London close
The top-share index came close to notching up a three figure gain as hopes rose of a settlement in the interminable Greek debt negotiations.
Reports suggested that the latest Greek proposals could contain €12 billion in tax rises and spending cuts.
Analysts said creditors were likely to welcome the news, but noted that such reforms were greater than those rejected by Greek voters in last Sunday's referendum.
The International Monetary Fund (IMF) and the Federal Reserve backed debt restructuring for Athens, increasing pressure on other creditors to soften their stance.
The Bank of England (BoE) kept interest rates on hold at 0.5%, to no one’s great surprise.
Howard Archer at economic researchers IHS Global Insight said the Bank was unlikely to have hiked rates so soon after the government's Budget on Wednesday.
All but seven FTSE 100 stocks made headway, propelling the index 91 points higher to 6,594.
Primark owner Associated British Foods (LON:ABF) was the best performing blue-chip, hardening 150p to 3,080p, as its retail division reported strong European trading.
Barratt Developments (LON:BDEV) was 26p higher at 620.5p as it forecast a 45% rise in annual profits. That helped soften the blow of changes to tax relief for buy-to-let mortgage holders announced in yesterday’s budget, and house builders were, in any case, back in favour, with Taylor Wimpey (LON:TW.) and Persimmon (LON:PSN) up 4.84% and 4.2% respectively.
Further down the food chain, shares in 7digital (LON:7DIG) rose more than 12% on news that a switch in focus to technology licensing was resulting in higher margin earnings.
After Tuesday’s trading update, John Cronin, executive chairman of the wireless metering specialist Cyan (LON:CYAN), upped his stake in the company to 2.35%, with the purchase of 54.5mln shares at 0.1827p a throw.
Simon Smith, chief financial officer, bought 27.5mln shares at 0.189p a pop to raise his stake to 1.58%, and investors jumped on board with him, pushing the share price up 18.6%.
On the downside, Beowulf Mining (LON:BEM), the iron ore mine developer, saw its shares tumble 0.78p to 1.4p after the company issued shares at 1.25p each, raising £650,000 in the process.
US open
Happy days are here again for US markets, which rallied strongly after Wednesday’s shake-out.
The Dow Jones industrial average was up 178 points at 17,693 after just over half an hour of trading, while the benchmark S&P 500 was 20 points to the good at 2,067 and the tech-laced Nasdaq Composite was 59 points heavier at 4,968.
Shares in Alcoa were wanted after the aluminium firm topped estimates with its second quarter revenue of US$5.9bn yesterday.
Squeaky wheel fixer WD-40 was well off the pace, however, after its third quarter numbers, also announced yesterday, fell below expectations.
Stock markets operator NASDAQ OMX put on a spurt following yesterday’s technical glitch on the New York Stock Exchange (NYSE) , which is owned by NASDAQ’s rival, Intercontinental Exchange.
Computer problems caused the chaos on Wall Street which was forced to halt trading at around 11:30am, and remain offline for about three and a half hours, but trading on Nasdaq was unaffected, and carried on regardless.
With the price of crude oil recovering, energy firms such as Freeport McMoran and Chesapeake Energy were back in favour, but retailer L Brands was down in the dumps after it gave a sales outlook that failed to set analysts’ pulses racing.
Mid-session wrap
London shares extended their gains on Thursday as Greece appeared to soften its stance towards creditors to secure a debt deal.
The FTSE 100 Index rallied 84 points to 6575 as reports suggested that the latest Greek proposals could contain €12bn in tax rises and spending cuts.
Analysts said creditors were likely to welcome the news, but noted that such reforms were greater than those rejected by Greek voters in last Sunday's referendum.
Connor Campbell at spread-betting firm Spreadex said: "If the €12bn reform plan reports are true, it’s going to be a tough sell back at home."
The International Monetary Fund (IMF) and the Federal Reserve backed debt restructuring for Athens, increasing pressure on other creditors to soften their stance.
Analysts said sanguine US Fed minutes on Wednesday reassured markets that a US interest rate rise won’t be coming this year, citing Greece and China as ongoing cause for concern.
Although Wall Street closed in the red yesterday, Asian markets were positive on the Greek hopes and some stabilisation in China, which was buoyed by upbeat inflation data.
Back in London, the Bank of England (BoE) kept interest rates on hold at 0.5%. Economists said the move was unsurprising.
Howard Archer at economic researchers IHS Global Insight said the Bank was unlikely to have hiked rates so soon after the government's Budget on Wednesday.
He added: "Wariness over just what will happen with Greece and how badly the rest of the Eurozone could be hit, with potential knock-on effects for the UK, was also a very compelling reason for the BoE to sit tight."
Primark owner Associated British Foods (LON:ABF) was 96p tastier at 3,027p on strong European trading.
Gaming group Bwin.Party (LON:BPTY) ticked up 2.2p to 101.3p on news of a £900mln takeover offer from Sportingbet operator GVC Holdings.
Barratt Developments (LON:BDEV) was 9.5p higher at 604p as it forecast a 45% rise in annual profits.
Shares in 7digital (LON:7DIG) bounced 1.62p or more than 10% to 17p on news that a switch in focus to technology licensing was resulting in higher margin earnings.
Floor covering retailer Carpetright (LON:CPR) bristled up 4p to 576p as Shore Capital retail analyst Clive Black upped his 2015/16 profit forecasts.
News of the start of drilling of a hole at the Cascabel copper-gold project in northern Ecuador failed to impress investors in SolGold (LON:SOLG), whose shares fell 0.1p to 2.3p.
