London close: 'Trump effect' heaves FTSE to record closing highs as global equities surge
(ShareCast News) - London, Europe and US stock markets got a hefty heave higher Wednesday on the back of US President Donald Trump's $1trn infrastructure pledge to Congress last night, with the prospect of a US rates hike in March also a factor in traders' optimism.
'The Donald,' as some refer to the distinctively-barneted and polarising US supremo, pledged in his policy-light speech that he would pony up with $1trn to rebuild the US' infrastructure.
This as successive US Federal Reserve officials have taken hawkish views on lifting US rates served to revitalise transatlantic market optimism.
FTSE 100 ended up 1.64% to 7,382.90 and FTSE 250 closed up 1.13% to 18,983.01, both on fresh all-time closing highs thanks to the so-called 'Trump effect, which referred to market gains since the new president has taken office.
"The FTSE has enjoyed an outstanding day, thanks in part to a weakening pound at the hands of a resurgent US dollar," said Joshua Mahony, market analyst at IG.
"Trump's infrastructure promise has clearly had a substantial effect upon the FTSE, with the leader-board including firms such as Ashtead and CRH which stand to gain substantially from the approval of $1trn in spending," Mahony added.
In Europe, the Euro Stoxx 50, Dax and Cac 40 all bounded higher, while Wall St's Dow Jones Industrial Average, S&P 500 and Nasdaq Composite surged, too.
"Pinch punch first of the month, Donald Trump sends stocks up a bunch!' waxed Jasper Lawler at London Capital Group. The Dow had risen above 21,000 for the first time, he noted.
"By bringing Congress on side, Trump's plans to 'restart the engine' of the US are a lot more likely to become policy," said Lawler, who observed the US beneficiaries of Trump's plans were infrastructure and defence stocks, which appeared to hold good elsewhere.
In London, moving along, this translated to gains on most FTSE 350 indices, with those for industrial metals, mining, construction & materials, general industrials and industrial engineering leading the way. Industrial metals' prices flew higher, but safe-haven gold fell.
"The rocket put under British stocks was fuelled by both hopes of Trump-inspired pro-business reform and a sinking British pound ahead of a likely Brexit bill defeat in the House of Lords," said Lawler in a statement. The latter only added to Brexit uncertainty, he added.
CRH and ITV were big winners after issuing their full-year results, while other blue chips in the news including Royal Mail, British Land, Wolseley, Tesco and Bunzl also did well.
Coca-Cola HBC, however, was out of favour. These blue-chip results were set against a flood of results and news from FTSE 250 and AIM companies.
On the UK data front, growth in the UK manufacturing sector slowed more than expected in February. The Markit/CIPS manufacturing purchasing managers' index fell to 54.6 from 55.7 in January. A drop of 55.6 was expected.
Other data, from Bank of England, showed mortgage approvals for house purchases rose to an 11-month-high in January of 69,928, from 68,266 the month before. Views were for a print of 68,650.
Consumer credit in January was up £1.42bn, in line with expectations, and compared to £1bn in December, but below the six-month average of £1.6bn. On an annual basis, however, the rate ticked down to 10.3% from 10.6% in December and 10.9% in November.
FTSE 100 (UKX) 7,382.90 1.64%
FTSE 250 (MCX) 18,983.01 1.13%
techMARK (TASX) 3,434.10 1.03%
FTSE 100 - Risers
Ashtead Group (AHT) 1,751.00p 5.74%
CRH (CRH) 2,854.00p 4.93%
Glencore (GLEN) 337.75p 4.88%
Next (NXT) 4,003.00p 4.60%
ITV (ITV) 211.70p 4.54%
Persimmon (PSN) 2,150.00p 4.32%
BHP Billiton (BLT) 1,353.50p 4.32%
Standard Chartered (STAN) 748.50p 3.61%
Wolseley (WOS) 5,090.00p 3.56%
Bunzl (BNZL) 2,335.00p 3.55%
FTSE 100 - Fallers
Royal Mail (RMG) 407.00p -1.83%
Babcock International Group (BAB) 936.50p -1.21%
Randgold Resources Ltd. (RRS) 7,425.00p -1.13%
Centrica (CNA) 224.50p -1.06%
Fresnillo (FRES) 1,473.00p -0.87%
SSE (SSE) 1,530.00p -0.71%
Croda International (CRDA) 3,483.00p -0.71%
Rolls-Royce Holdings (RR.) 782.50p -0.57%
United Utilities Group (UU.) 973.50p -0.51%
National Grid (NG.) 972.90p -0.47%
FTSE 250 - Risers
Kaz Minerals (KAZ) 561.00p 6.45%
Vedanta Resources (VED) 913.00p 6.04%
Senior (SNR) 192.90p 5.85%
ZPG Plc (ZPG) 389.70p 4.90%
Dechra Pharmaceuticals (DPH) 1,679.00p 4.29%
Petra Diamonds Ltd.(DI) (PDL) 143.10p 4.22%
Hill & Smith Holdings (HILS) 1,153.00p 4.17%
Evraz (EVR) 239.80p 4.17%
Countryside Properties (CSP) 233.00p 4.06%
Euromoney Institutional Investor (ERM) 1,130.00p 4.05%
FTSE 250 - Fallers
International Personal Finance (IPF) 162.00p -10.60%
Carillion (CLLN) 206.60p -5.66%
Nostrum Oil & Gas (NOG) 479.60p -4.18%
Hochschild Mining (HOC) 259.60p -2.48%
Meggitt (MGGT) 459.60p -2.32%
Man Group (EMG) 143.50p -1.98%
Inmarsat (ISAT) 699.00p -1.76%
Cairn Energy (CNE) 218.80p -1.57%
Elementis (ELM) 295.20p -1.47%
Wood Group (John) (WG.) 745.00p -1.39%