Rolls-Royce shares roared ahead today on the promise of £1 billion for investors in a stock buy back as the firm set the pace during a session when the wider FTSE 100 Index shifted up a gear.
Rolls shares revved up by 8 per cent or 82p to 1092p.
The wider London market was also in positive mood, climbing 29.6 points to 6808.1.
Bourses in Frankfurt and Paris made gains too though New York's Dow Jones Industrial Average edged into the red after making strong gains in the previous session.
It came after the US Federal Reserve signalled that interest rates would remain at record lows for longer.The pound soared to a near six-year high against the greenback as remarks by Fed chair Janet Yellen suggested the UK would be the first to hike the cost of borrowing.
Her comments, coupled with signals from the Bank of England that have prompted expectations of a rise by the end of 2014, saw sterling surpass 1.70 US dollars and beat a previous August 2009 peak to reach a level not seen since October 2008.
The pound was also slightly up against the single currency, at 1.25 euros.
Optimism over the UK recovery was boosted by the latest retail sales figures from the Office for National Statistics, which showed the sector is enjoying the longest period of sustained growth since before the recession.
Demand for UK-made goods also rose strongly in June, according to the latest CBI Industrial Trends Survey.
Mobile phone giant Vodafone led a shortened fallers' board after Bank of America Merrill Lynch said the near-term outlook in Europe for the group continued to be difficult. Shares were off 3.2p at 194.8p.
In contrast, BT rose 7.5p to 392.5p after regulator Ofcom outlined new requirements on the telecoms firm to promote competition among superfast broadband providers. Shares were higher as Ofcom also rejected a complaint from rival TalkTalk that BT had failed to maintain a sufficient margin between its wholesale and superfast-broadband retail prices. In corporate news, shares in transport group Go-Ahead rose after it said it expects its Southern, London Midland and Southeastern rail division to deliver operating profits ahead of previous expectations.
The improvement reflects lower energy costs and a better operational performance after its three rail franchises achieved growth in passenger journeys of between 4 per cent and 5 per cent.
Investec Securities kept its buy rating on the stock and increased its forecast for full-year pre-tax profits by 9.2 per cent to £83 million. Shares climbed 4 per cent or 86p to 2263p.
Rival operator Stagecoach was also up, lifting nearly 2 per cent or 6.3p to 373.8p after its Virgin Rail joint venture secured a new West Coast mainline franchise until March 2017.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article