The FTSE 100 ended Tuesday’s trading session 48 points, 0.8%, higher at 6,083.
As the clock counts down to Christmas a festive exodus is already evident in the City, according to Chris Beauchamp, analyst at IG Markets.
“Even with two days to go until the Christmas holidays begin, it already feels like most traders have deserted the City of London,” he said.
Beauchamp says that the range-bound trading is made even more unbearable by the knowledge that tomorrow will bring more of the same.
“The index has held above the lows of yesterday’s session, but bullish sentiment is nowhere to be found,” the analyst added.
“The light volumes that prevail at this time of year make it easy to understand why such underperformers like Anglo American are enjoying a bounce today, but it is merely a passing fancy – normal service will be resumed in the new year.”
Santa rally loses its twinkle as Osborne gets a hangover
The London market's Santa rally lost some sparkle on Tuesday amid dismal news on the UK economy.
The FTSE 100 Index pared some of its gains to stand 27.4 points up at 6062 as public sector net borrowing figures came in worse than expected.
Borrowing excluding banking groups was £14.2bn in November, higher than the £12.9bn in November last year and expectations of £11.8bn.
Analysts said it would give Chancellor George Osborne a pre-Christmas hangover, suggesting it now looked near-impossible to meet forecasts for the tax year as a whole.
James Knightley at ING said: "While we have to acknowledge there does tend to be a lot of volatility in the month-to-month figures, the cumulative borrowing fiscal year-to-date suggests Osborne is going to struggle to hit his target."
But there was some seasonal cheer from research group GfK's consumer confidence index, which increased by a point to +2 in December, although that was below the +3 average for the year.
Joe Staton, head of market dynamics at GfK, said: "This is the first time since the consumer confidence barometer started in 1974 that the index has remained positive for an entire calendar year."
Commodity stocks provided some support after the Chinese government claimed its monetary policy needs to be both more ‘flexible’ and spending more ‘forceful’.
The oil price saw some short-covering after Brent crude hit a fresh 11-year low on Monday and before API oil inventories are reported later. The price of a barrel of Brent fell 0.1% to US$36.3.
Jasper Lawler at CMC Markets said: "Sentiment towards oil has got overly bearish in the past week on essentially no new information so there is some scope for a rebound, especially if inventories see a drawdown."
Back in the markets, G4S (LON:GFS) was 2.3p, or 1%, higher at 219.7p as vague rumours circulated that private equity firms and their banking advisors were taking a look at the security group.
A market source speculated about a potential 300p per share bid, adding: "That would still be below the price of the past but a big increase on what it is at the moment."
G4S sparked controversy at the 2012 Olympic Games by failing to provide enough security guards, which led to the departure of former chief executive Nick Buckles.
Subsequently it also faced problems over alleged over-charging on a UK government prisoner tagging contract.
In the last five years, the shares hit a high of about 313p in April 2013 but then slumped to a low of 207p in July that year.
The group dropped out of the blue-chip index in the latest quarterly shake-up. A G4S spokesman declined to comment on the private equity rumours.
Shares in African budget carrier Fastjet (LON:FJET) flew 7.2% lower to 43.75p after it forecast lower revenues in 2015 and 2016, although it remained confident about longer-term growth prospects.
Bahamas Petroleum (LON:BPC) spurted 34.3% to 1.8p on news that a bill set to guide the next phase of oil & gas exploration in the Caribbean islands had taken a step towards becoming law.
Natural language technology group Arria NLG (LON:NLG) jumped 8% to 32p as it announced a deal with business support services firm Genpact (NYSE:G).
Strategic Minerals (LON:SML) hardened 17% to 0.31p as it won permission to extend its rights to run magnetite operations at the Cobre mine in New Mexico until 2017.
PipeHawk (LON:PIP) shares soared nearly 36% to 4.75p after winning a £500,000-plus vehicle assembly contract from US automotive and industrial technology group Dana Holding Corp.
*Remember, Proactive is reporting the hot market topics being discussed by traders and bankers - it is not market fact. Neither is it an invitation to trade on the information.
LONDON OPEN
Investors were in festive mood on Tuesday as oil prices lifted on Chinese economic news and bid chatter gave G4S a gleam.
The FTSE 100 Index jingled 42.68 points to 6077.52 after the Chinese government claimed its monetary policy needs to be both more ‘flexible’ and spending more ‘forceful’.
After hitting 11-year lows on Monday, oil prices rallied somewhat, with Brent crude lifting 0.9% to US$36.68 and US light crude gaining 1.1% to US$36.22.
Although corporate news was thin on the ground, official figures showed UK public sector net borrowing excluding public sector banks increased by £1.3bn to £14.2bn in November 2015 compared with November 2014.
Capital Economics said it now looked almost impossible for Chancellor George Osborne to meet the Office for Budget Responsibility's forecast for the fiscal year as a whole.
But there was some seasonal cheer from research group GfK's consumer confidence index, which increased by a point to +2 in December, although that was below the +3 average for the year.
Joe Staton, head of market dynamics at GfK, said: "This is the first time since the consumer confidence barometer started in 1974 that the index has remained positive for an entire calendar year."
Back in the markets, G4S (LON:GFS) was 2.2p, or 1%, higher at 219.6p as vague rumours circulated that private equity firms and their banking advisors were taking a look at the security group.
A market source speculated about a potential 300p per share bid, adding: "That would still be below the price of the past but a big increase on what it is at the moment."
G4S sparked controversy at the 2012 Olympic Games by failing to provide enough security guards, which led to the departure of former chief executive Nick Buckles.
Subsequently it also faced problems over alleged over-charging on a UK government prisoner tagging contract.
In the last five years, the shares hit a high of about 313p in April 2013 but then slumped to a low of 207p in July that year.
The group dropped out of the blue-chip index in the latest quarterly shake-up. A G4S spokesman declined to comment on the private equity rumours.
Shares in African budget carrier Fastjet (LON:FJET) flew 7.7% lower to 43.5p after it forecast lower revenues in 2015 and 2016, although it remained confident about longer-term growth prospects.
Bahamas Petroleum (LON:BPC) spurted 23.1% to 1.65p on news that a bill set to guide the next phase of oil & gas exploration in the Caribbean islands had taken a step towards becoming law.
Natural language technology group Arria NLG (LON:NLG) jumped 8% to 32p as it announced a deal with business support services firm Genpact (NYSE:G).
MARKET PREVIEW
The FTSE 100 is called to start around 21 points higher today in what is again likely to be muted trading volumes.
The UK benchmark closed yesterday 17 points lower at 6,033, not least due to crude going to an 11-year low, and if there is Santa rally going on, it looks like no one has told the man in red.
Today, financial spreadbetters at IG Index are calling the Footsie to open around 21 points to the good, potentially taking the cue from the US where markets yesterday showed some strength.
The Dow Jones finished 123 points higher at 17,252, while the tech-heavy Nasdaq added 46 and the S&P500 gained 15 points.
A more upbeat tone today could be attributed to hopes that China is going to step up efforts to support growth. According to reports, the country’s leaders are looking at how to make monetary policy more ‘flexible’ and fiscal policy more ‘forceful’.
However, Michael Hewson, at CMC Markets, said: "While European markets were able to post gains last week, they still remain well below the levels that we saw at the beginning of the month which means any prospect of a Santa rally at this point is about as likely as getting a white Christmas."