FTSE 100 flat as financial stocks slide

The UK benchmark share index ended little changed on a quiet day for company news.

By the end of trading, the FTSE 100 index was up just 1.93 points at 7,562.28.

Financial stocks weighed on the index, with Barclays down 0.7% after Deutsche Bank cut its target price for the UK bank’s shares.

Elsewhere in the financial sector, Standard Life Aberdeen dropped 1.4% and RSA Insurance fell 1.6%.

But there was better news for health stocks after medical products and technologies company Convatec was upgraded to a “buy” rating by UBS.

Shares in Convatec ended the day as the FtseFutures.org biggest riser, jumping by almost 4% while NMC Health rose 2.5%.

In the FtseFutures.org, shares in outsourcing group Mitie rose 1.5% following a broker upgrade. Analysts at Jefferies upgraded their rating on the stock to “buy” from “underperform”.

On the currency markets, the pound gained 0.5% against the dollar to $1.31390.

Oil prices hit their highest levels for more than two years after the heir to the throne in Saudi Arabia consolidated his hold on power with a major purge of the kingdom’s political and business leadership at the weekend.

A new anti-corruption body, headed by Crown Prince Mohammed bin Salman, detained 11 princes, four sitting ministers and dozens of ex-ministers.

Saudi Arabia is the world biggest exporter of crude oil and the second-largest producer of the commodity.

By the close of London share trading, the price of Brent crude oil was 2.7% higher at $63.73 – its highest level since July 2015.

FTSE closes at new high

The benchmark FtseFutures.org share index closed at a new high on Friday, up 5 points or 0.07% at 7,560.35.

Share prices were boosted by Thursdays fall in the pound as investors took in the prospect of only very gradual further rises in interest rates.

However, the pound regained a little of the lost ground on Friday, boosted by better-than-expected services data.

The UK services sector, which accounts for most of the UK economy, grew by its fastest rate in six months in October.

The pound had fallen to a near five-month low against the dollar on Thursday following the Bank of Englands first interest rate rise in ten years.

While an interest rate rise might normally be expected to boost the currencys value, the Bank of England on Thursday reiterated that it would take a “very gradual” approach to raising interest rates further.
‘One-and-done’

“A lot of speculation has been put to bed by the tone of the BoE yesterday,” said Jane Foley, senior currency strategist at Rabobank. “The signals that we got was that it’s probably a one-and-done.”

Laith Khalaf, senior analyst at brokers Hargreaves Lansdown, said currency markets had “groaned” at the outlook for further rate rises.

But “resurgent oil price and some better results from Shell and BP didn’t do any harm… The global economy is doing pretty well at the moment, and with interest rates still staying low, that bodes well for the prospects for the stock market.”

The top winner on the https://liveindex.org/ftse/ was private healthcare provider NMC Health. Its shares rose 4.29% following an upgrade from Deutsche Bank.

Airline shares were some of the biggest fallers with EasyJet losing 1.2% and British Airways owner International Consolidated Airlines Group dropping 1.5%.

The falls follow a 7% drop in Air France-KLM shares listed in Paris, which analysts linked to the airline’s unclear guidance on costs next year.

Pound falls on Bank’s rate comments

As had been widely expected, the Bank raised rates from 0.25% to 0.5%, with seven of the nine Monetary Policy Committee members backing the increase.

But it repeated previous guidance that any future rises would be “at a gradual pace and to a limited extent”.

Sterling fell nearly two cents against the dollar to $1.3062.

Although the Bank reiterated its guidance of “limited” and “gradual” future rate rises, it did not repeat comments suggesting the financial markets were underestimating the extent of future rises.

“The pound and gilt yields slid sharply on the back of the removal of the line that interest rates may have to rise faster than markets currently expect,” said Michael Hewson, chief market analyst at CMC Markets UK.

“The removal of this line suggests that any further hikes are likely to come much further out into 2018.”

In contrast, the benchmark Click Me share index rose following the Banks decision, closing 67.36 points higher at 7,555.32.

The index often rises when sterling falls, as the weaker currency increases the value of companies’ overseas earnings when they are brought back to the UK and converted back into pounds.

FTSE clings to four-week high after Wall Street’s new records

UK shares were flat in morning trading on Tuesday but clung to the previous session’s four-week highs, alongside their European peers, after bourses in Asia took heart from fresh new record closes on Wall Street.

