FTSE 100 shares ended Monday firmer, as bank stocks gained on the prospect of higher global interest rates.
The London market was also buoyed by the Dow Jones Industrial Average marking a fresh record high on Wall Street at 18,934, although as London was winding down the Dow also fell back.
The blue-chip ticker ended up 0.3% at 6,753 in London, led by banks Barclays (LON:BARC) and RBS (LON:RBS), up 5.23% to 212.3p and 4.37% to 210.4p respectively.
Banks gained, just like on Wall Street, as US Treasury yields kept moving higher on expectations for a fiscal spending boost under the new Donald Trump Administration, pulling interest rates across the globe up with them. Already the big money expects Fed rates to be hiked in December.
Another top-10 riser was housebuilder Taylor Wimpey (LON:TW.), which rose 3.1% to 150.1p after it said trading had been "strong" in the second half of the year.
Despite uncertainty after the Brexit vote, the market "has remained robust and trading has remained resilient".
Taylor Wimpey said it had sold on average 0.70 homes per outlet per week in the second half of the year, compared with 0.74 in the same period a year earlier.
Right behind TW in the league of risers was rival Persimmon plc (LON:PSN), up 3.1% to 1739p.
The mid-cap FTSE 250 made a more measured gain of 0.16% to 17,472 and led by Greencore Group plc (LON:GNC) up 9.5% to 319.7p after the Irish food company announced a jump in full-year revenue and earnings, a hike in its dividend and the proposed acquisition of US group Peacock Foods for an enterprise value of $747.5mln.
The FTSE AIM 100 Index ended up 0.4% at 3833 and the FTSE AIM All-Share Index closed up 0.2% at 802.
Gainers outweighed losers with 35% of London stocks rising and only 29% falling.
3.45pm...
Dow Jones up 47 points at 18,895
New record high for the index
US Treasuries taking a bath
FTSE 100 up 35 points
The Dow Jones hit a new record as US equity investors warmed to the President-elect Donald Trump, even if the bond market was less enamoured of the billionaire taking control of the world’s largest economy.
The sell-off hit US 10-year Treasuries worst with yields going over 2.2% - their highest since January.
Over on this side of the pond things were a little quieter - on the share market at least - with the FTSE 100 up 35 points to 6,765.15.
Tesco and Marks given boost
Banks in demand
FTSE 100 pares gains
Two of the biggest names of the UK retail scene enjoyed a rare day in the sun after what has been a bit of bloodbath for the sector.
Marks & Spencer PLC (LON:MKS) was up 3.5% in early afternoon trade after UBS upgraded the stock to ‘buy’ mainly on the grounds the current valuation more than discounts its recent High Street woes.
Tesco PLC (LON:TSCO), meanwhile, advanced 2.3% after HBSC followed the Swiss broker and became more upbeat on the grocer.
It now thinks the supermarket chain, which last month was embroiled in its ‘Marmitegate’ tussle with supplier Unilever, is more than equipped to deal with the threat posed by a revitalised ASDA.
“When we downgraded Tesco to hold we were clear this was due to a concern that Asda might undertake a major price repositioning,” said analyst David McCarthy.
“We were also clear that we saw Tesco as the long-term winner and we stand by our previous analysis on its significant underlying economic advantages.
“We still expect Asda to get more aggressive on price (what else can it do?) but the pace of the Tesco recovery is increasing, meaning it is better able to cope with whatever Asda does.”
His comments come ahead of a capital markets day for analysts and investors on Wednesday by Tesco.Outside the retail sector, the banks were also in demand as the FTSE 100 pared its earlier gains to trade just 20 points higher at 6,750.64.
11.15am,,,,
FTSE 100 up over 1% to 6,798
DCC still biggest gainer
Risk appetite strong after Trump win
FTSE 100 is still ahead mid-morning as global markets continue to mull Donald Trump's ascendency to being the leader of the most powerful nation on the planet.
FTSE 100 is up over 68, or 1.02% to stand at 6,798.
The big gainer is DCC (LON:DCC), up 4.72% to 6,320p as the support services giant said half year revenue rose.
The group also expects full year earnings to be “significantly” ahead of expectations.
Operating profits surged 33.3% to £117.8mln, the firm revealed.
Analyst Craig Erlam, at Oanda, noted that risk appetite remains strong at the start of the new week...
"It's still to be seen what Trump is going to prioritise once he gets into the White House in January and, possibly more importantly, what Congress will support him in doing, but it seems at least initially the focus will be on growth initiatives which is why markets are getting so carried away."
Marks & Spencer (LON:MKS) shares are up over 3% to 338p as it received some analyst attention with with UBS lifting its recommendation to ‘buy'.
Citi also upgraded to ‘buy’ on the stock saying it was now “more confident of the store plan”, though it also cited the firm’s free cash flow and dividend yields as underpinning its positive stance.
