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FTSE 100 shares extend gains as Wall Street rallies

Last updated: 17:40 13 Dec 2016 GMT, First published: 05:57 13 Dec 2016 GMT

Rolls Royce
  • FTSE 100 up 52 points to 6,942

  • Carpetright profits drop with consumer demand "uneven"

  • Bellway shrugs off Brexit concerns

  • Good Hunting? Not really, as deep-water and international drilling activity remains subdued

  •  mporium rises after inking agreement with a leading digital marketing agency

 

FTSE 100 shares extended gains in the second half of Tuesday to close comfortably up in tendem with record-breaking gains on Wall Street.

Although a US Fed rate hike is fully priced in, it didn’t stop the banking sector picking up as they are the biggest beneficiaries of the hike, the first in a year. The Dow, closing in on 20,000 level, and Nasdaq were the first tickers to post intraday record highs.

The FTSE 100 blue-chip closed up 1.1% at 6,968.

The index was boosted by a wide-ranging rally, with aero-engine maker Rolls-Royce (LON:RR.) the top gainer, followed by broadcaster ITV (LON:ITV), and fourth-placed airline group IAG (LON:IAG).

Rolls -Royce was up 4.2% at 678.5p while ITV advanced by 3.7% to 192.1p as stocks which had seen a rough year were seen as under-valued.

But expectations of a US interest rate hike pushed the price of metals lower, which hit mining shares. Top decliners were Antofagasta (LON:ANTO), down 4.7% to 738.5p, while and third-placed BHP Billiton (LON:BLT) was down 2.8% to 1361.5p. Others to decline included Anglo American (LON:AAL), Rio Tinto (LON:RIO), Glencore (LON:GLEN) and Fresnillo (LON:FRES).

Although a research note from Kantar Worldpanel saw grocer supermarket Tesco (LON:TSCO) grow its market share in the last three months while major rivals’ sales fell, the one-time dominant supermarket saw its share price fall, becoming the seocn-biggest of the session, by 3.8% to 204.85p.

In the mid-cap FTSE 250 which rose by 0.4% to 17,715, Greencore Group plc (LON:GNC) led the gains, up 4.7% to 245.4p.

On the downside, the top faller was Paysafe Group (LON:PAYS) which fell 17.6% to 306p, after it defended itself over allegations from Spotlight Research about the company’s ethics.

But the main sector of falls came from miners. Among those declining were KAZ Minerals plc (LON:KAZ), Evraz plc (LON:EVR) and Petra Diamonds Ltd (LON:PDL).

The FTSE AIM 100 Index closed up 0.2% at 3940 and the FTSE AIM All-Share Index was flat at 821.

London gainers outnumbered losers by 36% to 27%.


15:00 - FTSE 100 pushes higher with New York records

The FTSE 100 extended its gains as US stocks reached new record highs in early trading, with the Dow Jones moving closer to the key psychological level of 20,000.

New York stocks gained as energy companies continued their recent advance, with investors also focused on the start of a two-day meeting by the Federal Reserve that is widely expected to end with the announcement of higher interest rates tomorrow.

Craig Erlam, Senior Market Analyst at Oanda, said: “While a rate hike is almost entirely priced in, the Fed’s expectations for the year ahead will be key, with markets currently remaining quite cautious on further increases next year.”

In London, FTSE 250-listed digital payment systems firm Paysafe Group PLC (LON:PAYS) saw its shares drop sharply today which traders attributed to a negative report from a US short selling firm called Spotlight Research.

Responding to the report, Paysafe said it was aware of the Spotlight Research note and confirmed that “all material information in the report is either factually inaccurate or has been previously disclosed.”

The FTSE 250-listed company also pointed out that Spotlight “has disclosed a potential short interest benefiting from any weakness in Paysafe's share price.”

Having dropped by around 25% to a session low of 230.1p this morning, Paysafe shares rallied after its statement, but were still down almost 19%.

1.30pm … Near session highs

The Footsie held near session highs at lunchtime, hoisted back above the 6,000 level today on expectations for more records today on Wall Street ahead of an expected US interest rate hike tomorrow.

The pound was higher against both the US dollar and the euro after news that UK consumer price inflation reached its highest rate since October 2014 last month, up 1.2% year-on-year.

Connor Campbell, financial analyst at Spreadex, said: “Sterling’s reaction likely stems from the fact that, if inflation keeps rising as expected, the Bank of England may well be forced to raise rates at some point in 2017.”

Despite the positive overall performance, soft drinks bottler Coca-Cola HBC AG (LON:CCH) was a blue chip faller, shedding 1.7%, or 29p at 1,633p after Societe Generale cut its rating for the group to hold from buy.

And further down the market, Carpetright PLC (LON:CPR) shares fell 4.5%, or 9p to 191p after the carpets and floorcoverings retailer saw its first half  profits drop due to "uneven" consumer demand and an "increasingly competitive market."

11.15am .... Proxama punished

In the small caps, shares in the proximity marketing specialist Proxama PLC (LON:PROX) plummeted by more than a third after it published a downbeat trading statement.

It expects revenues to fall this year and to report an underlying loss of around £3.mln, while it added that the sale of its digital payments division will now not be completed this year.

The company needed the cash from the deal to cover its immediate and medium-term costs, so it has had to raise the money by issuing £1.8mln worth of convertible loan notes.

Elsewhere, data and services provider Getech Group PLC (LON:GTC) gained almost 10% after it gave a fairly bullish update on its outlook, despite the “uncertain” natural resources exploration market.

