London close: Shares track gains on Wall Street, end higher
Stocks in London finished slightly higher, despite a sharp drop in crude oil futures, as investors focused on a positive start to US trading which saw Wall Street´s main equity gauges set fresh record highs shortly after the opening bell.
The top flight index rose 0.17% or 11.55 points to 6,840.75, while front month Brent futures lost 3.4% to $47.39 per barrel on the ICE after Saudi Arabia said it would not attend a 28 November technical meeting between OPEC and non-member nations.
Focusing on first reaching a deal among OPEC members would be a more effective approach, Saudi said in an official letter, Reuters reported.
Nonetheless, some analysts were continuing to carefully monitor risks across the Channel.
"The divergence between US markets and the rest of Europe continues to widen, with the risks to Europe’s markets being no better illustrated by this morning’s news that Italian bank Monte dei Paschi saw shareholders approve the latest plans to raise €5bn of extra share capital.
"[...] Italian finance minister Padoan was at pains to reassure investors that his recapitalisation would work, which is never a good omen. The fact that he needed to say it is a warning all by itself to steer well clear. Markets would seem to agree driving the share price sharply lower," CMC Markets´ chief market analyst Michael Hewson said.
Mixed data in the UK
The UK economy expanded at a quarter-on-quarter pace of 0.5% over the three months to September despite household expenditures having run slightly below some economists´ forecasts at 0.6% (Barclays: 0.8%), albeit with a quicker pace of fixed investment of 1.1% (Barclays: -0.5%), acting as an offset.
"Putting everything together, we now expect GDP to edge 0.7% next year (0.5% previously) and 1.5% in 2018 (unchanged). This remains overall cautious and in the lower range of the consensus (1.1% for next year +/- a standard deviation of 0.6pp) as we continue to believe that the actual triggering of Article 50 and the subsequent drop in sentiment will deliver some negativity in the first half of next year," Barclays Research said in a research report sent to clients.
Retail sales in the UK grew at the fastest pace in over a year in the 12 months to November, according to the latest quarterly Distributive Trades Survey from the Confederation of British Industry.
The retail sales balance rose to +26%, its strongest level since September last year, ahead of expectations for an unchanged reading of +21%.
Meanwhile, and on the political front in Europe, French presidential candidates François Fillon and Alain Juppé went head to head in a television debate on Thursday night, with the former seen as the winner ahead of a vote on Sunday which will decide who will be the French right candidate in next year's election.
European M&A bolsters big pharma
In corporate news, AstraZeneca was a high-riser following news of Johnson&Johnson´s $17bn (£13.65bn) takeover approach for Europe´s largest biotech firm, Swiss-listed Actelion.
Pennon continued to deliver a good performance in the first half of its financial year at both its water and waste businesses, with costs savings and self-help initiatives falling straight to the bottom line.
Revenues declined 0.5% to £685.5m despite which profits before tax jumped 19.9% to £128.1m, with the latter driven by costs savings at South West Water and growth at Viridor by its ERFs and self-help measures at its recycling arm. Earnings per share were up by 1.7% to 23.6p.
Lloyds on the other hand was moving lower as investors took some profits ahead of the Bank of England´s annual stress tests of the UK banking sector.
BHP Billiton and its Brazilian joint venture partner Vale said they have approved $181m to fund remediation and compensation programs at the Samarco iron ore project after a dam burst in a year ago.
The two companies will extend a £230m line of credit to Samarco. The funding will be offset against a $1.2bn provision made in June.
“Funds will be released to Samarco only as required and subject to the achievement of key milestones,” BHP said.
“The short-term facility allows BHP Billiton Brasil to preserve the value of its investment as options for restart continue to be assessed.”
Market Movers
FTSE 100 (UKX) 6,840.75 0.17%
FTSE 250 (MCX) 17,603.42 0.07%
techMARK (TASX) 3,303.17 0.27%
FTSE 100 - Risers
Sky (SKY) 787.00p 3.89%
AstraZeneca (AZN) 4,301.50p 2.17%
Unilever (ULVR) 3,173.00p 1.70%
National Grid (NG.) 923.40p 1.48%
Mediclinic International (MDC) 733.50p 1.17%
GlaxoSmithKline (GSK) 1,540.50p 1.15%
British American Tobacco (BATS) 4,421.00p 1.12%
Smith & Nephew (SN.) 1,117.00p 1.09%
Experian (EXPN) 1,477.00p 1.03%
Diageo (DGE) 2,013.50p 0.95%
FTSE 100 - Fallers
Standard Life (SL.) 345.80p -2.21%
Glencore (GLEN) 283.30p -1.84%
DCC (DCC) 6,100.00p -1.61%
Lloyds Banking Group (LLOY) 58.77p -1.52%
Anglo American (AAL) 1,235.50p -1.48%
Persimmon (PSN) 1,707.00p -1.39%
Paddy Power Betfair (PPB) 8,605.00p -1.32%
Barratt Developments (BDEV) 468.90p -1.12%
Rolls-Royce Holdings (RR.) 666.00p -0.97%
Fresnillo (FRES) 1,232.00p -0.96%
FTSE 250 - Risers
UDG Healthcare Public Limited Company (UDG) 648.50p 5.53%
Paragon Group Of Companies (PAG) 363.40p 5.17%
Countrywide (CWD) 178.00p 5.01%
Allied Minds (ALM) 369.40p 4.42%
Laird (LRD) 151.00p 3.64%
Ocado Group (OCDO) 274.80p 3.30%
Ibstock (IBST) 185.10p 3.01%
RPC Group (RPC) 1,016.00p 2.99%
IP Group (IPO) 149.20p 2.93%
Safestore Holdings (SAFE) 355.50p 2.48%
FTSE 250 - Fallers
Grafton Group Units (GFTU) 556.00p -2.97%
Amec Foster Wheeler (AMFW) 409.70p -2.73%
Petra Diamonds Ltd.(DI) (PDL) 157.90p -2.71%
Hunting (HTG) 520.50p -2.62%
Petrofac Ltd. (PFC) 782.00p -2.31%
Mitchells & Butlers (MAB) 240.60p -2.23%
Tullow Oil (TLW) 272.70p -2.01%
Evraz (EVR) 255.00p -1.92%
Aggreko (AGK) 793.50p -1.67%
Serco Group (SRP) 135.60p -1.60%