Global equity markets staged a modest rally during the week, as new austerity measures announced by Greece boosted hopes that the European Union would eventually come to its rescue, and positive US data added to the evidence that the global economic recovery is on the right track. The Cambridge Index surged 7.5% or 470.6 points to 6,772.8.
Cambridge Index rises 7.5%
The index smartly outperformed the broader US and UK markets, as all of the top ten index heavyweight stocks ended in the black. Index heavyweights Johnson Matthey, Greene King and CSR, all up between 0.9% and 5.4%, featured among the gainers. ARM Holdings soared 14.3%, after Goldman Sachs lifted the price target on the stock.
Autonomy, up 9.7%, announced significant innovations across its “Meaning Based Marketing platform”.
Pursuit Dynamics jumped 28.5%, emerging as the top gainer in the Cambridge Index. DS Smith gained 8.2%, after the company announced that trading in the third quarter of financial year 2009-10 has been ahead of management’s recent expectations.
Dialight closed 4.0% higher, as the company’s full-year results prompted Canaccord Adams, its broker, to hike its forecast for pre-tax 2010 profits to £8.9 million from £8.4 million, and increase its target price to 310p from 276p. In its preliminary results for the year ended 31 December 2009, the company reported a drop in full-year revenues to £77.3 million from £77.9 million, and in profit before tax to £5.3 million from £5.6 million recorded in the previous year.
LPA Group edged up 3.3%, after the company announced that orders taken during the first five months of the current financial year have exceeded the budget by £1.5 million, increasing the order book by £1.1 million to £17.9 million as at February 2010.
Artisan (United Kingdom) plunged 13.1% to 26.5p, becoming the top loser in the Cambridge Index. Xaar slid 6.0%, ahead of its preliminary results scheduled to be released on 17 March 2010. Other prominent losers were Sepura, Phytopharm and Falkland Islands Holdings, all down between 4.7% and 6.6%.
The UK benchmark FTSE 100 Index advanced 4.6% over the week to close at 5,599.8, an 18-month peak, as investors speculated that the worldwide operations of UK blue-chips would shield them from the recent slump in pound sterling caused by political and fiscal uncertainty.
Miners made gains on the back of higher base metal prices. Energy stocks also edged up, as oil prices topped $81 per barrel. Banking stocks were in demand, after Standard Chartered reported full-year results in line with market expectations. The FTSE techMARK 100 Index rose 4.6% to 1,856.5, while the FTSE AIM 100 Index climbed 4.2% to 3,158.6.
Markets in the US moved upwards during the week, as a bout of merger & acquisition activity and improving outlook in the consumer sector boosted sentiment. A slew of M&A deals in sectors such as financials, pharmaceuticals and coal spurred investors to increase their exposure to risky assets, while a smaller-than-expected drop of 36,000 in US nonfarm payrolls in February raised expectations that the job market was beginning to thaw.
Adding to the positive sentiment in the consumer sector, personal spending rose 0.5% in January, exceeding market consensus, and borrowing by US consumers unexpectedly rose 2.4% in January for the first time in a year. Also, a spate of retailers posted upbeat February retail sales, increasing hopes of a recovery in consumer spending. The Dow Jones Index gained 2.3% to 10,566.2, while the Nasdaq Index rallied 3.9% to 2,326.4.
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