Alexander Bueso WebFG News | 20 Oct, 2017 17:36 - Updated: 17:36 | | |
London stocks finished the Friday session almost exactly flat despite encouraging noises emerging from Brussels mingled with optimism stateside over proposed tax reforms.
At the closing bell, the FTSE 100 had added 0.19 points to 7,523.23, while the pound recovered from an earlier 0.3% deficit against the resurgent dollar to trade higher by 0.21% to 1.3187 and rallied from an earlier one-month low versus the euro to climb 0.86% to 1.1199.
European leaders said they agreed to move internal discussions on Brexit onto the 'stage 2' issues of trade and the exit transition, confirming rumours from earlier in the week.
While EU 27 leaders formally agreed that these discussions will not yet take place with the UK team due to the "insufficient progress" made in negotiations, Prime Minister Theresa May revealed the UK is examining “line by line” how much it will pay the EU in its divorce bill and refused to deny than the UK will pay more than the €20bn (£17.9bn) she offered in her recent Florence speech.
This gave pound a minor boost, said analyst Craig Erlam at Oanda: "May's acknowledgement that the UK will honour its financial commitments to the EU while claiming her counterparts will consider a vision for a future partnership is a small step forward in negotiations that has seemingly failed to be achieved in discussions between David Davis and Michel Barnier."
Overnight, the dollar surged against the pound and other currencies after the US Senate agreed a budget blueprint for the 2018 fiscal year that would seem to allow Republicans to pursue Donald Trump's proposed tax-cut package without the need for Democratic support.
This deal goes a long way to paving the way for the $1.5tn US tax cut package, said analyst Mike van Dulken at Accendo Markets, and would represent "the first major reform from President Trump’s administration following several stumbles, seen as supportive of US growth, Fed rate hikes and, of course, equity markets."
Pressure on the pound early in the session was also coming from diminishing expectations for a November rate hike, after Wednesday's decline in real wages, poor retail sales and comments overnight from Bank of England deputy governor Jon Cunliffe that cast further doubt on a November rate hike, as he argued that the UK is "not seeing sustained signs of domestic inflation pressure".
But better news on UK public finances would not have done any harm.
Public public sector net borrowing continued to shrink more than expected, with September's PSNB excluding stakes in banks coming out at £5.90bn, the lowest September borrowing figure for a decade and below the consensus forecast of £6.5bn.
However, economists warned that the Chancellor's Budget next month is not expected to see many big fiscal giveaways, as the deficit is forecast to have a tougher time later in the year, with Philip Hammond also expected to keep his fiscal powder dry for Brexit clean-up operations.
Looking at individual shares, mining heavyweights were among those leading the charge, with Antofagasta top of the tree after copper prices jumped to the highest level in over three years. Anglo American, Rio Tinto, Glencore and BHP Billiton were also on the front foot.
Recent oil gains were being unwound though as Brent fell back to the lowest level in a week.
Fresnillo was a faller, however, after being downgraded by Credit Suisse and on the back of strength in the greenback.
Barclays was higher as a Berenberg upgrade came alongside news that Red Kite, a hedge fund specialising in metals investments, was reported to have filed an $850m lawsuit against the bank, accusing it of causing it vast losses by front-running its trades in the copper market.
Going the other way was Acacia Mining, a day after a deal to resolve its dispute with the Tanzanian government sent its shares shooting higher. The gold miner reported revenue down 40% for the third quarter and a much diminished cash balance.
InterContinental Hotels Group was lower despite reporting a third quarter of “good” performance, with revenue per available room up 2.3%. This meant for the year-to-date, revpar edged up 2.2% from 2.1% in the first half, including 1.5% in the second quarter.
