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FTSE 100 stocks end firm thanks to a claim from Direct Line

Last updated: 17:50 24 Nov 2016 GMT, First published: 06:54 24 Nov 2016 GMT

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FTSE 100 shares ended firmer on Thursday after a late recovery accompanied news from insurer Direct Line (LON:DLG).

The blue-chip FTSE 100 closed up 0.2% at 6,829 and led by Direct Line, up 2.8% at 358.3p after broker Morgan Stanley upgraded the stock to 'overweight' from 'equalweight' and lifted the price target to 465p from 414p.

The bank said Direct Line’s shift towards more own brands business and away from partnership business should lead to higher return on equity, greater customer retention and higher-quality earnings.

Meanwhile, the mid-cap FTSE 250 closed down 0.2% at 17,590, led by Countrywide (LON:CWD) which saw its shares dive 12.6% to 169.5p after it warned that its full-year profits were set to be at the low end of expectations.

The UK's largest estate agency said the number of transactions in the market was "significantly below" last year, with activity hit since the EU referendum and changes to stamp duty.

The stock also suffered on Wednesday in the wake of the Autumn Statement which banner letting fees.

Fellow mid-cap stock Domino's Pizza (), on the other hand, led the gainers, rising 3.2% to 340.5p after it said it planned to open an extra 400 stores in the UK.

The pizza delivery firm has pushed up its long-term target for the number of UK stores to 1,600 from 1,200.

For the small-caps the FTSE AIM 100 Index closed up 0.6% at 3930 while the FTSE AIM All-Share Index ended up 0.4% at 818.

Across the bourse in London 29% of stocks gained while 32% lost.


 

Late session
  • Blue-chip index flat 

  • Thomas Cook flying high 

  • Pound back above US$1.25

The FTSE 100 was range-bound mid-afternoon with traders seemingly taking a long lunch break faced with zero action out of Wall Street, which was closed for Thanksgiving.
 
At 3.50pm, the index of blue-chip shares was up 5.5 points at 6,823.21 and volumes behind that movement were, as you might expect, fairly thin.
 
“After flitting between red and green the Footsie now seems to have settled [almost] flat, meaning yet another day has passed without the index being able to substantially build on its
key level,” said Connor Campbell, analyst at Spreadex.
 
Among the mid-caps, Thomas Cook Group PLC (LON:TCG) topped of the risers on the back of an upgrade from Barclays, which applauded the travel group’s decision Wednesday
to reinstate the dividend.
 
Changing hands for 82p, Barclays thinks the stock is worth 90p.
 
Serving up a 3% gain was Domino’s Pizza, which has pushed its store target out to 1,600 from 1,200.
 
On AIM Sirius Mineral was down 6% after its £1bn fundraising was given the go ahead. Don’t let the slide fool you, investors are behind the company after it received 100% backing for the open offer portion of cash call.
 
The pound edged back above US$1.25.
  • FTSE 100 drops 9 points on quiet day

  • Estate agents suffer after letting fees ban

  • Pets at Home in the dog house despite beating expectations

 

It seems to be one of those days for the FTSE 100 today.

An initial jump up above yesterday’s close was soon followed by a slow descent in the red, albeit by not that much.

Truth be told, little has happened so far with the 0.15%, or 10 point, drop in the blue chip index reflecting that.

It currently sits at 6,807 after something of a rally – by today’s standards – shortly after lunch.

In terms of the movers and shakers, generally speaking, it wasn’t a good day for estate agents following the Chancellor’s Autumn Statement yesterday.

Philip Hammond announced plans to ban letting agents charge fees to tenants and instead make landlords pay them.

The move is designed to increase competition and reduce costs, potentially hitting agents’ profits.

One firm already anticipating to suffer was Belvoir Lettings PLC (LON:BLV), which came out and said gross profits could be affected by as much as 8%.

Its shares were down 6% on Thursday morning, while others including Foxtons Group PLC and M Winkworth PLC (LON:WINK) were also lower.