In small cap world, AFC Energy (LON:AFC) added almost 19% to 22p as the fuel cell specialist said it had successfully completed the development of its Generation 2 (Gen2) fuel cell system.
Windar Photonics (LON:WPHO) blew 19% higher to 104.5p as it continues up after a good run of recent news over the last couple of months.
The most recent piece of news that it had secured a repeat order for its WindEye LiDAR wind sensors from a large US utility company confirmed what followers of the stock have known for a while: Windar has a good, useful product.
10am - FTSE 100 75 points ahead
London’s FTSE 100 has held the morning’s early gains, up 75 points or 1.14% to around 6,805 at 10:00am on Monday.
The positive start to the week has been helped by blue-chip miners, outsourcers and even retail stocks.
Marks & Spencer was a notable early riser, up 3.7% on the same day that it has been upgraded in the City – with UBS lifting its recommendation to ‘buy’ – meanwhile as the sector prepares for (or start early) the ‘black Friday’ sales season the likes of Dixons Carphone Plc (LON:DC.) and Tesco Plc (LON:TSCO) were also in positive territory.
Attentions are also on foreign exchange, where the British pound is now rebounding.
“The pound received support last week in part on increased inflation expectations and may have received additional support on expectations that the UK and the US will continue to enjoy a “very special” relationship,” said Alexandra Russell-Oliver, analyst at Caxton FX.
Later today the focus will be on Prime Minister Theresa May, meanwhile over the pond Donald Trump’s first appointments will be closely watched also.
8:30 - DCC and miners push FTSE 100 higher
The FTSE 100 enjoyed a decent first half hour of trading after it clawed back the majority of the near-100 points it lost Friday.
The index of blue-chip shares was changing hands for 6,807.80 after climbing almost 78 points.
President-elect Donald Trump is, as he has been for the past week, the driver of sentiment. The hope currently among investors is he is slightly less nutty than a Snickers bar.
“Certain appointments (chief of staff, chief strategist) have proved more conventional than feared, while certain populist issues aren't being focused on so much,” said Mike van Dulken of Accendo Markets.
“Expectations of an infrastructure spending spree, fiscal stimulus and deregulation are, however, intensifying the bond market sell-off via hopes of growth, inflation and, more importantly, interest rate rises.”
DCC Plc (LON:DCC) led the FTSE 100 risers, up 8% after it posted better than expected interim results. The economic mood music out of China helped lift the miners, who were not far behind.
6.45am - rally predicted
The FTSE 100 is expected to claw back some of the ground lost in brutal session Friday with the spread betters predicting the index of blue-chip shares will rise 57 points on open to 6,787.43.
Overnight the Nikkei 225 was the standout performer with Japan’s benchmark up 1.7% in the wake of better than expected third-quarter GDP figures.
But across the rest of Asia the picture was mixed. The ASX and Hang Seng were off, while in Shanghai the market rose.
Donald Trump, never far from the headlines, gave probably the most comprehensive insight on his presidency in an interview with Lesley Stahl for CBS’ 60 Minutes.
The wide-ranging talk, which covered abortion, same-sex marriage and potential appointees to the Supreme Court, really failed to give any colour on his economic policies.
So in that sense, The Donald left the markets a little nonplussed.
All eyes will be on the US later after Wall Street enjoyed its best weekly performance in five years last week as it sailed serenely through the choppy waters caused by the American election.
“Whether this optimism can withstand the ongoing scrutiny leading up to next year’s official investiture is anybody’s guess,” said CMC Markets analyst Michael Hewson.
“However, bond markets already appear to be starting to price in the prospect of additional inflationary pressures, as US 10-year Treasuries posted their biggest weekly loss since early 2015, as traders scrambled to reprice the timing of potential future US rate rises.”
Back here in the UK, it looks set to be a busy week for corporate news with updates from Royal Mail, easyJet, Barratt Developments, Crest Nicholson, William Hill and Wimpey scheduled.
- Brent crude 5 cents higher at US$44.80 a barrel.
- Gold US$8.90 lower at US$1,215.40.
- Pound trading at US$1.2554.
City Headlines
- Rolls-Royce profits would have been more than £700mln lower last year if lucrative revenues from long-term service contracts had not been pulled forward, management is expected to tell shareholders this week – FT.
- The former high court judge who will oversee Royal Bank of Scotland’s compensation scheme for thousands of companies mistreated by its restructuring unit was misled by the bank in a court case over a business dispute – Times.
- National Grid is in talks about a voluntary deal aimed at staving off a forcible break-up – Times.
- With Donald Trump in the White House, the pharmaceutical sector could be set for a new era of mega-mergers – Telegraph.
- Sir Martin Sorrell’s advertising group, WPP, has called an end to the Brexit shock that has hammered the ad market since the EU referendum vote in June and upgraded its forecast for the industry – Guardian.