FTSE 100 - Risers
Standard Chartered (STAN) 772.10p 3.13%
NMC Health (NMC) 2,908.00p 2.76%
Rentokil Initial (RTO) 321.60p 2.42%
RSA Insurance Group (RSA) 641.00p 2.40%
Barclays (BARC) 195.70p 1.93%
G4S (GFS) 280.40p 1.85%
Prudential (PRU) 1,866.50p 1.66%
CRH (CRH) 2,790.00p 1.60%
easyJet (EZJ) 1,315.00p 1.39%
Antofagasta (ANTO) 1,000.00p 1.27%
FTSE 100 - Fallers
Fresnillo (FRES) 1,367.00p -3.60%
Unilever (ULVR) 4,161.00p -3.21%
Reckitt Benckiser Group (RB.) 6,610.00p -2.65%
Shire Plc (SHP) 3,677.50p -1.89%
Hammerson (HMSO) 529.00p -1.76%
Compass Group (CPG) 1,584.00p -1.37%
Land Securities Group (LAND) 975.00p -1.32%
Randgold Resources Ltd. (RRS) 7,395.00p -1.27%
Associated British Foods (ABF) 3,325.00p -1.04%
National Grid (NG.) 925.80p -0.96%
FTSE 250 - Risers
Spire Healthcare Group (SPI) 261.30p 5.79%
Provident Financial (PFG) 935.00p 4.94%
Vectura Group (VEC) 103.40p 3.40%
Evraz (EVR) 327.10p 3.38%
Paragon Banking Group (PAG) 473.60p 2.24%
Metro Bank (MTRO) 3,620.00p 2.09%
TBC Bank Group (TBCG) 1,705.00p 2.04%
Daejan Holdings (DJAN) 6,220.00p 1.97%
Renishaw (RSW) 4,796.00p 1.83%
Just Group (JUST) 154.90p 1.77%
FTSE 250 - Fallers
Acacia Mining (ACA) 194.80p -8.11%
Brown (N.) Group (BWNG) 311.40p -4.18%
JD Sports Fashion (JD.) 338.00p -4.06%
Hochschild Mining (HOC) 227.60p -2.23%
Hunting (HTG) 455.00p -2.21%
Intu Properties (INTU) 217.20p -2.12%
Sophos Group (SOPH) 575.50p -2.12%
Essentra (ESNT) 502.50p -2.05%
Ocado Group (OCDO) 291.90p -1.92%
FDM Group (Holdings) (FDM) 990.00p -1.79%
Wall Street finished mixed on Wednesday, following the record highs set the day before and amid lighter-than-usual trading volumes ahead of the Thanksgiving holiday on Thursday.
Analysts at Jefferies upgraded home improvement products retailer Kingfisher (KGF) to 'buy' from its previous 'hold' rating on Wednesday, raising its target price from 310p to 400p along the way.
Stocks ended the session modestly lower as traders waited for the release of the minutes of the US Federal Reserve's last rate-setting meeting in the evening and monitored the news-flow out of Germany, amid speculation that a 'grand coalition' between Germany's two main political parties, the centre-right CDU/CSU and the Socialist SPD, may yet be possible.
Saad al-Hariri has revoked his resignation as Lebanon's prime minister, according to a local news report on Wednesday.
A range of new housing policies were proposed by Chancellor Philip Hammond in his Budget statement, including more funds for smaller housebuilder, a probe into potential holding of land by major housebuilders and a stamp duty cut for first-time buyers.
Wall Street is holding its ground following the record highs set the day before, albeit amid lighter than usual trading volumes ahead of the Thanksgiving Holiday on Thursday, with investors looking to the release of the minutes of the most recent meeting of the Federal Open Market Committee.
Shares closed higher on Wednesday as investors sifted through corporate releases as well as the Autumn Budget.
The FTSE 250 index was up around 0.50% on the day in which Chancellor Philip Hammond revealed his budget for the upcoming year.
Motor dealer Cambria Automobiles managed to successfully grow profit and revenue throughout the financial year, as per-unit profits counteracted a slide in sales volumes.
Oil and gas exploration firm Pantheon Resources announced "another year of progress" in its full-year results on Wednesday, as it completed the transition from a pure-play exploration company to a full-cycle energy and power business.