FTSE 100 stocks closed higher on Wednesday after fashion house Burberry bounced back.
The FTSE 100 index of blue-chip stocks closed up 0.3% at 7021 and was led higher by Burberry Group (LON:BRBY) up 4.2% to 1462p rebounding from the previous session’s sharp falls on dubious quality earnings and after announcing on Wednesday a share buyback was conducted the previous day.
Housebuilder Persimmon (LON:PSN) was second top riser, up 3.3% to 1778p and unfazed by what was happening elsewhere in its sector this session.
Building merchants Travis Perkins (LON:TPK) issued a profit warning. The owner of retail outlets Wickes also said it would be closing 30 stores as part of its fight back strategy. Travis shares led the losers, down 4.4% to 1422p.
The midcap FTSE 250 advanced by 0.3% to 18,040, reclaiming the 18,000 levels that it briefly re-took in July after the Brexit vote fallout in markets.
The top riser was Computacenter plc (LON:CCC) up 5.3% to 743 after rallied as broker UBS upgraded its stance on the stock to 'buy' from 'neutral' and upped the price target to 840p from 795p.
The second top-riser was, again, a housebuilder. Crest Nicholson Holdings plc (LON:CRST) rose by 5.2% to 429p.
The FTSE AIM 100 Index advanced by 0.6% to 3,975 and the FTSE AIM All-Share Index was up 0.4% to 826.
But things were finely balanced in terms of London’s winners )33%) to London’s losers (31%) overall.
Top overall riser was Medilink (LON:MEDI), up 33% to 0.5p on no fresh news while the top decliner was Laird (LON:LRD) which sank 48% to 158.4p after the wireless components company issued a profit warning, saying a slow mobile phone market would ramp up its costs.
In other developments, the British government pledged to allow high-skilled migrants, including those who work in financial services, to move freely into the UK economy following its decision to leave the EU.
Repeating his reassurances about protecting bankers and City workers ability to work in the UK after the referendum, chancellor Philip Hammond said restricting high-skilled migration was “not where the problem lies”.
Hammond also insisted that it was not a foregone conclusion that passporting – the process under which all European nations abide by the same rules on financial products – would be withdrawn if Britain leaves the European Union. For one thing, it would not only make it harder for Britain to sell financial products into mainland Europe. It would also make it harder for Europeans to sell back into the UK, still one of the world’s biggest economies.
He furthermore pledged to defend the independence of the Bank of England after premier Theresa May last week threatened to remove independence from the central bank if it didn’t raise interest rates.
Late session
- FTSE 100 rebounds
- Market buoyed by Hammond comments
- Pound on the up
- Oil and gold prices higher
Having spent most of the day in the doldrums, the FTSE 100 spiked above 7,000 late afternoon.
The catalyst? Assurances by Philip Hammond to the Treasury Select Committee the UK’s financial services industry would be a “very high priority” in Brexit talks.
“We should not concede that continued passporting is impossible,” the Chancellor said.
Passporting allows EU financial services to operate under a single set of rules. Its withdrawal could diminish London’s role in banking and finance.
At 3.45pm, the FTSE 100 was up 20.57 points at 7,020. Hammond’s appearance in front of the committee and comments to it also helped lift the pound above US$1.23.
Barclays (LON:BARC) was among the risers, although retailers were at the very vanguard.
On the rebound was Burberry (LON:BRBY), which was up 4%, having recovered some of the ground lost yesterday after a rather lacklustre trading update.
Just behind it was Tesco (LON:TSCO), which made its first market share gain in five year, Morrisons (LON:MW) and Next (LON:NXT).
Builder’s merchant Travis Perkins (LON:TPK) led the fallers after sounding the earnings alert.
Laird (LON:LARD), maker of bits for the iPhone, was the day’s biggest casualty, falling 47% after being hit by a downturn in demand from customers, including Apple.
The weaker dollar continued to underpin the gold price, which was up US8.50 at US$1,269.
Brent crude enjoyed another strong day, up US$1.37 at US$53.05, as traders continued to bet on an OPEC cut to supplies.
Update at 11.45am
The FTSE recaptured some of its earlier losses as it headed towards midday but still couldn’t quite breach the 7,000 mark.
At 11.45am, the index was down 10 points for the day to 6,990.
