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FTSE 100 stocks edge higher as bank stocks brush off ECB policy

Last updated: 17:30 20 Oct 2016 BST, First published: 09:25 20 Oct 2016 BST

Mario Draghi

FTSE 100 stocks edged higher on Thursday led by bank stocks, even as their euro zone cousins counted the cost of continued low interest rates signalled by the European Central Bank.

The euro dropped back down to a loss for the day as ECB president Mario Draghi made it clear that low rates and quantitative easing will not be stopping any time soon – dashing expectations from some analysts that he might indicate how he would turn off the taps on easy money which was due to expire in March 2017.

The blue-chip FTSE 100 ended up 0.07% at 7,026.

Banks fared especially well, with Royal Bank of Scotland Group plc (LON:RBS) leading the pack with a 3.5% gain to 186.3p, followed immediately by Barclays (LON:BA.C) up 3.2% at 183.1p and Standard Chartered (LON:STAN) up 2% to 699.2p.

The fourth spot was taken by British Airways’ owner International Consolidated Airlines Group (LON:IAG) up 2% to 400.9p as the airline sector benefited after German rival Lufthansa said bookings were better than expected in September.

Deutsche Bank said the ad-hoc statement from Lufthansa was "substantially better" than expected.

EasyJet (LON:EZJ) gained 0.9% to 934.5p.

The bourse itself had a day in the sun. Shares in the London Stock Exchange (LON:LSE) were up 1% at 2842p after it reported a 19% rise in third-quarter total income, helped by growth in all its businesses.

But the mid-cap FTSE 250 index bled 0.5% to 17,945 – giving back the 18000 mark it had regained on Wednesday.

The biggest faller among mid-caps was NCC Group warned profits growth will be hit by "a number of setbacks" in its core IT assurance division that included the cancellation of three large contracts, the deferral of another and delays with renewals of some contracts in managed services.

The FTSE 250-listed cyber security and risk mitigation group said its profit expectations for the full year remained in line. NCC shares were off 35.5% to 223p.

Engineering group Keller (LON:KLR) was the second-biggest decliner among mid-caps, slumping 27% to 644.5p after it warned that profits would be around 15% below market expectations. It said trading conditions in Asia were difficult and losses were mounting.

Small-caps ended flat. The FTSE AIM 100 Index ended where it began, at 3976, while the FTSE AIM All-Share Index ended up 0.1% to 827.


Late session

Subdued retail sales figures and a lack of tangible guidance from the European Central Bank’s ‘not-so-super’ Mario Draghi made for a rather listless afternoon session on the equity markets.

At 3pm, the FTSE 100 was barely changed at 7,022.23 with traders minds’ probably more focused on the traditional Thursday City drink-up than the dealing screens.

The airlines were high-flyers after some optimistic and upbeat comments from the German carrier Lufthansa lifted spirits. Media stocks, by contrast, took a bit of a biffing.

It was a more difficult day for the FTSE 250, which fell 61 points to 17,979. It was dragged lower by profit warnings from three of its leading lights.

Metal bashers Keller (LON:KLR) and Senior (LON:SNR) fell 23% and 11% respectively, while security firm NCC Group (LON:NCC) tumbled 36%.

Update at 11.30am…FTSE picks up

The FTSE 100 recovered all of this morning’s earlier losses and even managed to add some as it neared the day’s halfway point.

At 11.30am, the blue chip index was up a couple of points on yesterday’s close to 7,024.

Georgian Mining Corporation (LON:GEO) was one of the biggest movers in London today, up 29% after it found more near-surface gold and copper at its Kvemo Bolnisi project.

Keller Group PLC (LON:KLR) didn’t fare so well, blaming poor market conditions in Asia as it warned on full-year profits which sent the stock tumbling by 27%.

On the main index, International Consolidated Airlines Group (LON:IAG) was the morning’s big winner, adding 3% to trade at 404p.

ITV PLC (LON:ITV) on the other hand, gave up most of this week’s gains as it fell back more than 3% to 174p.

9.35am...Traders can't make their minds up

Early trading was indecisive, with the top-share index little changed as investors try to get to grips with the US presidential debate.

There was a surprisingly large amount of discussion of policy in last night’s debate, which made it a bit of a throwback to … well, just about every other presidential debate before Donald Trump arrived on the scene.

