London close: FTSE closes higher as data soothes Brexit worries

The FTSE 100 finished higher on Monday as data showed consumer spending in the UK picked up in July despite Brexit.

The Visa consumer spending index, calculated by Markit based on credit and debit card usage, found that spending increased 1.6% year-on-year in July, which was the biggest rise in three months and up from 0.9% in June.

A separate study also showed business confidence has not been as damaged by the Brexit decision as much as had been feared.

The BDO’s business optimism index fell to 97.9 in July from 98.9 the previous month.

Business output, a measure of companies’ experience of orders for the three months ahead, came in at 98.2 in July, down from 99.0 in June.

However, BDO said the figures were better than expected, suggesting that the initial impact of Brexit has been less severe than anticipated.

Elsewhere, Chinese exports fell 4.4% over the year in July, more than the 3.5% dip that was estimated. Imports declined 12.5%, exceeding forecasts for a 7% decrease.

At the same time, investors continued to cheer Friday’s strong non-farm payrolls report, which has been seen by many as increasing the chances of a rate hike from the Federal Reserve this year.

CMC Markets’ Michael Hewson said: "Certainly the odds have gone up that we could get a move, which suggests that this month’s Jackson Hole Symposium on 26 August is likely to be a key bellwether for the Fed’s appetite for a move higher, or whether the lack of inflation could stay there hand."

Meanwhile, a rally in oil prices gave the market a boost, supported by news OPEC will hold informal talks at an energy conference in September to address the recent slump in crude. OPEC president and Qatar’s energy minister, Mohammed bin Saleh al-Sada, said demand was expected to be strong in the second half of 2016 while global supply would weaken, the Wall Street Journal reported.

At 16:25 BST, Brent crude rose 2.2% to $45.29 per barrel and West Texas Intermediate gained 2.6% to $42.92 per barrel.

In corporate news, Barclays got a boost after Exane BNP Paribas upgraded the stock to ‘outperform’ from ‘neutral’ as it took a look at UK banks.

Shire was under the cosh as part of a sector-wide decline even as it posted interim numbers that showed total reported product sales up 36% to $3.9bn in the six months to 30 June. Broker Liberum said "some are worried about patent litigation over the next quarter".

Other drugmakers in the losing column included Hikma Pharmaceuticals, GlaxoSmithKline and AstraZeneca.

Interserve advanced as the support services and construction group was awarded a two-year extension of its contract to provide security services to the BBC worth more than £20m.

Meggitt was also soaring as it emerged that activist investor Elliott Capital Advisors has taken a stake in the FTSE 250 defence and aerospace engineer.

Market Movers

FTSE 100 (UKX) 6,809.00 0.23%
FTSE 250 (MCX) 17,557.74 0.53%
techMARK (TASX) 3,501.44 -0.29%

FTSE 100 - Risers

Royal Bank of Scotland Group (RBS) 184.70p 3.65%
Barclays (BARC) 157.40p 3.55%
Antofagasta (ANTO) 531.00p 3.31%
BHP Billiton (BLT) 1,047.50p 3.30%
Marks & Spencer Group (MKS) 330.40p 2.74%
Lloyds Banking Group (LLOY) 54.55p 2.63%
Legal & General Group (LGEN) 218.10p 2.15%
Capita (CPI) 975.00p 2.04%
Provident Financial (PFG) 2,799.00p 1.97%
Dixons Carphone (DC.) 352.30p 1.82%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,300.00p -3.97%
Shire Plc (SHP) 5,030.00p -2.24%
Persimmon (PSN) 1,694.00p -1.68%
Compass Group (CPG) 1,444.00p -1.57%
British American Tobacco (BATS) 4,759.50p -1.49%
Merlin Entertainments (MERL) 468.60p -1.35%
BAE Systems (BA.) 525.00p -1.13%
Whitbread (WTB) 3,907.00p -1.04%
GlaxoSmithKline (GSK) 1,678.00p -0.97%
Imperial Brands (IMB) 4,011.00p -0.93%

FTSE 250 - Risers

Meggitt (MGGT) 450.90p 8.76%
Hochschild Mining (HOC) 292.50p 8.25%
Ocado Group (OCDO) 276.30p 6.31%
Shawbrook Group (SHAW) 201.80p 6.21%
Aldermore Group (ALD) 146.50p 5.17%
Circassia Pharmaceuticals (CIR) 99.00p 4.71%
CYBG (CYBG) 262.10p 3.97%
Clarkson (CKN) 1,969.00p 3.69%
Tullow Oil (TLW) 210.50p 3.64%
Aberdeen Asset Management (ADN) 335.60p 3.48%

FTSE 250 - Fallers

McCarthy & Stone (MCS) 171.30p -4.73%
Vectura Group (VEC) 145.60p -3.45%
Homeserve (HSV) 566.00p -2.67%
Restaurant Group (RTN) 360.60p -2.36%
Dechra Pharmaceuticals (DPH) 1,344.00p -1.97%
Hastings Group Holdings (HSTG) 205.00p -1.91%
Ascential (ASCL) 242.00p -1.83%
Kennedy Wilson Europe Real Estate (KWE) 999.50p -1.82%
Cranswick (CWK) 2,339.00p -1.68%
Fidessa Group (FDSA) 2,532.00p -1.67%