Wilmington Share News (WIL)

LONDON (Alliance News) - The FTSE 100 ended at a record closing high Tuesday, while the Dow Jones Industrial Average and S&P 500 have also hit new intraday records, as sentiment towards equities was lifted by an agreement to extend Greece's bailout and as Federal Reserve Chair Janet Yellen painted a fairly rosy picture on the health of the US economy but said policy makers would still be patient before raising interest rates.

The FTSE 100 closed up 0.5% at 6,949.63, its highest ever closing level, having hit a record intraday high of 6,958.89 late in the session, surpassing a peak previously set during the dot-com boom of 1999. The FTSE 250 closed higher for ninth consecutive session, rising 0.2% to 17,201.91, while the AIM All-Share index underperformed, ending down 0.2% at 711.64.

Market were given a lift after Eurozone finance ministers gave a green light to extend the European share of Greece's bailout by four months, although they demanded that Athens must still meet reform targets in the coming months to keep receiving funds from its creditors. The International Monetary Fund, another of its creditors, expressed doubt about the reforms pledged by Athens in return for continued loans.

According to news agencies, the Greek government has promised to not to roll-back any ongoing or completed privatizations. The proposals, submitted by Finance Minister Yanis Varoufakis, also contain assurances to reform tax policy and enforcement, promises to fight corruption and smuggling and to review and control government spending. The government will also undertake measures to unify and streamline pension policies.

"Glad Greece gets green light for its reform proposals. They strike good balance. Now government has to deliver and implement reform commitments," EU Parliament President Martin Schulz wrote on Twitter.

"The shorter version is this – we can stop worrying about Greece for now. With this worry removed it looks like stock markets are free to power ahead, especially as the start of ECB QE looms," said IG Markets senior market analyst Chris Beauchamp, referring to the start of the Eurozone central bank's sovereign bond purchases.

The markets got a bigger lift when Yellen started to testify in front of US lawmakers. Yellen painted a relatively rosy picture of the employment situation, noting fewer workers are reporting that they can find only part-time work when they would prefer full-time employment. However, she reiterated to the Senate Banking Committee that policy makers will be "patient" before raising rates.

"The FOMC's assessment that it can be patient in beginning to normalize policy means that the Committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings," Yellen said in prepared remarks.

Yellen indicated the Fed is keeping a keen eye on Europe, where the recovery has been far less robust. "Foreign economic developments...could pose risks to the outlook for US economic growth," she said.

The US indices were trading higher when the London markets closed, with the DJIA up 0.5%, the S&P 500 up 0.3%, and the Nasdaq Composite up 0.1%.

European indices also closed higher, with the CAC 40 in Paris up 0.5% and the DAX 30 in Frankfurt up 0.7%.

In London, BHP Billiton was the best performing stock in the FTSE 100, closing up 4.2%, after its first-half results beat market hopes despite dropping sharply.

The world's largest miner joined peers in the resources sector by responding to steep iron ore and oil price falls by slashing its capital and exploration spending plans. The Australia-based mining giant reported net profit of USD4.27 billion or USD0.80 per share for the six months to end-December, down 47% from USD8.11 billion or USD1.52 a share in the same period in the previous year. Revenue declined 11.9% to USD29.90 billion, from USD33.95 billion.

Still investors were also cheered by a 5% increase in the interim dividend.

"Despite significant falls in the prices of our main commodities over the last six months, group margins remain healthy, free cash flow has increased and we have strengthened our balance sheet," said Chief executive Andrew Mackenzie. "We are confident that we can maintain our progressive dividend policy and continue to selectively invest in projects that offer compelling returns".

Mondi was also among the best-performing blue-chip stocks, closing up 2.6%. The South Africa-based paper and packaging company reported higher profits for 2014, driven largely by cost-cutting and other measures aimed at boosting margins, and said it is confident of "making further progress" in 2015 thanks to the investments it has been making in the business.

Meggit was the worst performer in the FTSE 100, closing down 6.0%. The engineer of components for the aerospace, defence and energy markets reported lower profits for 2014, hit by a range of factors including adverse exchange rates, disposals, research and development spending and higher sales of less-profitable products.

The company also said it had returned to organic revenue growth in the second half of the year and its order book has increased, and also raised its final dividend, a move it said reflects its continuing confidence in its prospects. Markets proved less confident.

In the FTSE 250, Just Retirement Group was the best performing stock, closing up 16%. The specialist annuity products provider said it is well placed to compete and has new products to roll out when new rules governing savings and pensions come into force in April, even as it reported a fall in operating profit in the first six months of its financial year. Chief Executive Rodney Cook told reporters that the company, which is majority owned by private equity firm Permira, would participate in industry consolidation if it improves shareholder value.

In the corporate calendar Wednesday, Weir Group, St James's Place, Brit, Hays, Henderson Group, International Personal Finance, Molins, Petrofac, Vitec Group, Man Group, Segro and TSB Banking Group will release full year results. Wilmington Group and Barrat Developments will issue half year results, while Whitbread will publish a fourth quarter trading update. JP Morgan Indian Investment Trust will provide an Interim Management Statement.

In the economic calendar Wednesday, UK BBA mortgage approvals data is due at 0930 GMT. In the US, new home sales data is due is at 1500 GMT, while EIA crude oil stocks change is at 1530 GMT.

By Daniel Ruiz; danielruiz@alliancenews.com

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