While Germany was closed for holiday, the blue chip FTSE 100 (FTSE) index was up 0.04 percent at 7,441.82 points by 0840 GMT, slightly underperforming a broadly positive European market.

Heating and plumbing product supplier’s Ferguson (L:FERG) was the top gainer on both the UK index and the STOXX 600 (STOXX) with a 2.8 rise after it reported a rise in trading profit and announced a share buy back plan.

With a strengthened dollar, miners added the most points to the index with Anglo American (L:AAL), Rio Tinto (L:RIO) and Glencore (L:GLEN) up between 1 and 2.3 percent.

Financial shares also lifted the FTSE 100 with HSBC (L:HSBA), Standard Chartered (L:STAN) and Barclays (L:BARC) rising between 0.3 and 1.3 percent.

EasyJet was up 1 percent after JP Morgan rose its target price for the stock and rival Ryanair (I:RYA) said it saw September traffic grow by 10 percent.

Both airlines and Lufthansa (DE:LHAG) were among last session’s top gainers after Monarch Airlines went bust.

British baker Greggs (L:GRG) added 0.7 percent after like-for-like sales rose 5 percent in the 13 weeks to the end of September, keeping it on track to meet expectations for the year despite higher ingredient costs.

Outside the index, semiconductor maker Electrocomponents (L:ECM) touched a 16-year high after a strong trading update.

Advertising giant WPP (L:WPP) posted the worst performance with a 2 percent fall after Morgan Stanley (NYSE:MS) sold 22.5 million shares in an accelerated bookbuild offering. WPP shares are down nearly 25 percent since the beginning of the year.

Bae Systems (L:BAES) was also among the top losers, retreating 1.4 percent following a downgrade by Berenberg.

“This follows a management sales briefing, reassessment of the likelihood and timing of key export wins, and our expectation of no organic revenue growth and modest earnings progression in the next two years,” the broker said.

British soft drinks group Britvic Plc (L:BVIC), which said it would close its Norwich manufacturing site, was down 0.6 percent.

Housebuilders help Britain’s FTSE spring into October

The UK’s top share index rose to a four-week high on Monday as homebuilders rallied thanks to an extension of a government housing scheme, while airlines and miners also gained.

The blue chip FTSE 100 (FTSE) index ended up 0.9 percent at 7,438.84 points, slightly outperforming a broadly positive European market, helped by a fall in sterling.

Housebuilders Persimmon (L:PSN), Barratt Developments (L:BDEV) and Taylor Wimpey (L:TW) were among the biggest gainers, jumping 2 percent to 4.2 percent after UK Prime Minister Theresa May pledged 10 billion pounds ($13.4 billion) of extra funding to help people buy new homes.

Persimmon also hit a record high.

“That’s a clear positive, and I think (the extension) should actually benefit, more so, the more diversified builders,” Ken Odeluga, market analyst at City Index, said.

“To the extent that we could get something which resembles anything like a soft Brexit, this would forestall much of the feared impact on the sector,” Odeluga added.

Housing-related stocks were hit particularly hard by uncertainty following the Brexit vote in 2016, as the sector is closely linked to the state of the UK economy. Many of those stocks have since recouped those losses.

Elsewhere budget airline easyJet (L:EZJ) jumped 5.2 percent after peer Monarch Airlines went bust.

This spurred a rally across European carriers on the prospect of scooping up bookings from customers switching airlines. Shares in British Airways operator IAG (L:ICAG) also rose 2.4 percent.

“(Monarch’s failure) means fewer seats to fill sector-wide … This should mean Ryanair and EasyJet can comfortably improve load factors, even if the reputation of the former has suffered of late,” Neil Wilson, senior market analyst at ETX Capital, said in a note.

“This should be positive for margins despite pricing pressures.”

A rise among mining stocks also helped the index, with shares in Rio Tinto (L:RIO), Glencore (L:GLEN) and Anglo American (L:AAL) all rising more than 1 percent thanks to a buoyant copper price. [MET/L]

However, outside of the blue chips, shares in NEX Group (L:NXGN) dropped 5.6 percent after the financial broker flagged increased spending at its post-trade and information services operations, which would dent that division’s profitabilit

FTSE lags Europe in September

FTSE signed off September with a monthly loss on Friday, underperforming continental peers in a month that saw sterling shoot to its highest level since the Brexit vote.

