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FTSE 100 rises as stimulus hopes trump growth worries

FTSE 100 rises as stimulus hopes trump growth worries
FILE PHOTO: Traders looks at financial information on computer screens on the IG Index trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson -
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(Reuters) – London’s FTSE 100 share index rose on Thursday as investors bet central banks would take action this year to head off a global recession, although gains were capped by several heavyweight stocks trading ex-dividend.

By 0750 GMT, the FTSE 100 was up 0.6% and the mid-cap FTSE 250 had gained 0.3%, helped by double-digit gains for Peppa Pig-maker Entertainment One and Go-Ahead Group, which operates a quarter of London’s local buses and the Southeastern rail franchise, among others.

World stock markets, fearful of a slide into recession, have been in a state of flux this week, with worries over Washington’s escalating trade tensions with Beijing and Mexico giving way to hopes that major central banks would provide fresh stimulus in response.

Gloomy U.S. private-sector jobs data on Wednesday bolstered market bets on near-term cuts in Federal Reserve interest rates, and a European Central Bank meeting on Thursday was also expected to take steps to shore up ailing euro zone growth.

“We’re at a ‘bad news is good news’ point now for stocks as markets turn back to their old habit of requiring weaker data to push up expectations for stimulus,” analyst Neil Wilson said.

Oil majors and more internationally-exposed stocks boosted the blue-chip index and all but one of its sectors were in the black.

Insurer Aviva led the gainers, rising 1.8% after it said it would cut 1,800 jobs and restructure its UK business to save 300 million pounds in costs over three years.

Ex-dividend trading, where stocks have passed the day of the year when they no longer carry the right to the company’s next dividend, drove falls in supermarket chain Sainsbury retailer Kingfisher and telecoms giant Vodafone .

On the mid-cap index, Go-Ahead Group raised full-year expectations for its London and international bus division, sending its shares up 10.5% and putting them on course for their best day since September 2018.

Entertainment One surged 15%, recouping almost all of its losses from the previous session after it denied media reports that President Mark Gordon would leave the company. Its shares were on track for their best day in more than 3-1/2 years.

Outsourcer Mitie climbed 6% on the small-cap index, as its engineering and security businesses helped it top its own full-year operating profit forecast and guide to mid-single digit earnings growth in 2019.

(Reporting by Shashwat Awasthi in Bengaluru; editing by Patrick Graham)

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