Infinis Energy (LON:INFI) sank 20.25p to 159.75p as the wind farm group forecast a profit hit from the Government's decision to discontinue the Climate Change Levy (CCL) exemption for renewable generators from next month.
Most followed
China Crisis was the name of a soft rock band in the eighties and the time may be right for a revival.
Despite Greece and Chancellor George Osborne competing for coverage, the volatile behaviour of the Chinese stock market is arguably the top story of the week.
After the effectiveness of new measures introduced at the weekend to shore up the stock market fizzled out after just one day, the regulators upped the ante and today the Shanghai Composite index notched up its biggest single-day percentage gain since 2009.
The index is still down by more than 30% since the middle of last month, however, and it fell 8.2% yesterday, prompting the authorities to ban any party that owns more than 5% of a company’s stock from selling that company’s shares any time in the next six months.
Beijing has also loosened up lending rules in the hope that people will borrow money so they can pump it into the stock market.
That would seem a counter-intuitive investment strategy in most stock markets – borrowing money so you can catch a falling knife – but they do things differently in China, and the government is certainly pulling out all the stops to stop markets doing what markets are supposed to do.
Around half of all companies have voluntarily suspended trading in their shares, which is another dodge many Western companies would like to adopt.
Closer to home, the post-match analysis of yesterday’s Budget from George Osborne is to the fore in the broadsheets.
“George Osborne slashes welfare but gives Britain a pay rise” is the Telegraph’s view, while The Scotsman reckons Osborne “shamelessly stole Labour’s clothes” in yesterday’s speech, which will surprise those who were unaware Labour still had any garments to purloin.
The FT, meanwhile, observes that Osborne has been accused of an insurance stealth tax. Gordon Brown, when he was chancellor, was the master at slipping in stealth tax rises to pay for headline-grabbing cuts in the basic tax rate until the newspapers got wise to him; this may be another example of Osborne stealing Labour’s clothes and it will be interesting to see whether predominantly pro-Tory Fleet Street takes him to task for it in the same way it did Brown.
One of the most bizarre questions is posed by the Spectator magazine: what does George Osborne have against the fertile, it asks, in response to the chancellor’ decision to limit state support to the first two children born to a couple.
The restrictions are not due to come in until 2017 so there is no need to leap into the cold shower yet, is the Spectator’s advice, which seems to overlook the fact that children have the annoying habit of remaining dependents for a long time.
On the company news front, house builder Barratt Developments (LON:BDEV) is on the up after it raised profits guidance.
Primark owner Associated British Foods (LON:ABF) can’t match that, but reassurance that full-year results will be in line with expectations has, in fact, been enough to see the shares outperform Barratt’s in the morning trading session.
Elsewhere on the high street, off licence operator Conviviality Retail (LON:CVR) has asked for trading in its shares to be suspended – and it is not even a Chinese company – after it confirmed it is in bid talks with privately-owned drinks distributor Matthew Clark.
If Matthew Clark does become part of the Bargain Booze group it would constitute a reverse takeover under AIM’s rules.
Conviviality Retail has only been listed since 31 July 2013; it floated at 100p and the shares were quoted at 155p before trading was suspended.
Finally, Kurdistan-focused oil producer Gulf Keystone Petroleum (LON:GKP) retains the ability to enthuse small cap investors.
Its operational update this morning ahead of the company’s annual general meeting has been well-received, with the company confirming it continues to produce at stable rates from both of its Shaikan facilities.
London pre-open
London’s FTSE 100 is expected to begin Thursday slightly higher.
Reading the form from other international markets is tough today, however, given that so few Chinese stocks were tradable and that Wall Street was basically at a standstill for most of Wednesday.
Computer problems caused the chaos on Wall Street which was forced to halt trading at around 11:30am, and remain offline for about three and a half hours.
It meant that thousands of American stocks, worth the best part of US$30 trillion, could not trade (at least not in the ordinary fashion).
A brief trading window was opened just before the close after the problem was fixed.
It coincided with a computer glitch at American Airlines which kept planes grounded.
Speculation and conspiracy theory was rife; investors and traders had little else to do after all.
Was it a cyber-attack? Could hacktivist group Anonymous to blame (or maybe Bane, Tom Hardy’s character in the Dark Knight Batman movie).
During the supposed ‘incident’ US Homeland Security and The White House denied there had been an attack, meanwhile the NYSE said an internal computer fault was to blame – a pragmatist may, however, consider whether that is in fact a more worrying proposition.
Wall Street’s main benchmarks all market reasonably big losses for the disjointed day.
The Dow Jones marked a 260 point, 1.47%, loss for Wednesday closing at 17,515 while the S&P 500 was down 1.67% at 2,046.
The Nasdaq, where trading was uninterrupted, though the benchmark fell1.75% to 4,909.
In Asia, Shanghai’s composite index rebounded more than 5% to 3,699 as a stock currently allowed to trade moved higher.
New Chinese intervention has meant falling stocks (they now have limits to the downside) are suspended from trading, and other measures meant that larger shareholders aren’t allowed to sell.
It comes after Chinese securities on average lost almost a third of their value over the past three weeks. Analyst guesstimates put the total Chinese losses in the order of US$4 trillion dollars of market capitalisation.
Much of this has gone un-noticed by a greater number of investors because Greece’s debt tragedy has until recently played something of a slight of hand trick, distract the attention of investors.
Nevertheless, in London this morning the market open is seen higher.
IG Markets is calling the FTSE 100 around 20 points higher at 6,505 to 6,509.