London close: FTSE higher despite Brexit comments from Carney
London stocks were hovering around the flatline by the close on Thursday, failing to make any significant headway as the pound popped higher following a brief dip in the wake of dovish comments from Bank of England governor Mark Carney.
The FTSE 100 was relatively flat at 7,322.82, up 0.13% while the pound was up 0.45% at 1.3446 against the dollar, having slipped earlier as Carney dropped no further hints that interest rates were about to rise.
European markets were slightly mixed with the DAX closing 0.37% higher to 12,704.65, the CAC 40 0.22% firmer at 5,293.77 and the IBEX 35 0.46% lower to 10,320.70.
Speaking at the opening of a two-day conference to mark 20 years of independence for the BoE, he said Brexit will lead to weaker real income growth, while the prosperity of the UK will depend on the final Brexit agreement.
Meanwhile, Theresa May used her speech to defend free market capitalism and reiterate her determination to be tough on public spending in the face of growing pressure to ease austerity.
Spreadex analyst Connor Campbell said: "Speeches from Mark Carney and Theresa May did little to improve things for either the index or the currency, with the biggest (and gloomiest) takeaway arguably being the former stating that the Bank of England ‘cannot prevent the weaker real income growth’ that is likely to accompany Brexit."
Investors were also digesting Trump's new tax plans, announced late on Wednesday, which would see corporate tax cut to 20% from 35% and create just three tax bands of personal tax at 12%, 25% and 35% instead of the current seven, with a recommended surcharge on the very wealthy.
On the corporate front, shares in Imperial Brands were in the red as the cigarette manufacturer confirmed it was in talks to help rescue UK tobacco supplier Palmer & Harvey, and said it expected to deliver strong growth in full year revenues and earnings at actual currency rates.
Tour operator Tui retreated after it reiterated guidance for at least 10% growth in underlying earnings for fiscal 2017, while shares in RPC Group climbed after the company said first-half revenue was anticipated to be well ahead of expectations.
CRH was the standout gainer, boosted by Trump's new tax plans, with analysts pointing out that it derives a large chunk of its revenue from the US. The building materials company was also lifted by a note from HSBC, which reiterated its 'buy' rating on all the global cement majors, saying it favours US-exposed stocks such as CRH.
Euromoney turned lower despite saying that overall trading since its last update has been in line.
Stagecoach was on the front foot after the transport operator reaffirmed its earnings expectations for the year, while SSP gained as it said it expects to see an 11.4% jump in full-year revenues.
Synthomer advanced following the acquisition of BASF's Austrian styrene butadiene rubber business for €30m.
In broker note action, RBS was hit by a downgrade to 'sell' at Investec, while TalkTalk fell as Credit Suisse cut the stock to 'underperform'.
HSBC cut its price target on Restaurant Group to 265p from 300p saying the company's interim update outlined "the long road ahead".
Balfour Beatty was boosted by an upgrade to 'buy' at Peel Hunt, while Cineworld gained after an upgrade to 'buy' at Panmure Gordon and UBM was upgraded by Barclays.
Hargreaves Lansdown, Kier Group, Hansteen and IG Group were all weaker as their stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,319.53 0.08%
FTSE 250 (MCX) 19,665.88 0.49%
techMARK (TASX) 3,457.64 0.38%
FTSE 100 - Risers
CRH (CRH) 2,784.00p 2.92%
Ferguson (FERG) 4,898.00p 2.79%
Rolls-Royce Holdings (RR.) 884.00p 2.61%
Ashtead Group (AHT) 1,803.00p 2.39%
InterContinental Hotels Group (IHG) 3,933.00p 2.21%
Smiths Group (SMIN) 1,568.00p 1.82%
Aviva (AV.) 509.50p 1.80%
Intertek Group (ITRK) 4,955.00p 1.70%
Smith & Nephew (SN.) 1,330.00p 1.68%
Berkeley Group Holdings (The) (BKG) 3,674.00p 1.66%
FTSE 100 - Fallers
Land Securities Group (LAND) 967.50p -6.44%
Imperial Brands (IMB) 3,172.00p -4.02%
easyJet (EZJ) 1,201.00p -1.80%
Carnival (CCL) 4,730.00p -1.72%
Burberry Group (BRBY) 1,733.00p -1.65%
Royal Bank of Scotland Group (RBS) 266.40p -1.62%
Micro Focus International (MCRO) 2,388.00p -1.61%
Vodafone Group (VOD) 205.25p -1.44%
Smurfit Kappa Group (SKG) 2,341.00p -1.18%
British American Tobacco (BATS) 4,650.00p -1.16%
FTSE 250 - Risers
SSP Group (SSPG) 530.50p 5.99%
Balfour Beatty (BBY) 271.90p 5.63%
Card Factory (CARD) 293.00p 5.21%
IP Group (IPO) 130.60p 4.40%
RPC Group (RPC) 978.00p 4.04%
Thomas Cook Group (TCG) 118.00p 3.69%
QinetiQ Group (QQ.) 233.40p 3.46%
Hunting (HTG) 484.00p 2.98%
Fidessa Group (FDSA) 2,235.00p 2.76%
IWG (IWG) 304.50p 2.70%
FTSE 250 - Fallers
Greencoat UK Wind (UKW) 121.30p -3.42%
Greene King (GNK) 549.00p -2.66%
Tullow Oil (TLW) 188.70p -2.53%
Ascential (ASCL) 347.00p -2.50%
International Public Partnerships Ltd. (INPP) 158.80p -2.46%
Polymetal International (POLY) 823.50p -2.20%
Restaurant Group (RTN) 297.70p -2.10%
Acacia Mining (ACA) 188.10p -1.98%
Rank Group (RNK) 213.90p -1.97%
Kier Group (KIE) 1,148.00p -1.88%