Travis Perkins PLC (LON:TPK) was one of the notable fallers in London on Wednesday.
The builders’ merchant said it is closing 30 branches and cutting 600 jobs, while profits will be lower than expected this year due to weak sales in its plumbing and heating division.
At the other end of the spectrum, Hotel Chocolat Group PLC (LON:HOTC) saw its share price rise by 4% after it posted a solid set of maiden results for the year to June.
Update at 11am
FTSE 100 still below 7,000
Pound dips below US$1.23
Jobless total up marginally
China GDP figures treated with suspicion
Travis sounds the earnings alert
The FTSE 100 was rudderless and stranded below 7,000 amid with little in the way of news to sway sentiment.
At 11am the index of blue-chip shares was off 10.11 points 6,898.95.
Official figures revealed the numbers out of work rose by 10,000 – which was hardly the post-Brexit economic kicking the ‘remain’ camp had predicted.
Some unexpectedly decent numbers from China, which showed GDP grew by 6.7% in the third-quarter, were being treated with suspicion by some in the Square Mile.
“The takeaway from the data is that government stimulus and credit expansion has stabilised growth,” said Jasper Lawler, analyst at CMC Markets.
“A potential problem looking forward is that China’s stable growth has come at the cost of a ballooning housing market.
“The government will likely need to change policy to deflate house prices in the coming months before it becomes a risk to financial stability.”
Resource stocks sensitive to the ups and downs of the People’s Republic were in demand.
Randgold (LON:RRS) led the way, followed by Anglo American (LON:AAL) and Fresnillo (LON:FRES).
A warning by Travis Perkins (LON:TPK) sent the share price tumbling 7% and brought fellow builders’ merchant Wolseley (LON:WOS) with it.
8.30am...Cabinet in-fighting
The FTSE 100 opened in negative territory and below 7,000, haunted by renewed Brexit fears.
The index of blue-chip shares shed almost 19 points to trade at 6,981.41 at 8.30am amid reports of tension between key ‘leavers’ on one side and the Chancellor, Philip Hammond, on the other.
Reckitt Benckiser (LON:RB., after a lacklustre third-quarter update, was among the morning’s biggest losers as it shed 3% of its market value.
It was sandwiched by the building materials firms Travis Perkins (LON:TPK) and Wolseley (LON:WOS). The latter was pulled lower by the former, which sounded the earnings alarm.
After a day to forget on Tuesday, in the wake of its most recent trading update, fashion retailer Burberry (LON:BRBY) topped the risers’ list.
6.58am....Spread betters predict Footsie will open higher
London’s blue chips are set for a decent start after good gains overnight in the US and in most of the Asian markets.
Financial spread betters see FTSE 100 adding at least ten points from Tuesday’s close of 7,000 dead.
Shares yesterday rose despite an uptick in inflation and mixed messages on Brexit from several big names.
US shares were strong with oil plays helping the Dow Jones Industrial Average finish the day 75 points higher at 18,161 with Nasdaq and the S&P 500 also going well.
Results helped the mood in New York with Goldman Sachs, Yahoo and Visa all performing better than expected.
In Asia, Tokyo and Shanghai eked out small gains while Hong King dipped a touch.
Commodities/Currencies
Oil US$50.75 up US$0.46
Gold US$1,262 down US$0.5
$/£ - 1.228
Today's headlines
The Chinese economy expanded at an annual rate of 6.7 per cent in the third quarter, putting it firmly on track to meet the government’s full-year target of at least 6.5 per cent growth, reports the FT. Plans to let pensioners sell their retirement annuities have been scrapped by the government after concerns about whether consumers would have received good value for money. FT The pound is “not yet cheap”, despite falling almost 15% against the currency basket since Britain’s vote to leave the European Union, Goldman Sachs has claimed, reports the Times. Sir Philip Green has launched an audacious defence of his reputation by claiming that he wanted to “correct” Prime Minister Theresa May following her thinly veiled attack on the retail tycoon, writes the Telegraph. National Grid is to be guaranteed a minimum of £1.3bn income for building the world's longest sUBSea power cable to import electricity from Norway, te Telegraph writes. Yahoo posted an increase in third-quarter profit and said usage of its email product has increased slightly since disclosing a massive data breach that was announced last month reports the Wall Street Journal.