London close: FTSE climbs to seven-day high on Powell remarks, oil
London shares climbed to their highest finish in a week on Thursday, helped along by an oil price rally and global stock market boost on the back of a dovish speech by Federal Reserve chief Jerome Powell.
The FTSE 100 closed 34 points or 0.5% higher at 7,038.95 as the pound fell 0.3% against the dollar to 1.2782 and 0.4% versus the euro to 1.1233, weighed by downbeat assessments on the UK's post-Brexit growth prospects from both the Chancellor and the Bank of England.
Sterling had briefly ticked up against the dollar on Wednesday after Powell said US interest rates were "just below" neutral levels barely two months after saying rates were "a long way" from neutral, sparking the best session for US equity markets since March and denting the greenback.
"European markets have followed their US counterparts higher, with the positive effect of Jerome Powell’s comments yesterday helping boost stocks despite the negative impact of a weakening dollar," said market analyst Joshua Mahony at IG.
"The ability to maintain these gains will be dependent on a follow up from the FOMC, with minutes being released later today. Many of today’s top FTSE 100 outperformers have come from the mining sector, with hopes of an impending breakthrough in talks between the US and China driving optimism that the barriers to global trade could begin to begin to come down."
There was some good news for UK banks, though, as the Bank of England stress tests revealed that they are strong enough to survive a disorderly Brexit, even if the BoE saw a potential scenario that this could leave the country worse off than in the 2008 financial crisis. None of the high street lenders were told to raise billions of pounds in capital to strengthen their finances.
Meanwhile, Thursday's figures from the BoE showed that mortgage approvals rose to 67,100 in October from 65,700 the month before, well above the consensus 64,600. However, net consumer credit rose by just £0.9bn in October, below the average of the previous six months of £1.3bn and the consensus of £1.0bn.
On the markets, miners racked up solid gains as copper prices continued their rally, with Glencore, Antofagasta and BHP all higher.
Rio Tinto was also higher as bosses gave the green light for investment in its $2.6bn (£2.03bn) Koodaideri iron ore mine in Western Australia.
Oil prices, having slid to 13-month lows as crude inventories unexpectedly surged and with Saudi Arabia refusing to cut production unless fellow producers joined in with supply caps, perked up sharply on reports that Russia has accepted the need to cut production. Brent crude jumped 1.8% to $59.86 a barrel. Shell, Tullow Oil and Premier Oil were lifted, though BP was left behind.
Elsewhere, Unilever shares reacted positively after the consumer goods giant said that chief executive Paul Polman will step down from the role at the end of next month and be replaced by the group's beauty & personal care boss, Alan Jope.
Ashtead eclipsed these gains with its own CEO announcement, as the equipment rental firm promoted the boss of its US business to the top job as Geoff Drabble steps down after 12 years in charge.
RHI Magnesita was the standout gainer on the FTSE 250 as analysts sang its praises after the company's first site visit as a combined business. Broker Numis lifted the stock to 'buy' from 'add', seeing the potential for sizeable operational efficiencies. Berenberg, meanwhile, said it came away from the visit "encouraged" by the high level of engineering, product development and manufacturing automation in the business.
Drinks maker Britvic and pub operator Greene King fizzed higher on the back of full-year and interim results, while Go-Ahead was boosted by a well-received trading update.
On the downside, Intu Properties tumbled more than 30% after a consortium led by its deputy chairman John Whittaker walked away from its takeover offer for the shopping centre owner, citing economic uncertainties. Hammerson, Shaftesbury, British Land and Land Securities were also sent into the red.
Analysts at Kempen said the withdrawal of the offer "has some stark implications for the company and sector".
Thomas Cook - which issued a profit warning earlier in the week - fell as the tour operator confirmed it swung to a full-year loss despite rising sales.
In broker note action, British American Tobacco was upgraded to 'sector perform' at RBC Capital Markets, while Cobham was lifted to 'buy' at Berenberg and Senior was cut to 'neutral' JPMorgan.
International Consolidated Airlines, Johnson Matthey, Land Securities, Severn Trent, Bellway, Caledonia Investments, Diploma, Electrocomponents, Euromoney Institutional Investor, Hill & Smith, JD Sports, Renewi, TalkTalk and Telecom Plus were among the companies whose stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,056.54 0.74%
FTSE 250 (MCX) 18,627.51 -0.07%
techMARK (TASX) 3,498.51 0.73%
FTSE 100 - Risers
Ashtead Group (AHT) 1,795.50p 3.94%
Antofagasta (ANTO) 836.40p 3.72%
Anglo American (AAL) 1,611.00p 3.28%
Wood Group (John) (WG.) 646.60p 3.06%
Ferguson (FERG) 5,052.00p 2.95%
Randgold Resources Ltd. (RRS) 6,450.00p 2.77%
Johnson Matthey (JMAT) 3,009.00p 2.56%
Smith (DS) (SMDS) 340.00p 2.50%
Melrose Industries (MRO) 184.40p 2.44%
Glencore (GLEN) 293.30p 2.43%
FTSE 100 - Fallers
British Land Company (BLND) 570.00p -5.79%
Land Securities Group (LAND) 832.40p -4.91%
Severn Trent (SVT) 1,877.00p -3.74%
Persimmon (PSN) 1,965.50p -2.41%
Next (NXT) 5,060.00p -2.35%
GVC Holdings (GVC) 751.50p -2.28%
Taylor Wimpey (TW.) 138.55p -2.02%
Morrison (Wm) Supermarkets (MRW) 243.50p -1.99%
St James's Place (STJ) 1,033.50p -1.94%
Berkeley Group Holdings (The) (BKG) 3,304.00p -1.93%
FTSE 250 - Risers
RHI Magnesita N.V. (DI) (RHIM) 3,690.00p 8.53%
Britvic (BVIC) 847.50p 8.31%
Go-Ahead Group (GOG) 1,656.00p 6.77%
UDG Healthcare Public Limited Company (UDG) 659.50p 5.86%
Hochschild Mining (HOC) 163.00p 5.57%
Greene King (GNK) 535.60p 5.52%
Mediclinic International (MDC) 365.40p 4.61%
IP Group (IPO) 115.80p 4.32%
Renishaw (RSW) 4,262.00p 4.05%
Weir Group (WEIR) 1,465.50p 4.05%
FTSE 250 - Fallers
Intu Properties (INTU) 117.00p -39.25%
Hammerson (HMSO) 389.10p -7.58%
Thomas Cook Group (TCG) 33.68p -6.65%
Bellway (BWY) 2,599.00p -5.35%
Paragon Banking Group (PAG) 414.40p -5.13%
Senior (SNR) 237.20p -4.35%
Dunelm Group (DNLM) 551.50p -4.25%
Amigo Holdings (AMGO) 263.20p -4.24%
Derwent London (DLN) 2,914.00p -3.83%
IntegraFin Holding (IHP) 298.90p -3.58%