London close: FTSE gains as investors continue to mull policy decisions

The FTSE 100 finished Friday in the green, holding onto gains from the previous session on the back of the Bank of England and Federal Reserve’s policy announcements.

London’s top tier index closed up 0.18% to 7,011.64 points.

Oil prices recovered from Thursday’s lows after OPEC members, including Kuwait, Saudi Arabia, and Abu Dhabi, told customers they would cut supplies from January as part of the cartel’s deal to limit output.

Brent crude increased 1.7% to $55.04 per barrel and West Texas Intermediate grew 1.6% to $51.77 per barrel at 1642 GMT.

On a quiet day of trade, investors continued to mull policy decisions by the BoE and the Fed

The Bank’s Monetary Policy Committee on Thursday unanimously voted to keep interest rates and its asset purchase programme unchanged but said it was ready to tighten or loosen policy if needed to respond to any changes in the economic outlook.

The Fed on Wednesday raised interest rates to between 0.50% and 0.75% from 0.25% to 0.50% and signalled that more hikes were on the cards for next year than it had at the meeting in September. A further three hikes were projected in 2018, followed by another three in 2019.

On Friday’s agenda, Eurostat confirmed euro-area inflation rose 0.6% year-on-year in November, in line with its 'flash' estimate provided last month and compared to a 0.5% rise in October.

The European Central Bank, which is targeting 2% inflation, last week decided to extend its asset purchase programme in order to ensure that price pressures would continue to rise toward that level.

Meanwhile, the CBI’s industrial trends survey on the UK manufacturing sector came in better than expected for December.

The orders balance was 0 with 21% of businesses reporting orders were above normal and 21% saying they were below. It beat the -5% reading predicted by economists and marked the highest level in 20 months.

CBI’s chief economist, Rain Newton-Smith, said: “It’s good to see our manufacturers ending the year on a high note with growth in production the strongest since summer 2014 and total orders still robust.

“But the weakness of sterling is pushing up the cost of imports, and our survey shows strong signs of this feeding through to higher factory gate prices.”

In the US, a key gauge of activity in the US homebuilding sector weakened in November. US housing starts were running at an annualised pace of 1.09m, 18.7% below the previous month's figure and 6.9% lower than in the same month one year ago, according to the Department of Commerce. Economists had pencilled in a month-on-month decline of just 6.8% for starts.

On the company front, Micro Focus International slumped after UBS cut its rating on the stock to ‘neutral’ from ‘buy’ citing near-term risks.

Trinity Mirror shares gained after saying its full-year performance is likely to exceed expectations.

Rentokil was on the front foot after agreeing to merge its Workwear and Hygiene divisions with Germany's Haniel & Cie Holding Co.

Hikma Pharmaceuticals, Shire and Astrazeneca rallied on a positive read-across following reports Sanofi is in advanced talks to acquire Actelion.

The companies are said to be discussing a price of about $275 per Actelion share and a deal could be announced as soon as next week, Bloomberg reported.

Market Movers

FTSE 100 (UKX) 7,011.64 0.18%
FTSE 250 (MCX) 17,726.62 -0.24%
techMARK (TASX) 3,331.52 0.26%

FTSE 100 - Risers

easyJet (EZJ) 1,044.00p 3.67%
Old Mutual (OML) 197.90p 2.97%
Hikma Pharmaceuticals (HIK) 1,795.00p 2.75%
Burberry Group (BRBY) 1,485.00p 2.13%
BP (BP.) 489.70p 2.13%
Shire Plc (SHP) 4,597.00p 2.09%
Randgold Resources Ltd. (RRS) 5,575.00p 1.92%
International Consolidated Airlines Group SA (CDI) (IAG) 457.80p 1.58%
Royal Mail (RMG) 452.00p 1.46%
Intu Properties (INTU) 271.00p 1.27%

FTSE 100 - Fallers

Micro Focus International (MCRO) 2,151.00p -3.76%
Tesco (TSCO) 200.40p -2.20%
Antofagasta (ANTO) 668.50p -2.19%
Barratt Developments (BDEV) 455.20p -1.88%
Anglo American (AAL) 1,136.00p -1.60%
Carnival (CCL) 4,068.00p -1.50%
Wolseley (WOS) 4,865.00p -1.50%
Taylor Wimpey (TW.) 153.00p -1.48%
Glencore (GLEN) 268.05p -1.47%
Dixons Carphone (DC.) 341.60p -1.24%

FTSE 250 - Risers

CMC Markets (CMCX) 110.70p 8.53%
Cobham (COB) 174.30p 5.76%
Shawbrook Group (SHAW) 268.30p 5.63%
Evraz (EVR) 271.00p 5.16%
Brown (N.) Group (BWNG) 218.30p 4.70%
Rentokil Initial (RTO) 220.00p 4.12%
PZ Cussons (PZC) 319.20p 3.37%
Aldermore Group (ALD) 230.10p 3.23%
Paragon Group Of Companies (PAG) 409.80p 2.99%
JRP Group (JRP) 145.00p 2.91%

FTSE 250 - Fallers

Hochschild Mining (HOC) 207.90p -7.44%
Just Eat (JE.) 571.50p -4.67%
International Personal Finance (IPF) 166.00p -4.60%
Auto Trader Group (AUTO) 388.80p -3.55%
Rightmove (RMV) 3,708.00p -2.98%
Clarkson (CKN) 2,051.00p -2.93%
CYBG (CYBG) 271.50p -2.51%
Zoopla Property Group (ZPLA) 314.40p -2.39%
CLS Holdings (CLI) 1,533.00p -2.36%
Petrofac Ltd. (PFC) 872.50p -2.24%