London close: FTSE finishes on front foot

The FTSE rang off a choppy week on a positive note, bouncing back 3.1% on the day as bargain hunters snapped up mining stocks and lifted the index away from the previous day's three-year lows.

The blue chip index stood at 5,706.33 by the closing bell, just above where it ended Monday's session, with the mid-caps of the FTSE 250 dawdling towards a 1.8% gain to 15,458.22.

London sentiment was helped by a positive opening to the US session ahead of a three-day weekend, with short covering and bank stocks lifting prices after JPMorgan Chase chief Jamie Dimon spent a year's pay, or $27m, buying back shares of the banking giant.

After a precipitous falls in previous sessions, European banking sector was also on the front foot thanks to good results from Commerzbank and the announcement of debt buyback by Deutsche Bank.

In London, Standard Chartered was boosted by Investec upgrading its shares to ‘buy’ from ‘hold’, with the stock trading at a fresh 21st century low of 387p. The brokerage said it was little surprise StanChart has been almost the worst performing UK bank year-to-date, given the way 2016 has played out so far.

German GDP numbers also hit their target 0.3% growth mark, with CPI inflation also in line at 0.5%.

Resources companies were boosted by a bounce in oil prices. The catalyst for this rise being attribued to short covering ahead of the long weekend in the US and overnight rumours that the OPEC cartel was ready to discuss a production cut.

As for macro data, UK construction output rose in line with expectations in December, according to data from the Office for National Statistics.

Output in the construction industry was estimated to have increased 1.5% compared with November – in line with expectations – as a 2.6% rise in all new work was offset by repair and maintenance, which slipped 0.5%.

Construction output in the fourth quarter dropped more than expected, however, down 0.4% after a 1.7% decline in the third quarter.

In the US, retail sales rose more than expected in January, according to data from the Commerce Department.

Sales were up 0.2% on the month, driven by a large increase in non-store sales, beating economists’ expectations of a 0.1% increase and in line with the upwardly-revised 0.2% rise in December.

On the corporate front, Rolls-Royce was among the top of the risers after it halved its final dividend, but maintained its 2016 outlook and posted slightly better than expected underlying full year profits.

Anglo American surged past with a 18% rise thanks to the rise in metal prices compounded by rumours of possible buyer interest in its Brazilian mines.

BT Group was a faller after UBS downgraded it to ‘sell’ from ‘neutral’ with an unchanged 430p price target, saying the risk/reward profile was unattractive. The bank said risks from increasing competition have been underestimated. “Our estimates are broadly in line with consensus and assume a continuation of the current benign competitive environment. However, should competition intensify we see downside to 305p.”

Market Movers

FTSE 100 (UKX) 5,706.33 3.06%
FTSE 250 (MCX) 15,458.22 1.84%
techMARK (TASX) 2,918.45 1.53%

FTSE 100 - Risers

Anglo American (AAL) 371.60p 17.61%
Rolls-Royce Holdings (RR.) 606.00p 14.34%
Glencore (GLEN) 98.34p 12.16%
Antofagasta (ANTO) 433.20p 11.22%
Standard Chartered (STAN) 426.85p 10.40%
BHP Billiton (BLT) 697.00p 9.92%
Rio Tinto (RIO) 1,849.50p 8.48%
Provident Financial (PFG) 3,019.00p 7.48%
Royal Bank of Scotland Group (RBS) 240.10p 7.43%
BP (BP.) 331.70p 6.91%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,845.00p -1.60%
Tesco (TSCO) 177.00p -1.45%
Imperial Brands (IMB) 3,553.50p -0.95%
BT Group (BT.A) 448.25p -0.49%
TUI AG Reg Shs (DI) (TUI) 1,008.00p -0.10%
Sky (SKY) 977.00p 0.10%
Randgold Resources Ltd. (RRS) 6,140.00p 0.16%
Hammerson (HMSO) 536.50p 0.19%
SABMiller (SAB) 4,148.00p 0.36%
British Land Company (BLND) 653.50p 0.38%

FTSE 250 - Risers

Tullow Oil (TLW) 165.90p 12.55%
Vedanta Resources (VED) 230.00p 10.10%
Amec Foster Wheeler (AMFW) 363.10p 8.78%
Weir Group (WEIR) 854.00p 7.90%
Evraz (EVR) 69.70p 7.81%
Pendragon (PDG) 36.07p 7.19%
Investec (INVP) 430.20p 6.83%
BBA Aviation (BBA) 165.90p 6.41%
Meggitt (MGGT) 370.30p 6.10%
Cairn Energy (CNE) 148.90p 6.05%

FTSE 250 - Fallers

Henderson Group (HGG) 215.20p -6.07%
Allied Minds (ALM) 300.00p -2.91%
Just Retirement Group (JRG) 121.70p -2.64%
Lookers (LOOK) 147.70p -2.51%
Poundland Group (PLND) 148.90p -2.36%
Atkins (WS) (ATK) 1,159.00p -2.36%
Assura (AGR) 54.40p -1.98%
AO World (AO.) 159.90p -1.90%
Supergroup (SGP) 1,306.00p -1.73%
Pets at Home Group (PETS) 238.30p -1.65%