The firm enjoyed a solid end to 2016 as well allowing it to turn an overall profit before tax for the 12 months of £671,000, despite posting a loss before tax of more than £700,000 in the first half.

10.45am... Pokes above 6,900

The FTSE 100 has poked its head above the 6,900 level, despite miners acting as a drag on the index.

The Footsie was up 20 points at 6,910, with terrestrial TV outfit ITV PLC (LON:ITV) leading the way, as speculators wonder whether the company will be the next morsel media mogul Rupert Murdoch wolfs down, after he has gobbled up Sky.

ITV shares were up 4.1% at 192.7p, while Sky PLC (LON:SKY), where the independent directors are under fire for rolling over too easier once Murdoch came knocking, is up 15 at 982p.

Among the mid-caps, house builder Bellway PLC (LON:BWY) advanced 2.2% to 2,443p after an upbeat trading update that made light of concerns over the UK housing market in the wake of Britain’s vote to leave the EU.

Shore Capital analyst Robin Hardy called the update "positive but essentially in line."

In contrast, Hunting Plc (LON:HTG), the oilfield services provider, tumbled 6.3% to 591p after a pre-close trading statement that confirmed  the group's operations market conditions, particularly within deep-water and international drilling activities remain subdued, though it continued to see improving market indicators within US onshore activities.

Among the tiddlers, Mporium Group PLC (LON:MPM),  the mobile commerce specialist, inked an agreement with a leading digital marketing agency introduced by search giant Google, sending the shares 4.6% higher.

8.35am ... As flat as Essex ahead of tomorrow's Fed decision

The FTSE 100 opened a dull Tuesday session almost flat as it lost 2 points in the opening 30 minutes to trade at 6,888.

Inspiration was sadly lacking as traders sat on their hands ahead of Fed’s expected hike to base rates Wednesday, and with it commentary on the outlook for 2017.

The big faller was in the FTSE 250 as cyber security specialist NCC Group (LON:NCC)was hit by three contract cancellations.

The stock, down 40% in the year to date, fell a further 11% in early deals.

In the FTSE 100, Burberry PLC (LON:BRBY) (up 1.9%) was boosted after it waded into the market to acquire its own shares.

6.45am...Dull start predicted 

The FTSE 100 is set to mark time this morning, after a mixed showing on Wall Street overnight.

Spread betting quotes indicate the top-share index will start the day at around 6,892, up a couple of points from last night's close.

Inflation data is set to be released today, and economists are tipping that the Consumer Price Index annual inflation rate will have risen above the one percentage point level in November, to 1.1% from October's 0.9% reading.

That's still not a rate that is going to have anyone who lived through the early eighties lying awake at night, but economists will be keeping an eye on the producer prices input rate, which is expected to show a year-on-year rise of around 12.2%; sooner or later that will start to feed through on the consumer side.

Across the pond, the Dow Jones 30-share index managed a rise yesterday, advancing 40 points to 19,796 but the broader-based S&P 500 fell back almost three points to 2,257.

Heading into the final hour of trading, Asian markets were similarly mixed, with the Nikkei 225 in Tokyo 56 points to the good at 19,212 while Hong Kong's Hang Seng index was down 75 at 22,355.

With the Christmas period just over the horizon, corporate news flow is starting to dry up in the UK.
Carpetright PLC (LON:CPR), the floor coverings retailer, is probably the most interesting company set to announce figures today.

The company was set up by legendary retailer Phil Harris, now Baron Harris of Peckham, and in recent years has been feeling the hot breath of competition from Tapi Carpets, a supposedly "more aspirational" carpets seller, set up by Harris's son, Martin.

For the most part, investors know what to expect after the company gave a trading update at the end of October.

Like-for-like sales in the six months to 22 October were down almost 3% compared to the same period last year, while margins also declined as materials costs increased due to the weaker pound. Importantly for investors though, Carpetright was sure that its full-year profit expectations remained unchanged, so keep an eye out for this to be confirmed.

Peel Hunt reckons Carpetright might have done enough to nudge sales slightly above the broker's expectations, although they’ll still be around 5.5% off compared to last year’s figure.

“We forecast first half profit before tax of £5.7mln (2015: £9mln), reflecting gross margin declines of 200 base points, as Carpetright takes a more aggressive stance to competitor openings,” the broker said.

Around the markets

  • Oil: Brent crude was off 24 cents at US$52.59 a barrel.
  • Gold: The yellow metal was down US$2.60 at US$1,163.20 an ounce.
  • FX: Sterling shed 0.12 cents at US$1.2665.
  • Bonds: The yield on the 10-year gilt is 1.331%.

Headlines

  • Scotland’s economy still lags behind rest of the UK - The Times
  • DNA device creates biotech unicorn - The Times
  • Venezuela to remove most common banknote from circulation ‘to beat mafia' - The Independent
  • Brexit: Stock market listings collapse 60% in 2016 amid volatility and uncertainty - The Independent
  • Sky defends role of independent directors after Fox approach – Financial Times
  • Europe set to pare down its competition probe into London Stock Exchange merger – The Daily Telegraph
  • $1,570,000,000,000: how much the world spent on arms this year – The Daily Telegraph
  • Sky will cost Rupert Murdoch $2.5 billion less after Brexit vote – The Guardian
  • Trump’s tweet about Lockheed-Martin cuts $4 billion in value as share prices fall – The Guardian
  • Departing Mitie Boss who quit to see more of her children gets a £500,000 payoff – Daily Mail
  • Goldman Sachs banker Gary Cohn becomes Donald Trump’s main economic adviser – City AM

 

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