FTSE 100 hits intraday and closing record highs
FTSE 250 hits intraday record high
Smallcaps mark record high
FTSE 100 stocks ended solidly higher on Thursday after chalking a fresh record high as investors reacted to a tempered rate hike outlook in the US and relief at the defeat of the anti-immigration Freedom party in the Dutch election.
The Fed hikes rates by 25 basis points to 0.75%-1.0%, as expected, but also kept its plans intact for no more than two additional rate hikes in 2017. Some analysts had feared it might add a further one. That means that the Fed plans to cap rates at no higher than 1.5% in 2017.
Meanwhile, sterling hit a two-week dollar high of $1.2373, up 0.6%, after the latest interest rate decision from the Bank of England.
Interest rates were kept on hold at 0.25% as expected, but minutes of the meeting showed that one policymaker had voted for a rate rise, the first time since July last year that the vote had not been unanimous.
The minutes also indicated some other committee members might be close to voting for a rate rise.
Buoying markets was news that the enabling legislation for the UK government to trigger Article 50 to take Britain out of the European Union gained Royal Assent on Thursday. Premier Theresa May has pledged to trigger Article 50 by the end of March.
The benchmark FTSE 100 rose 47.31 points, or 0.6%, to a record closing high of 7,415.57. It also marked a fresh intraday record high of 7,444.62, achieved before mid-session.
The top six risers on the blue-chip index were miners, led by Anglo-American (LON:AAL) up 8.6% to 1297.5p and Glencore (LON:GLEN) up 5% to 341.4p. The next in line were Antofagasta (LON:ANTO) up 4.7%, Fresnillo (LON:FRES) up 3.9%, Rio Tinto (LON:RIO) up 3.2% and BHP Billiton (LON:BLT) up 2.6% to 1317.5p.
The mid-cap FTSE 250 closed up 0.3% at 19,027 and led by miners too, topped by KAZ Minerals (LON:KAZ) up 8.9% to 524p. Intraday it marked 7,444, a fresh record high.
Smallcaps made some of their strongest gains in months, as the FTSE AIM 100 Index closed up 1% at 4519 – and hit a fresh intraday record high of 4533.
The FTSE AIM All-Share Index rose 0.7% to 925.
London gainers were 36% and the losers in a minority of 30%.
1520 GMT - FTSE 100 set for record high close as miners muck in
FTSE 100 up 38 points to 7,407
Bank of England keeps interest rates on hold, but hawkish commentary boosts sterling
CMA and Ofcom to investigate Fox's proposed takeover of Sky
Greenback-denominated commodities in demand on weaker dollar, as are miners
The FTSE 100 is on track to beat its record high close after enjoying a day of strong gains.
The blue chip index is currently up 38 points to 7,407, well ahead of the previous record of 7,383 it reached at the very start of this month.
Much of the gains today have come from the miners, which have rallied on stronger commodity prices thanks to a weaker dollar.
Fresnillo PLC (LON:FRES) (up 4% to 15.20), BHP Billiton plc (LON:BLT) (up 3% to £13.23), Antofagasta PLC (LON:ANTO) (up 3.3% to £8.33) and Glencore PLC (LON:GLEN) (up 4.5% to £3.40) all zipped higher today.
Anglo American PLC (LON:AAL) was the main riser both in the mining sector and on the FTSE 100 though, after Indian billionaire Anil Agarwal revealed he intends take a 12% stake worth more than £2bn.
Shares in Anglo were up 8% to £12.90 over the course of the day.
Market sentiment was also buoyed by the victory of Mark Rutte in the Dutch elections who saw off (quite comfortably) ‘Nethexiteer’ Geert Wilders.
“That most Dutch voters rebuked the siren songs of the populists may help a little,” said Berenberg’s Holger Schmieding.
“If Wilders had won, an avalanche of reports proclaiming an irresistible rise of anti-EU populists could have added a little momentum to Marine Le Pen's campaign in France.
“But the impact is probably small. Whereas the Dutch result should help to ease market anxiety about France and Italy a little further, it does not tell us much about how politics will go in other countries.”
Like the Footsie, the pound has been on a run today too. Although it got off to a slow start, it picked up as the day wore on to sit at €1.151 and US$1.236 against the euro and US dollar respectively.