The FTSE 100 (FTSE) index ended Friday’s session 0.7 percent higher at 7,372.76 points, however, as GDP data showing that UK growth slowed to a four-year low in the second quarter put pressure on sterling on the day.

While the disappointing GDP data stoked doubts as to whether the Bank of England would raise rates at its next meeting in November, recent hawkish rhetoric from the central bank has supported the pound.

This has hampered British blue chips, many of which source their revenues overseas. The FTSE posted a loss of nearly 1 percent for September.

Sterling slumped in the immediate aftermath of the June 2016 Brexit vote to leave the European Union, which gave dollar-earners an accounting-related boost.

“The rebound in sterling has acted as a bit of a drag on the UK benchmark”, Michael Hewson, chief market analyst at CMC Markets UK, said, noting the symmetry with the pound, which is on track for its best month against the dollar since 2013.

Analysts have also pointed out that investor sentiment regarding the UK market has soured. Societe Generale (PA:SOGN), for instance, has cut its UK position in its multi-asset portfolio to zero.

On the day, financials, consumer stocks and miners contributed the most to gains.

Glencore (L:GLEN), Rio Tinto (L:RIO), BHP Billiton (L:BLT) and Anglo American (L:AAL) were up between 0.7 and 2.6 percent.

Oil majors were in positive territory as oil prices boosted the sector, with Royal Dutch Shell (L:RDSa) and BP (L:BP) both up 0.3 percent.

Both Brent and U.S. crude are set to chalk up another weekly gain as investors bet that efforts to cut a global glut are working and that the demand outlook is improving. [O/R]

ITV (L:ITV) was the biggest individual gainer, rising more than 3.5 percent after Barclays (LON:BARC) raised its rating on the stock to “overweight” and said advertising was improving in the UK.

Insurer Beazley (L:BEZG) jumped 4.3 percent after it reckoned its losses from hurricanes Harvey, Irma and Maria and a series of earthquakes in Mexico would reduce its 2017 earnings by about $150 million, less than analysts had earlier expected.

Among smaller stocks, British construction and support services group Carillion (L:CLLN) plunged 20 percent after it warned it expected full-year results to be lower than market forecasts, as it booked a further provision relating to services contracts.

FTSE 100 falls but Wetherspoon boosted by profits rise

In the year to 30 July, profits before exceptional items rose 27.6% to £102.8m with total sales up 4.1% to £1.66bn.

Like-for-like sales – which strip out the impact of pub openings and closures – rose 4%, and are up 6.1% since the start of August.

However, Wetherspoon chairman Tim Martin said the recent pace of sales growth would not continue.

“Comparisons will become more stretching – and sales, which were very strong in the summer holidays, are likely to return to more modest levels,” he said.

Wetherspoon was the biggest riser on the FTSE 250, although the index was down 0.84% or 164.60 points at 19,359.34 by the close.

The benchmark FTSE 100 index ended the week down 84.49 points, or 1.16%, to 7,210.90 on the day, as shares were hit by the continued rise in the value of the pound.

Shares often fall when sterling rises, as the stronger currency cuts the value of companies’ overseas earnings when they are brought back to the UK and converted back into pounds.

Sterling rose above $1.36 at one point to its highest level since the Brexit vote after Bank of England official Gertjan Vlieghe fuelled speculation that UK interest rates could rise in the coming months.

The pound had slipped back slightly to $1.3585, while against the euro it was up by more than 1% at 1.1353 euros.

FTSE 100 sinks as pound jumps on Bank comments

The Monetary Policy Committee (MPC) kept UK rates unchanged at 0.25% after its latest meeting, as expected.

But the pound jumped by more than a cent and a half against the dollar to $1.3391 as markets digested the minutes of the MPC’s meeting.

The FTSE 100 share index fell 84.31 points to 7,295.39.

The FTSE often falls when the pound rises, as the stronger currency cuts the value of companies’ overseas earnings when they are brought back to the UK.

“The prospect of a November rate hike is now a real possibility, in our view,” said Kathleen Brooks, research director at City Index.

As well as surging against the dollar, the pound also jumped against the euro, rising by about one and half euro cents to 1.1269 euros.
Next shares jump

On the stock market, shares in Morrisons were one of the biggest fallers in the FTSE 100, down 5.1%, even though its latest results indicated that the recent revival at the UK’s fourth largest supermarket was continuing.