Countrywide PLC (LON:CWD) was the biggest loser in that sector after a profit warning, combined with the ban on fees, sent shares tumbling by more than 12%.

The only agent to come out through the morning with its reputation enhanced was Purplebricks Group PLC (LON:PURP), which added another 1% or so after saying that the Chancellor’s plans represented an opportunity and not a problem.

And finally, British ‘unicorn’ Skyscanner, the travel search business, has been bought out by China’s biggest online travel firm, Ctrp.

The deal values Edinburgh-based Skyscanner – which lets users compare prices from different travel sites when searching for flights and hotels – at around £1.4bn.

11.45am....FTSE 100 failing to gather momentum as it hovers in the red

The FTSE 100 went through the motions on Thursday morning, and had been on a slow descent since the get-go. Shortly before midday, it had dropped 18 points from its open to stand at 6,799.

Weatherly International plc (LON:WTI)  was the biggest riser in London on Thursday morning after an update on its two main projects was warmly received by investors.

It revealed that nameplate production at its Tschudi mine in Namibia had been re-attained two months earlier than expected, while it thinks it's found a way to generate some cash from its other Namibian copper mine, Otjihase.

It wasn't quite the day Pets at Home Group PLC (LON:PETS) had been hoping for though. It posted a near-10% increase in revenues for the first half of its 2017 financial year, but a warning about "softer trading" in recent weeks didn't seem to enthuse investors. Shares were down 8%.

8.45am...FTSE 100 becalmed as it declines to follow the Direct Line

The FTSE 100 got off to a rather sluggish start on low volumes as traders prepared for a slow day with the US capital markets closed for Thanksgiving.

At 8.45am, the index of blue-chip shares was trading just over 10 points lower at 6,807.17.

Some profit-taking among the miners saw Fresnillo (LON:FRES) and Randgold (LON:RRS) marked down in early deals.

Perhaps the Insurance Premium Tax hike in Chancellor Philip Hammond’s first Autumn Statement was not quite as steep as expected with Direct Line (LON:DLG) and Legal & General (LON:LGEN) featuring at the top of risers’ list.

The former also received backing from City heavyweight Morgan Stanley, which earlier told its clients it rated the shares ‘overweight’ with a price target of 465p – that’s more than a quid higher than the current price.

Most of the real action was occurring at the lower echelons on the market with three of AIM’s success stories gaining traction for their respective fundraisers.

Sirius Minerals (LON:SXX), Sound Energy (LON:SOU) and Motif Bio (LON:MFTB) appear to have strong backing from both private investors and institutions for their growth stories.

6.45am...Thanksgiving lull expected

It is Thanksgiving over in the United States and whilst here on this side of the pond it’s a pretty generic Thursday trading volumes will likely be lower.

Nonetheless it was another strong session for US markets which set further new highs before checking out for the Thanksgiving holiday.

The Dow Jones advanced another 60 points, 0.3%, to reach 19,083 while the S&P 500 moved just slightly higher, though the Nasdaq was only slightly higher.

Sentiments are less simple here in Europe, as CMC analyst Michael Hewson points out.

“This divergence between the almost irrational exuberance being displayed by investors towards US assets and the US dollar is in stark contrast to the reluctance to push money into European stocks, which is more than likely being driven over ongoing concerns about a procession of political worries, starting with next month’s Italian referendum on the 4th December,” he said in a note.

“With elections also due next year in the Netherlands, France and Germany, it is hard to see where the impulse will come from to encourage a reversal of this reluctance, no matter how enticing some of the valuations might be.”

In Asia, Japan’s Nikkei was up 170 points, 0.94%, while most other indices were pointing lower.

Hong Kong’s Hang Seng was 0.29% lower at 22,615 while the Shanghai Composite dipped 0.24% to 3,234.

Australia’s ASX 200 was just a nudge higher at 5,485.

In London, the FTSE 100 is seen slightly lower too. IG Markets sees the benchmark just a point lower  calling it at 6,815 to 6,819 about an hour before the open.

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