London close: Retail and property feature as FTSE retains gains after Yellen speech

London equities ground their way marginally higher on Thursday in what was an overall cautious session, which also saw Federal Reserve chair Janet Yellen issue a hawkish comment that the US central bank needs to remain "forward looking" when setting policy.

At the close, FTSE 100 was up 0.67% to 6794.71. At about 17:01 GMT, sterling was up 0.05% to buy $1.2449 and the dollar-spot index was up 0.22% to $100.630.

Yellen added the Fed needed to be mindful of the risks that might be inherent in keeping rates low beyond their past due date. She also appeared to have joined the camp of those who believed another rate hike might be appropriate soon.

"Were the FOMC (Federal Open Market Committee) to delay increases in the federal funds rate for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of the Committee's longer-run policy goals.

Moreover, holding the federal funds rate at its current level for too long could also encourage excessive risk-taking and ultimately undermine financial stability."

Returning to the FTSE, blue-chip gains were underpinned by buoyant turns by house builders, commercial property and miners, with US rates-touchy utilities gaining and retail-related stocks nipping ahead on macro data.

UK consumers continued to spend freely in October, surprising most economists. Retail sales volumes jumped 1.9% month-on-month, handily beating estimates for a rise of 0.5%.

"The markets sort of flattened out this afternoon, with a couple of items from the US cancelling out the moves made following the UK retail sales and Eurozone inflation figures earlier in the day," said Spreadex financial analyst Connor Campbell.

IG market analyst Josh Mahony described Thursday's session as yet another one laden with hesitation, noting the FTSE's rise had failed to bust out of its week-long range.

"The dollar is enjoying another resurgence after somewhat of a lull yesterday, with Janet Yellen’s hawkish comments further raising expectations of a December hike," Mahony said.

"Unlike (Bank of England governor Mark) Carney, Yellen isn't going anywhere, after discarding the notion that she will step down earlier than planned."

On the data front, inflation in the euro-area was 0.5% on the year in October, up from 0.4% the month before, the highest reading in 28 months, according to Eurostat figures. Consumer prices were up 0.2% last month in the single-currency bloc.

Meantime, US initial jobless claims unexpectedly fell 19,000 from the previous week to 235,000 on 12 November 2016, when economists had been expecting a slight rise to 257,000.

US' headline consumer-price index (CPI) advanced 0.4% month-on-month in October and was up by 1.6% year-on-year, versus a rise of 1.5% in September, the Bureau of Labor Statistics said. Core CPI rose 0.1% during the month.

Markets were also expected to keep close tabs on the results of the first meeting between US President-elect Donald Trump and a foreign leader, Japanese prime minister Shinzo Abe.

Acting as a backdrop, reports indicated that JP Morgan Chase chief Jamie Dimon had turned down an offer to become the next US Secretary of the Treasury.

In corporate news, Royal Mail slumped after it said half-year revenue edged up thanks to its European business, but the EU referendum resulted in a reduction in UK marketing activity.

Building materials group CRH gained as it reported a 6% rise in cumulative sales in the first nine months of the year and said it continues to expect earnings for the year to be in excess of €3bn, while Great Portland Estates lost ground after reporting a half-year loss.

Engineering consultancy WS Atkins declined as it posted a 14% rise in underlying pre-tax tax profit for the six months to the end of September, but a 58% drop in statutory pre-tax profit.

Rio Tinto edged higher after terminating the contracts of two directors following an internal review into a controversial payment to a consultant concerning the Simando iron ore project in Guinea.

Investec advanced as it said first-half profit pushed up 20%, while Ted Baker rallied after it said revenue in the third quarter rose 14.8%, up a touch from the 14.4% acceleration seen in the first half of the year.

Merchant bank Close Brothers was also in the black as it said it has made a “very good start to the year”, mainly on the back of strength in its banking division and higher trading income in market maker Winterflood.

Market Movers

FTSE 100 (UKX) 6,794.71 0.67%
FTSE 250 (MCX) 17,600.94 0.73%
techMARK (TASX) 3,320.98 0.61%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 6,085.00p 4.02%
Barratt Developments (BDEV) 486.00p 3.51%
Mondi (MNDI) 1,558.00p 3.11%
BT Group (BT.A) 373.40p 3.11%
Persimmon (PSN) 1,763.00p 3.10%
Anglo American (AAL) 1,126.50p 2.97%
British Land Company (BLND) 610.00p 2.95%
Provident Financial (PFG) 2,929.00p 2.77%
Taylor Wimpey (TW.) 152.10p 2.42%
Antofagasta (ANTO) 687.50p 2.31%

FTSE 100 - Fallers

Royal Mail (RMG) 464.00p -7.00%
Rolls-Royce Holdings (RR.) 699.00p -5.35%
Hikma Pharmaceuticals (HIK) 1,664.00p -3.98%
Johnson Matthey (JMAT) 3,227.00p -3.24%
TUI AG Reg Shs (DI) (TUI) 1,001.00p -2.82%
Sainsbury (J) (SBRY) 237.60p -0.75%
Lloyds Banking Group (LLOY) 59.98p -0.71%
Sky (SKY) 784.50p -0.70%
Bunzl (BNZL) 1,991.00p -0.65%
Polymetal International (POLY) 788.50p -0.44%

FTSE 250 - Risers

Vectura Group (VEC) 145.70p 8.41%
IMI (IMI) 948.00p 3.72%
Rightmove (RMV) 3,807.00p 3.70%
Debenhams (DEB) 57.95p 3.57%
Hill & Smith Holdings (HILS) 1,255.00p 3.47%
Daejan Holdings (DJAN) 5,670.00p 3.47%
Telecom Plus (TEP) 1,182.00p 3.41%
AA (AA.) 263.00p 3.38%
Zoopla Property Group (ZPLA) 313.80p 3.26%
Safestore Holdings (SAFE) 358.50p 3.22%

FTSE 250 - Fallers

Lancashire Holdings Limited (LRE) 636.50p -9.46%
Virgin Money Holdings (UK) (VM.) 316.70p -6.44%
Softcat (SCT) 306.00p -5.99%
Redefine International (RDI) 37.35p -3.79%
Atkins (WS) (ATK) 1,614.00p -2.77%
Greencore Group (GNC) 312.90p -2.62%
TalkTalk Telecom Group (TALK) 185.00p -2.37%
JPMorgan Indian Investment Trust (JII) 597.50p -1.89%
Fisher (James) & Sons (FSJ) 1,563.00p -1.88%
Man Group (EMG) 123.10p -1.76%