“By now Hilary Clinton winning a debate, or taking another lead in the polls, doesn’t mean much to the markets given the relative freefall Donald Trump’s campaign has been in for most of October. Without any election-inspired movement, then, the markets had little to go on this morning,” noted Connor Campbell at spread betting firm Spreadex.

Investors are sitting on their hands ahead of this afternoon’s meeting of the policy-makers at the European Central Bank.

At 9.30am, the FTSE 100 was down 11 points at 7,011.

Airlines attempted to put some wind beneath Footsie’s wings, with British Airways owner International Consolidated Airlns Grp (LON:IAG) up 3% and easyJet PLC (LON:EZJ) 2% to the good.

Aerospace plays BAE Systems PLC (LON:BA.) and Rolls-Royce Holdings PLC (LON:RR.), however, were friendless, with the former off 2.1% and the latter off 1.8%.

Among the small caps, resurgent software firm Lombard Risk Management plc (LON:LRM) surged 17% higher to 8.5p on the back of record revenues in the first half of the financial year.

The company, which provides software and support to the financial services sector, said it had seen no impact on its business from the Brexit vote decision.

Private & Commercial Finance Group plc (LON:PCF), up 10.2%, was another company unworried by Brexit concerns.

The niche lender said the EU referendum result in June had not affected trading and it expects final results to September 30 to beat market expectations.

Drug development company Redx Pharma Plc (LON:REDX) was in the blue, up 6.8%, after it revealed it has identified a drug development candidate for its reversible Bruton's tyrosine kinase inhibitor programme.

Specialist engineer Hayward Tyler (LON:HAYT) has been a solid performer over the last few years, despite the slump suffered in one of its key markets – the oil & gas sector – but it appears to have hit a bump in the road.

The shares shed 10% as the company said sales in the half year to September were £22.5mln (£21.8mln), which will mean an operating loss of £5.5mln.

Shareholders might want to keep the faith, however, as the company said it remained confident of meeting revenue forecasts for the whole year, as orders have picked up recently.

8.35am...Investors go into their shell

Investors went into their shell a little after the US presidential debate as the FTSE 100 drifted 13 points to 7,008.84 in the first half hour of trade.

Builders’ merchant Travis Perkins (LON:TPK) continued its slide after sounding the earnings alarm on Wednesday. The media and building stocks were also under pressure early on.

British Airways owner International Consolidated Airlines (LON:IAG) and easyJet (LON:EZJ) were the Footsie’s main early gainers.

 

NCC Group (LON:NCC), Keller (LO:KLR) and Senior (LON:SNR) made for dire reading and knocked 30%, 23% and 20% from the respective market values. 

6.30am...Modest gain predicted

London’s FTSE 100 is set to open slightly higher on Thursday, and the early focus is on the US presidential election

In a year of political unpredictability many will still have foreseen the broad strokes of the final debate between Hillary Clinton and Donald Trump. Mainstream consensus says Clinton ‘won’ the televised exchanges, but it is the undecided and those in America's 'swing states' that now matter.

Wall Street closed steady, and slightly higher, before the candidates took to the stage.

The Dow Jones closed at 18,202, up 40 points (0.2%), while the S&P 500 also notched up 0.2% to 2,144. The Nasdaq edged 0.05% higher to end Wednesday’s trading at 5,246.

Expectations are quite clear based on election poll data, but who can really trust that anymore.

“Never in the history of the United State of America has a candidate faced such a deficit in the polls as Trump currently holds, with at least two well-known sites (that model the probability of the outcome) putting an 85-90% chance of a Clinton win,” said Chris Weston, analyst at IG Markets.

“There is even a view that if Trump does get up from here it would have been down to a systematic error in the polling, as literally every poll has shown such a lead for Clinton.

“But as 2016 has shown us, not just in politics, but in markets too, it can often pay to expect the unexpected.”

Elsewhere, in Asia, Japan’s Nikkei rose just over 1% to 17,181 while Hong Kong’s Hang Seng gained 0.6% to 23,448.

The Shanghai composite was down slightly, at 3,081.

Australia’s ASX 200 added a smidgen, up 0.12% to 5,442.

At nearly 6:30 am in London, IG Markets called the FTSE 100 2.5 points higher at 7,020 to 7,024.

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