London close: Stocks flat, pound and euro weaker

Dovish remarks from European Central Bank president Mario Draghi weighed on the single currency but failed to trigger any buying in equities on either side of the channel, likely as a result of traders limiting their risk ahead of the the coming Thanksgiving holiday-shortened trading week Stateside.

On Friday, the Footsie finished higher by just 4.70 points or 0.07% to 6,334.63 and was up by 216.35 points for the week as a whole.

Speaking at the 25th European Banking Congress in Frankfurt, Mario Draghi said that if the ECB's inflation stability mandate were at risk then the ECB would do "what we must" to bring inflation higher "as quickly as possible."

“While it may not be as good a sound bite as “whatever it takes, and believe me it will be enough” the tone seems pretty unequivocal and more or less nails on the prospect of action when the bank meets in less than two weeks’ time,” said Michael Hewson, chief market analyst at CMC Markets UK.

“The only real question remains as to how much they will ease by, and what type of measures they intend to announce,” Hewson added.

Euro/dollar fell 0.73% to 1.0655 on the back of his remarks. Nonetheless, analysts at Morgan Stanley cautioned that the euro was increasingly susceptible to a bounce as it neared its 1.06 target for the end-2015.

Cable was also weaker, down by 0.61% to 1.5195. Morgan Stanley forecast the currency pair would weaken to 1.48 by the end of September 2016.

Oil markets were in focus too after Bank of America-Merrill Lynch warned clients Brent crude could fall to between $25-$30 a barrel next year, with currency devaluations by China and Saudi Arabia being key risks to monitor.

Overnight, US Federal Reserve vice chairman Stanley Fischer told an audience that the monetary authority had done everything it could to telegraph its message ahead of time and indications were that emerging market central banks had already undertaken the necessary preparations, although “no final decisions have been made.”

That last remark left some market observers scratching their heads about the timing of the next Fed hike.

In the background, data from ONS revealed that public sector net borrowing in the UK increased by £7.5bn in October (consensus: £5.3bn), down from the previous month's upwardly revised reading of £8.3bn.

According to Ruth Miller at Capital Economics, the figures left the Chancellor facing “the uncomfortable situation of having to find some money to soften the tax credit cuts at the same time as the borrowing forecasts are pushed up a bit.”

FTSE 100: BATS plotting to roll-up rival

British American Tobacco has put together a syndicate of banks to finance a possible purchase of rival Imperial Tobacco, according to the Financial Times's Alphaville, which cited "people claiming direct knowledge of the process". "With Imperial shares now trading near a record high the company might choose to go pens down rather than risk overpaying," the same sources cautioned.

Glencore surged on reports that it has agreed a deal to buy as much as half of the oil Libya currently exports as it looks to offset declining profits from mining.

EasyJet shares stalled on Friday as Kepler Cheuvreux cut its rating on the stock to ‘reduce’ from ‘hold’ and chopped the price target to 1,450p from 1,697p. “We expect revenue/seat and operating margins to start to decrease as of 2016,” said Kepler, adding that EasyJet replaced Air France-KLM on its 'least preferred’ sector list.

Rolls Royce bounced back despite negative coverage from analysts at Citi. “Although margins are likely to improve for current trough levels, the uncertainty around the scale&timing of uplift could keep shares range bound, the broker said.

The launch of Sky's new SkyQ premium service could translate into an additional £240m in sales, analysts at UBS said. Nomura reiterated its 'buy' recommendation and 1,300p target price.

Shares in G4S were near the bottom of the pile after Credit Suisse downgraded its recommendation on the shares to 'neutral' from 'outperform', slashing its target price to 250p from 320p to reflect FX, growing headwinds in emerging market operations – which accounted for 40% of 2014 EBIT – and looming challenges within the cash solutions business.

FTSE 250: Spectris higher on positive sales figures

Melrose Industries said trading for the Elster Group it agreed to sell to Honeywell in July was strong in the ten months to October, although its Brush business experienced challenging end market conditions.

Spectris said group like-for-like sales fell by 1% in the four months to the end of October, with trading conditions worsening as the period progressed.

Market Movers

FTSE 100 (UKX) 6,334.63 0.07%
FTSE 250 (MCX) 17,189.11 0.26%
techMARK (TASX) 3,189.94 0.60%

FTSE 100 - Risers

Royal Mail (RMG) 488.60p 2.50%
Old Mutual (OML) 207.00p 2.42%
Rolls-Royce Holdings (RR.) 552.00p 2.03%
Sky (SKY) 1,124.00p 1.90%
Aberdeen Asset Management (ADN) 345.30p 1.89%
Imperial Tobacco Group (IMT) 3,553.00p 1.75%
BAE Systems (BA.) 492.00p 1.63%
AstraZeneca (AZN) 4,499.50p 1.60%
Aviva (AV.) 511.50p 1.49%
Antofagasta (ANTO) 508.00p 1.40%

FTSE 100 - Fallers

Barclays (BARC) 221.90p -3.50%
G4S (GFS) 218.80p -3.01%
Lloyds Banking Group (LLOY) 71.78p -2.11%
Royal Dutch Shell 'B' (RDSB) 1,648.50p -1.96%
BG Group (BG.) 1,019.00p -1.88%
Royal Dutch Shell 'A' (RDSA) 1,635.00p -1.86%
Randgold Resources Ltd. (RRS) 3,976.00p -1.85%
Glencore (GLEN) 92.33p -1.83%
Royal Bank of Scotland Group (RBS) 309.50p -1.81%
easyJet (EZJ) 1,685.00p -1.69%

FTSE 250 - Risers

CLS Holdings (CLI) 1,810.00p 6.49%
Nostrum Oil & Gas (NOG) 389.50p 6.42%
Just Retirement Group (JRG) 161.70p 3.73%
Morgan Advanced Materials (MGAM) 253.80p 3.21%
Enterprise Inns (ETI) 106.60p 3.08%
Big Yellow Group (BYG) 800.00p 3.03%
Daejan Holdings (DJAN) 5,960.00p 3.00%
Allied Minds (ALM) 444.00p 2.87%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 464.50p 2.78%
Circassia Pharmaceuticals (CIR) 274.70p 2.65%

FTSE 250 - Fallers

Ophir Energy (OPHR) 83.40p -7.95%
Petra Diamonds Ltd.(DI) (PDL) 56.00p -6.56%
Amec Foster Wheeler (AMFW) 455.90p -4.86%
Premier Oil (PMO) 72.45p -4.67%
Petrofac Ltd. (PFC) 758.50p -3.80%
Jimmy Choo (CHOO) 145.00p -3.33%
Entertainment One Limited (ETO) 215.80p -3.23%
Tullow Oil (TLW) 197.30p -2.95%
Zoopla Property Group (WI) (ZPLA) 218.60p -2.84%
Countrywide (CWD) 388.70p -2.75%