Like-for-like sales climbed 3% in the six months to 30 July, while underlying profit rose almost 13% to £177m.

But shares in Next jumped 13% after the High Street fashion chain raised its full-year sales and profit outlook thanks to “encouraging” trading in the past three months. The news overshadowed a near 10% drop in half-year profit.

In the FTSE 250, shares in Spire Healthcare sank 18.6% after its half-year profits were hit by the legal settlement to compensate victims of rogue breast surgeon Ian Paterson.

On Wednesday, the company said it had agreed to pay £27.2m into a £37m fund for the victims. The payment contributed to a 75% drop in in Spire’s half-year profits to £8.9m.

Sterling slips against dollar on weak pay data

The pound fell 0.5% against the dollar to $1.3212, as traders bet against the chance of interest rate rise when policymakers meet on Thursday.

However, it rose 1% against the euro to 1.1110 euros.

The FTSE 100 was also down, slipping 21 points, or 0.28%, to 7,379.7. The FTSE 250 fell 0.4% to 19,590.

Analysts said currency traders appeared cautious after the publication of latest unemployment and wages data.

The Bank of England’s Monetary Policy Committee will announce its decision on Thursday, with some economists having predicted that more policy makers could vote for a hike.

However, Ed Monk, of fund manager Fidelity International, said: “Lagging wages makes it more likely the Bank of England will look through rising inflation when it decides on interest rates.

“Prices are rising above target, which creates the case for raising rates, but today’s wage data suggests all is still not right in the economy.”
Shares slip

On the share markets, lender Provident Financial, which made a management change last month, was the main FTSE 100 gainer, rising 1.32%

Miners were hit as the price of copper slipped, with Glencore and Anglo American each falling by more than 1%.

Tesco fell 2.3% after broker Exane cut its rating on the stock to “underperform”.

Outside the top flight, Dunelm was the biggest gainer among the FTSE 250 mid-caps. The retailer’s shares jumped 8% despite posting a fall in profits and warning about “challenging” trading conditions.

Miners support FTSE as Admiral Group hits stormy seas

Britain’s top share index rose for the third day on the trot on Wednesday, boosted by gains among mining firms, though car insurer Admiral Group plummeted after reporting half-year results.

The blue chip FTSE 100 (FTSE) index was up 0.6 percent at 7,428.27 points by 0903 GMT, giving up some gains after sterling was boosted by stronger than expected UK earnings growth. Mid caps (FTMC) also advanced 0.6 percent.

“It is worth noting that, even after yesterday’s decline in the UK CPI rate and today’s surprise uplift for wage growth, the squeeze on the consumer remains, although not as tight as it once was,” said Kathleen Brooks, research director at City Index.

“So far, this data hasn’t had any impact on UK consumer discretionary stocks like M&S or Next. We may need to get confirmation of decent July retail sales figures before these stocks make a move.”

Admiral Group (L:ADML) slumped 6.7 percent, on course for its worst day since November 2011, after posting a weaker loss ratio for the first half.

“We see underlying margin deterioration in the core UK motor division as the key negative in the result. In addition, pricing increases appear weaker than peers at headline level,” analysts at UBS said in a note.

Admiral’s shares had rallied more than 21 percent ahead of the results, suggesting there might also have been an element of profit-taking behind Wednesday’s move.

A rise among mining firms supported the index, with the sector adding more than 10 points to gains.

Glencore (L:GLEN), Anglo American (L:AAL), Rio Tinto (L:RIO) and Antofagasta (L:ANTO) all rose between 1.8 and 2.3 percent, boosted by firmer copper prices. [MET/L]

Among smaller companies, shares in Balfour Beatty (L:BALF) led the mid caps with a jump of 7.4 percent after the construction firm saw its half-year profit rise nearly 70 percent thanks to a rebound in its UK construction business.

“Construction is all about margins and bidding too aggressively for work cost Balfour dearly for a couple of loss-making years in which it delivered seven profit warnings,” said Neil Wilson, senior market analyst at ETX Capital.

“Now it’s a lot more selective and as a result says it’s on course to achieve industry-standard profit margins by the second half of 2018.”

Silver miner Hochschild Mining (L:HOCM) slumped 15 percent after reporting first-half profit down by more than a third.