London midday: Footsie up 2% as BoE injects more money

The Footsie has held onto gains following the Bank of England's surprise move to increase its asset purchase programme by a bigger-than-expected £75bn.In an announcement at midday, the central bank revealed that it has maintained its key Bank Rate at the historically low level of 0.5%, but raised its quantitative easing programme to £275bn, despite many expecting it to announce a lesser £50bn hike. "While the stimulatory monetary stance and the present level of sterling should help to support demand, the weaker outlook for, and the increased downside risks to, output growth mean that the margin of slack in the economy is likely to be greater and more persistent than previously expected," the BoE warned."The deterioration in the outlook has made it more likely that inflation will undershoot the 2% target in the medium term. In the light of that shift in the balance of risks, and in order to keep inflation on track to meet the target over the medium term, the Committee judged that it was necessary to inject further monetary stimulus into the economy."Markets now await the policy rate decision by the European Central Bank (ECB), due to be announced at 12:45. UniCredit does not think it will cut its key lending rate, but concedes "this is becoming an increasingly close call." UniCredit instead thinks the ECB will step up up "non-standard measures to restore the smooth functioning of the monetary policy transmission mechanism." The market extended Wednesday's gains on hopes that the European Union is planning for a co-ordinated recapitalisation of the continent's banks. German chancellor Angela Merkel spoke out last night, saying, "I think it is important, if there is a general view that the banks are not sufficiently capitalised for the current market situation, that one does it....Germany is prepared to move to recapitalise. We need criteria. We are under pressure of time and we need to take a decision quickly," she said. Copper and silver prices were surging 4.4% and 3.7% ahead, respectively, at midday, while gold rose 0.8%, boosting demand for the miners. Eurasian Natural Resources Corp, Antofagasta, Kazakhmys, Rio Tinto, Vedanta Resources and Fresnillo were making gains of at least 5%.Xstrata wasn't far behind after it said it has secured long-term energy supplies for its North-west Queensland operations in Australia after a two-year selection process. Banking giant HSBC made gains on reports that it has approached the top three property-and-casualty insurers in Japan about the sale of its non-life insurance business, which could fetch more than $1bn.Engineering firm IMI was a notable performer, jumping nearly 8% after it confirmed that current trading has been in line with expectations. WPP, the FTSE 100 advertising and marketing group, rose after agreeing to purchase a large stake in South African consultancy Arcay Communications for an undisclosed sum. Mothercare rose strongly on the FTSE 250, attempting to recover from its +30% loss the day before after it revealed a 9.6% like-for-like decline in UK sales in the last quarter. Ukraine-focused iron ore producer Ferrexpo soared after saying that pellet production in August was the second highest in the company's history at 0.9m tonnes. Bakery chain Greggs served up a 0.8% increase in third quarter like-for-like sales and remains confident in its full year prospects despite the persistently tough retail environment. A big mover was AIM-listed consulting and business services group Mouchel after the firm revealed that after an accounting error and higher provisions for contract risks, profits would be well under expectations. Not helping matters either was the resignation of the chief executive. Shares plummeted by over a third.ACM Shipping, the ship broking firm, also sank after issuing a profit warning for the year ending March 2012 following the departures of key personnel in its sales and purchasing team.BCFTSE 100 - RisersEurasian Natural Resources Corp. (ENRC) 607.50p +8.97%Antofagasta (ANTO) 1,029.00p +8.83%Kazakhmys (KAZ) 835.00p +6.71%IMI (IMI) 726.00p +6.61%Prudential (PRU) 562.00p +6.44%Standard Chartered (STAN) 1,293.00p +6.20%Fresnillo (FRES) 1,626.00p +5.52%Vedanta Resources (VED) 1,085.00p +5.44%Rio Tinto (RIO) 3,060.00p +5.32%SABMiller (SAB) 2,209.00p +5.19%FTSE 100 - FallersAdmiral Group (ADM) 1,252.00p -0.87%BP (BP.) 387.15p -0.81%Capita Group (CPI) 697.00p -0.50%Next (NXT) 2,440.00p -0.29%Pearson (PSON) 1,147.00p -0.26%International Consolidated Airlines Group SA (IAG) 155.90p -0.06%Autonomy Corporation (AU.) 2,549.00p -0.04%