The reason for the surge was down to surprisingly hawkish comments from the Bank of England with regards to interest rates.
As expected, the bank opted to keep interest rates on hold at 0.25%, but the minutes of the meeting showed that one policymaker voted to raise rates while others were open to the idea as well.
That really wasn’t expected, with analysts calling the decision a “complete surprise”.
At the other end of the spectrum, Alton Towers owner Merlin Entertainments PLC (LON:MERL) has been on the slide for most of the day after German finance house Berenberg downgraded the stock to a ‘sell’.
The bank argues that while Merlin’s record of delivery warrants shareholders showing some patience, that patience is now wearing thin following recent results.
“We feel that Merlin is potentially one misstep away from triggering a material de-rating,” Berenberg said, as it abandoned its neutral position on the Thorpe Park and Legoland owner and cut its price target to 375p from 440p.
Shares in Merlin slipped more than 3% to 481p, making it the biggest faller on the FTSE 100.
Sticking with the German theme, Germany’s finance minister Wolfgang Schauble has given a boost to the UK as Theresa May prepares to trigger Article 50 in the coming weeks.
Speaking in Frankfurt ahead of the G20 meeting tomorrow, Schauble said: “I am convinced that Europe as a whole – and I’m not sure this will be very beloved in Paris – it’s in our own interests to have a strong financial centre in London.”
The minister added that it’s not feasible to move all of the City’s operations, although he did say it’s not been easy to “brainstorm” with his British counterparts.
After his cock-up with last week’s Budget, and more specifically the proposals to increase National Insurance contributions, it would be easy for the Prime Minister to throw Philip Hammond under the bus.
As it is, Theresa May has channelled her inner George Michael and has given her full backing to the Chancellor.
"I have absolute faith in the chancellor" @theresa_may tells me, when I ask how damaged he is by plan to raise NI in breach of pledge
— Robert Peston (@Peston) March 16, 2017
Staying in the weird world that is the Twittersphere, McDonald’s Corporation (NYSE:MCD) were the talk of social media after it posted a tweet criticising President Trump.
The tweet in question, which was later removed, was posted just after 6am in the US. Maccy’s shifted the blame elsewhere, saying its account had been “compromised”.
at first i thought this was your classic "employee mistakenly tweets from corporate account" scenario. then McDonalds pinned the tweet pic.twitter.com/B9qj9HzXnm
— Nate Goldman (@NateGoldman) March 16, 2017
Elsewhere, culture secretary Karen Bradley has asked Ofcom and the Competition and Markets Authority to investigate 21st Century Fox’s proposed takeover of Sky PLC (LON:SKY).
The American media giant has made an offer of almost £12bn to buy the remaining 61% of Sky it doesn’t already own, but Bradley still has concerns despite holding talks with Fox.
1pm...FTSE 100 eases as pound spikes; Ofcom to investigate Fox’s takeover bid
The FTSE 100 was still in record-breaking territory early this afternoon and is on track to break the previous high close of 7,382.9 which it hit on 1 March.
Despite a little fall-back from this morning’s highs, the blue chip index was still 42 points higher at 7,411.
The slight fall came as the pound picked up sharply to reverse today’s earlier losses, with sterling now up to €1.153 and US$1.237 against the euro and US dollar respectively.
The reason for the surge was down to surprisingly hawkish comments from the Bank of England with regards to interest rates.
As expected, the bank opted to keep interest rates on hold at 0.25%, but the minutes of the meeting showed that one policymaker voted to raise rates while others were open to the idea as well.
The minutes stated: “…with inflation rising sharply, and only mixed evidence on slowing activity domestically, some members noted that it would take relatively little further upside news on the prospects for activity or inflation for the to consider that a more immediate reduction in policy support might be warranted.”
ETX Capital analyst Neil Wilson said the news was a “genuine surprise”.
“The minutes paint a picture of a committee moving a lot closer to hiking rates than markets had realised.
“While we knew the bank had raised all its forecasts for growth, we didn’t think it is apparently so close to raising rates.”
Leading the FTSE 100 to its record highs today have been the miners, which have been helped out by the weaker dollar.
