U.S headline indices hit fresh highs

After the Federal Reserve refused temptations to taper monthly bond purchases, U.S headline indices hit fresh highs with the S&P 500 now trading over 22 percent higher year-to-date. The FOMC also reiterated their stance on forward guidance with the Committee continuing to expect almost zero interest rates as long as the unemployment rate remains above 6.5% and medium-term inflation remains below 2.5%. The Fed slightly reduced the projections for GDP growth from 2.3%-2.6% to 2.0%-2.3% for 2013 and from 3.0%-3.5% to 2.9%-3.1% for 2014.


The Fed have made clear that the main factor preventing tapering is growth, or rather a lack of faith in the current recovery. Investors responded by propelling U.S. stocks to record highs and driving down bond yields. Furthermore, Fed Chairman Ben Bernanke refused to commit to begin reducing the bond purchases this year, and instead went out of his way to stress the program was "not on a pre-set course." In June he had said the Fed expected to cut back before year end.

Policy makers cited strains in the economy from tight fiscal policy and higher mortgage rates, as it explained why it decided to maintain asset purchases at the current pace of $85 billion a month. Nevertheless, the Fed said the economy was still making progress despite tax hikes and budget cuts in Washington as a result of the so-called "sequester" implemented by Congress earlier this year.

Gold added 0.3 percent $1,368 an ounce, after yesterday’s 4.1 percent gain, the biggest jump since June 2012. Gold rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system by purchasing debt. However, the commodity is still down some 18 percent from January.

Risers:

RandGold Resources
With the Federal Reserve refusing to taper their bond buying programme last night, this sent the price of Gold jumping which has helped shares in gold miners this morning. RandGold was top riser in the FTSE 100 with shares trading 10 percent higher on the open. They have since trimmed gains.

Glencore Xstrata
BNP Paribas upgrades Glencore Xstrata today to outperform from neutral and raises its price target to 410p from 345p. "With aggressive restructuring under way, Glencore Xstrata's return profile is poised to make one of the fastest improvements among diversified miners in Europe," says Exane. Says with an estimated 51% drop in its capex spend between 2013 and 2015, the group should see its free cash flow improve to 9.6% by 2015.

African Barrick Gold
Similar to RandGold Resources, ABG trades over 10 percent higher helped by an increase in the price of bullion. They have also appointed Andrew Wray as Chief Financial Officer, replacing Acting CFO Jaco Maritz.

Northgate PLC,
The light commercial vehicle rental business have announced they continue to trade in line with expectations, with vehicles on hire showing signs of stabilization. They announced that vehicle hires have risen for its UK and Spain business during May and September and continues its growth strategy.

Kirkland Lake Gold
Shares in Kirkland Lake Gold react to trade higher after they expanded its South Mine Complex in Ontario. The company said the latest results from its on-going underground diamond drilling exploration programme confirmed expansion at SMC and in particular the New South Zone on the HM claim and the North Amalgamated-Kirkland (North AK) claim.

Fallers:

Tesco
Nomura cuts Tesco to neutral from buy whilst cutting its price from 430p to 400p.

G4S
The global security and outsourcing group, said Thursday it has been awarded a two year extension to its contract to provide aviation security at Baghdad International Airport, worth $22.5 million per annum. Shares in G4S trade a tad lower, one of the few FTSE 100 companies trading down on the day.

Landore Resources
Exploration company Landore Resources Limited have posted a significantly narrowed pre-tax loss for the first half of the year and said that it will continue to raise further equity as needed to carry out its exploration and development activities.

New World Oil and Gas
New World Oil and Gas has reported a significantly widened pre-tax loss, primarily due to a large charge relating to dry wells, and said that it is currently conducting talks with possible farm-in or joint venture partners for both Belize and Denmark.
Rare Earth Minerals, down 7%
The rare earth minerals and metals investment company have announced the appointment of Kiran Mozaria as Chief Executive Officer and Donald Strang as Finance Director of the Company. They also announced the departure of Richard Griffiths who will step down as non-executive director.