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UK blue chips rise on Putin remarks, hopes for loose monetary policies
August 14, 2014 / 4:05 PM / 3 years ago

UK blue chips rise on Putin remarks, hopes for loose monetary policies

* FTSE 100 up 0.4 pct

* Putin comments alleviate concern over Ukraine escalation

* TUI Travel up as German firm says merger plans on track

* British Land up on Bank of America Merrill Lynch upgrade

By Tricia Wright

LONDON, Aug 14 (Reuters) - Britain’s top equity index rose on Thursday, bolstered by apparently conciliatory comments from Russian President Vladimir Putin on a visit to Crimea, as well as expectations for a continuation of ultra-loose monetary policy.

TUI Travel advanced 2.2 percent in brisk trade after TUI AG’s chief executive said the German company’s plans for a merger with the London-listed unit were on track.

Trading volume in the stock stood at around twice its 90-day daily average, against just three quarters on UK benchmark.

The blue-chip FTSE 100 index closed up 28.58 points, or 0.4 percent, at 6,685.26 points.

On a trip to Crimea, the Ukrainian region annexed by Russia in March, Putin said his country would stand up for itself but not at the cost of confrontation with the outside world.

Investors were also betting that the continuation of loose monetary policies would help boost equities.

Weak UK wage data on Wednesday prompted the market to push back its expectations for when the Bank of England would lift interest rates.

Euro zone data released on Thursday was also weak, showing Germany’s economy unexpectedly shrank in the second quarter while France stagnated. That shortened the odds of a move by the European Central Bank to shore up the economy via an asset-purchase programme, which would drive up share prices.

“Clearly Putin’s comments have helped in de-escalating the situation (in Ukraine), but as a reaction to the poor economic data we’ve been seeing - that’s turned out to be quite positive for equities,” Richard Hunter, head of equities at Hargreaves Lansdown, said.

Putin avoided the broadsides previously directed at Western countries during the crisis over they see as Russian support for separatist uprising in Ukraine - an accusation Moscow denies - although NATO’s chief said Putin had sounded dovish in the past yet had not followed up his words with concrete actions.

Property company British Land also notched up good gains, rising 2.5 percent after Bank of America Merrill Lynch raised its rating on the stock to “buy” from “neutral”. (Additional reporting by Sudip Kar-Gupta; Editing by Mark Heinrich)

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