Glencore PLC (LON:GLEN) built on its recent gains following a bullish Goldman Sachs note earlier in the week, while Antofagasta PLC (LON:ANTO), BHP Billiton plc (LON:BLT) and Fresnillo PLC (LON:FRES) also posted gains of between 4% and 6%.
Anglo American PLC (LON:AAL) was still by far the star performer among the blue chips, up almost 9%.
The company was buoyed not only by the weaker dollar but also by the news that Indian billionaire Anil Agarwal is set to spend £2bn taking a stake in the miner.
In the small caps, Nyota Minerals Limited’s (LON:NYO) planned acquisition of Bigdish Ventures has fallen through, prompting a 34% slump in the share price to 0.03p.
Intended to be a reverse takeover of Aussie-listed Bigdish, costs of listing both on AIM and the ASX were deemed to be too high.
Bigdish plans to seek a standard listing on the LSE instead, while Nyota will be issued with £200,000 worth of shares in the privileged dining card service operator to replace a loan currently.
Engineer 600 Group PLC (LON:SIXH) was another on the ropes after a deal fell through for the chairman’s 22.5% stake to be sold to private equity group Disruptive Capital.
Paul Dupee’s vehicle Haddeo had granted an option in January to Disruptive to buy the stake for a premium price.
Today, 600 said talks had ended and the conditional agreement has lapsed, sending 600 shares down 17% to 11.5p.
Away from the markets, culture secretary Karen Bradley has asked Ofcom and the Competition and Markets Authority to investigate 21st Century Fox’s proposed takeover of Sky PLC (LON:SKY).
The American media giant has made an offer of almost £12bn to buy the remaining 61% of Sky it doesn’t already own.
Bradley’s two main concerns are whether the tie-up leaves sufficient “plurality of persons with control of the media enterprises serving audiences in the UK” and whether they had a “genuine commitment to attaining broadcasting standards objectives”.
Ofcom and the CMA have until 16 May to prepare their reports, and Fox said it was “confident” the buyout would be approved.
10.05am...FTSE 100 hits record highs; boosted by miners’ surge and Dutch elections relief
The FTSE 100 hit record intraday highs on Thursday morning, breaking above the 7,400 mark for the first time.
The blue chip index is currently up the best part of 1%, or 67 points, to 7,435.
The sprightly start was the result of a number of things.
Last night the US Federal Reserve raised interest rates as anticipated, but took a more dovish stance with regards to future rate hikes than markets had expected.
That cautiousness rubbed off on the dollar, the value of which dropped sharply in the hours after Janet Yellen’s speech.
The knock-on effect of a weaker greenback is that it makes dollar-denominated commodities, such as gold and copper, cheaper for customers paying in other currencies.
Obviously miners got a boost from this, with all five of the morning’s top blue chip risers mining firms.
Fresnillo PLC (LON:FRES), Antofagasta PLC (LON:ANTO), BHP Billiton plc (LON:BLT) and Randgold Resources Limited (LON:RRS) were all up between 5% and 7% in early trading.
The big winner in that sector though was Anglo American PLC (LON:AAL), which gained more than 9% to £13.03.
On top of the help from the Fed, Indian billionaire Anil Agarwal said he would be spending up £2bn in the coming months to take a 12% stake in Anglo which went down well with the markets.
Aside from the Fed/ dollar/ miners impact, the markets breathed a sigh of relief on the results from the Dutch election.
Only a few weeks ago, polls were suggesting ‘Nethexiteer’ Geert Wilder could win the election which would’ve had a similarly destabilising effect as Brexit.
But centre-right Prime Minister Mark Rutte looks set to secure victory which calmed apprehensive traders.
Hikma Pharmaceuticals PLC (LON:HIK) – yesterday’s star performer – gave up some of those gains today and was down 3% to £22.29.
Down on the FTSE 250, housebuilder Balfour Beatty plc (LON:BBY) was also in the red despite posting its first profit since 2014.
The company behind Crossrail made an £8mln profit last year following on from a £199mln loss the year before, but investors still weren’t convinced.
J Sainsbury plc (LON:SBRY) was another which headed lower this morning. Sales at its Sainsbury’s supermarkets have fallen in the first nine weeks of the year the group said, but its recently acquired Argos business reported strong growth. Shares edged 0.6% lower to 269p.
