St James's Place outperforms as FTSE stages late rally

By Sudip Kar-Gupta LONDON (Reuters) - Britain's top equity index staged a late rally on Thursday to recover from losses earlier in the day, with wealth management group St James's Place outperforming after strong results. The blue-chip FTSE 100 index <.FTSE> had been in negative territory for much of the day. However, European stock markets then staged a late rally as a rise in U.S. third quarter gross domestic product (GDP) and a surge in the shares of credit and debit card group Visa helped push U.S. stock markets higher. The late recovery enabled the FTSE to close up by 0.2 percent, or 9.68 points, at 6,463.55 points -- marking the third day in a row of gains for the FTSE, which continued its rebound off 15-month lows, reached earlier in October. "Every little pullback on the market has seen buyers rapidly come back in. We're quite bullish in the near term," said Dafydd Davies, partner at Charles Hanover Investments. St James's Place closed up 3.6 percent, making it the best-performing FTSE 100 stock in percentage terms, after reporting a 17 percent rise in its funds under management. Shares in artificial knee and hip maker Smith & Nephew also advanced by 3.5 percent after posting higher third-quarter profits. COMMODITY FIRMS UNDERPERFORM However, commodity companies -- such as miners and energy stocks -- underperformed. Those sectors were impacted by a rise in the U.S. dollar, which advanced on foreign exchange markets after the U.S. Federal Reserve painted a brighter picture of the U.S. economy and ended its quantitative easing (QE) bond purchase programme. The Fed stopped the QE programme on Wednesday and in a statement noted the improving U.S. labour market. While the Fed also said interest rates would remain low for a "considerable time," the Fed's statement helped to push up U.S. yields and increased the dollar's appeal. This, in turn, hit mining and energy stocks, since a rise in the dollar makes dollar-priced commodities -- such as oil and copper -- more expensive for buyers using other currencies. "The 'cheap' dollars that had flooded the market are now being reduced and hence the dollar has appreciated against most major currencies, and commodities are once again looking pretty volatile," said Spreadex trader Toby Goar. The FTSE hit a peak of 6,904.86 points at the start of September, its highest since early 2000, but then slumped to 15-month lows in October as weak European economic data knocked back stock markets. The index remains down by around 4 percent since the start of 2014. (Additional reporting by Alistair Smout; Editing by Andrew Roche)