately stronger-than-expected outturn in non-energy industrial good prices,” it explained.

It also said the fall was in line with its baseline scenario that inflation pressures should ease in the coming months, giving “comfort to our view that the current brisk gross domestic product (GDP) recovery pace should be non-inflationary (at least for the near future)”.

Average UK house price hits £250,000

In other UK macro news, the average price of a home in the UK reached £250,000 in 2013, said the Office for National Statistics (ONS). House prices increased by 5.5% December 2013 compared with a year earlier and up from 5.4% in November. The average price was reached at the end of the year, the ONS said.

Meanwhile, the ONS also revealed that factory gate prices increased by 0.3% over the month (0.9% year-on-year) during January. The consensus estimate had been for an unchanged reading on the month and 0.7% rise when compared to levels a year ago.

US home builder sentiment declines

Over in the US, home builder sentiment index dropped to a reading of 46 in the month of February, after a reading of 56 in the month before. The consensus estimate had been for a reading of 56.

Over in the Eurozone, the ZEW Institute’s economic sentiment indicator for Germany fell from January’s 61.7 to 55.7, a bigger drop than the consensus expectation of 0.2, while the ‘current situation’ sub-index, which is generally more closely related to GDP growth, again rose in February, from 41.2 to 50, its highest level since August 2011.

The European research firm also reported that overall Eurozone economic sentiment had fallen to 68.5 in February from the prior reading of 73.3. Consensus had expected an increase to 73.9.

Anglo American lifted by UBS note

Anglo American shares were lifted by a target price increase from UBS from 1,580p to 1,650p after its results came in ahead of expectations.

Meanwhile, InterContinental Hotels Group after its full year results showed a negative impact on earnings before interest and tax as a result of hotel/room closures during refurbishments, while 2014 capex guidance was more than 20% ahead of its current forecast. Significantly, there was a potential delay to further cash returns. Numis cut the stock to ‘hold’ from ‘add’.

Rolls-Royce fell after Citi reduced its target price from 1,280p to 1,070p and downgraded the stock to ‘neutral’.

Numis cut Tate & Lyle (LSE: TATE.L – news) to ‘hold’ from ‘add’, and cut its target price from 858p to 693p.

FTSE 100 – Risers
BT Group (LSE: BT-A.L – news) (BT.A) 418.10p +3.41%
Royal Bank of Scotland Group (RBS) 360.20p +2.39%
Anglo American (AAL) 1,587.00p +2.26%
London Stock Exchange Group (LSE) 2,001.00p +2.25%
Travis Perkins (LSE: TPK.L – news) (TPK) 1,945.00p +2.21%
Petrofac Ltd. (PFC) 1,347.00p +2.20%
Associated British Foods (LSE: ABF.L – news) (ABF) 2,914.00p +2.17%
Barclays (Berlin: BCY.BE – news) (BARC) 261.30p +2.05%
Persimmon (PSN) 1,444.00p +2.05%
Imperial Tobacco Group (IMT) 2,404.00p +1.99%

FTSE 100 – Fallers
InterContinental Hotels Group (IHG) 1,981.00p -3.22%
Rolls-Royce Holdings (RR.) 976.50p -2.93%
Tate & Lyle (TATE) 644.00p -1.90%
Morrison (Wm) Supermarkets (MRW) 232.60p -1.61%
Randgold Resources Ltd. (RRS) 4,780.00p -1.59%
Centrica (Frankfurt: CENB.F – news) (CNA (SES: E2:5GC.SI – news) ) 314.40p -1.26%
Burberry Group (LSE: BRBY.L – news) (BRBY) 1,507.00p -0.99%
Legal & General Group (LGEN) 239.70p -0.91%
G4S (Copenhagen: G4S.CO – news) (GFS) 232.60p -0.81%
Sports Direct International (Other OTC: SDISY – news) (SPD) 716.00p -0.69%

FTSE 250 – Risers
Wood Group (Frankfurt: JWG1.F – news) (John) (WG.) 721.50p +6.65% Digital Entertainment (BPTY) 119.00p +5.31%
Paragon Group Of Companies (PAG) 386.20p +5.12%
Bank of Georgia Holdings (BGEO) 2,372.00p +4.59%
Fidessa Group (LSE: FDSA.L – news) (FDSA) 2,411.00p +4.37%
WH Smith (LSE: SMWH.L – news) (SMWH) 1,118.00p +4.00%
Workspace Group (LSE: WKP.L – news) (WKP) 583.50p +3.73%
Homeserve (HSV) 342.30p +3.73%
Domino’s Pizza Group (DOM) 542.50p +3.33%
Xaar (XAR) 1,090.00p +3.32%

FTSE 250 – Fallers
Kazakhmys (Frankfurt: A0HFWR – news) (KAZ) 229.00p -3.62%
African Barrick Gold (LSE: ABG.L – news) (ABG) 268.60p -2.86%
Telecom Plus (LSE: TEP.L – news) (TEP) 1,835.00p -2.34%
Cairn Energy (LSE: CNE.L – news) (CNE) 190.30p -2.21%
NMC Health (LSE: NMC.L – news) (NMC) 460.00p -2.15%
Centamin (DI (KSE: 003160.KS – news) ) (CEY) 51.50p -2.09%
Polymetal International (POLY) 671.00p -1.90%
Vedanta Resources (Other OTC: VDNRF – news) (VED) 919.00p -1.87%
Rotork (Frankfurt: RO4.F – news) (ROR) 2,542.00p -1.85%
Afren (Berlin: A2J.BE – news) (AFR) 148.60p -1.85%