8.30am...FTSE 100 off to fast start
The FTSE 100 has shown a faster turn of foot than expected, rising 51 points to 7,420 in early trading, thanks to buoyant miners.
Anglo American PLC (LON:AAL), up 7.7% at 1,287p, tops the bill among Footsie constituents, closely followed by silver producer Fresnillo PLC (LON:FRES), up 5.5%.
As expected the Federal Reserve raised interest rates by another 0.25% last night, but was relatively downbeat about prospects for the US economy for the rest of the year, prompting a sell-off of the dollar.
The trading update from Sainsbury (J) PLC (LON:SBRY) underwhelmed the market, which responded by dragging the shares 1.6% lower. No one expected at this stage that investors would be saying “thank heavens for Argos” when Sainsbury’s issued sales figures.
Proactive news headlines
Construction activities have resumed on gold producer Petropavlovsk PLC’s (LON:POG) pressure oxidation hub at the Pokrovskiy mine in Russia’s Far East.
Hayward Tyler Group PLC (LON:HAYT) celebrated another contract win in the nuclear industry and also revealed that the deadline for repayment of £2.4mln short-term debt has been put back by another month.
Commercial passenger aircraft leasing company Avation PLC (LON:AVAP) is in talks to sell off six of its ATR 72 planes for a price above the company’s book value.
Devon-based tungsten miner Wolf Minerals Ltd (LON:WLFE) expects the performance at the Drakelands (Hemerdon) mine to improve as it drills through into harder granite deeper below the surface.
Capital Drilling Limited (LON:CAPD) is making a phased strategic investment of up to US$3.8mln in a company that provides laboratory testing services to the mining and exploration industries. It has advanced US$950,000 to private company A2 Global Ventures – the first of three tranches to be paid over the course of this year.
Clinigen Group PLC’s (LON:CLIN) Idis Managed Access division has partnered with AIM drug developer Diurnal Group PLC (LON:DNL) to offer two Diurnal treatments.
Allergy Therapeutics plc (LON:AGY) has recruited the first patients to its phase III trial of people with a sensitivity to birch pollen. The year-long study over 50 sites in Germany, Sweden, Austria and Poland will recruit 550 patients and assess the efficacy and safety of its ultra-short course treatment Pollinex Quattro.
Atlantis Resource Ltd (LON:ARL) has unveiled plans to launch a tidal power business in France, which it describes as Europe's second largest market for the renewable energy source.
Preview - FTSE 100 expected to creep higher
It is predicted that London’s FTSE 100 will continue to creep higher on Thursday after the US Federal Reserve increase American interest rates.
The move to lift rates by 25 basis points was largely expected, so there was very little drama in equity markets. It came also with the narrative that the decision reflects the progress of an improving economy and a gradual return to ‘normal’ after years of unprecedented lows.
“Janet Yellen delivered a dovish accompanying statement. She said that the Fed is moving closer to its policy targets, adding that the policy remains accommodative and the Fed rates should be gradually increased to reach a neutral stance,” said Ipek Ozkardeskaya, analyst at London Capital Group.
“However, the US dollar sold off across the board as she didn’t hint at the next rate hike, nor showed too much concern regarding Donald Trump’s fiscal plans.”
On Wall Street, the Dow Jones closed out Wednesday’s trading up 112 points, 0.54%, at 20,950. The S&P 500, meanwhile, had gained 0.84% to finish at 2,385 and the Nasdaq added 0.74% to 5,9000.
In Asia, Japan’s Nikkei this morning rose ever so slightly, to 19,590. Hong Kong’s Hang Seng added 1.68% to 24,197 and the Shanghai Composite rose 0.8% to 3,267.
Australia’s ASX 200 edged up 0.2% to 5,785.
Here in London, spreadbetting and CFD firm IG Markets sees the FTSE 100 up about 30 points, calling the blue-chip benchmark at 7,404 to 7,408 just over an hour before the exchange opens.
City headlines
Bond and crude prices firm after Fed raises rates - Financial Times
Britons' Drinking Habits are Ginning Up the Inflation Data – Bloomberg
Environmental policies are driving down consumer energy bills, experts say - The Independent
Low carbon drive 'cuts household bills'- BBC News
Zara owner Inditex stays streets ahead of rivals with 10pc jump in profits - Telegraph.co.uk