London close: Stocks end slightly lower amid oil price volatility

Stocks ended marginally lower on Friday, but well off their lows of the session, as investors booked profits following a four-day rally.

This week has been largely underpinned by the Bank of Japan and Federal Reserve’s policy decisions on Wednesday. The market was boosted by news the Fed left interest rates unchanged and by the BoJ saying it would aim to keep yields on 10-year government bonds at around current levels of 0%.

“The key central bank meetings on Wednesday cleared the way for investors to move back into equities, and while the last week of September tends to be a tough one for stock markets, the way ahead look very congenial indeed,” said Chris Beauchamp, chief market analyst at IG.

There was little in the way of economic data to drive the market with the only notable releases being Eurozone and US services data.

However, in a statement posted to the website of the Federal Reserve bank of Boston, regional Fed president Eric Rosengren advocated an immediate hike in interest rates Stateside.

In his opinion, not doing so put the sustainability of the economic expansion at risk.

Markit’s Eurozone services purchasing managers’ index fell to 52.6 in September from 52.9 in August, compared to estimates of 52.8. A reading above 50 signals an expansion in the sector while a level below that suggests a contraction.

A similar gauge for the US fell to 51.4 from 52 in August, missing expectations for a reading of 51.9. A reading above 50 indicates expansion.

Acting as a backdrop, oil prices were highly volatile heading into next week's informal OPEC meeting in Algiers. A report from Reuters according to which Saudi Arabia had told Iran this same month it was ready to reduce output if the Persian country agreed to freeze its own production at then current levels of 3.6m barrels per day fed sharp gains in early afternoon trading.

However, just after the closing bell in London Brent crude was trading down by 2.56% to $46.46 per barrel on the back of reports that Saudi Arabia did not expect any formal decision on oil output to be taken next week.

On the company front, shares in Sports Direct jumped following news that founder and largest shareholder Mike Ashley is taking over as CEO from Dave Forsey. “By taking over as CEO, Mike Ashley is making a public commitment to refocusing and getting the company he founded back on track,” said Jasper Lawler, market analyst at CMC Markets.

Persimmon and its peers got a boost as Liberum upgraded the stock to ‘buy’ from ‘hold’ and lifted price targets across the sector as it took a more positive view.

“We have upgraded estimates across our coverage as 2016 trading is much better than we feared in our immediate post-referendum downgrades. We still expect a dip in earnings in 2017 and 2018, but we have moderated our volume decline expectations."

Housebuilders Barratt Developments and Taylor Wimpey were also in the black following the note.

Anglo American advanced after appointing Fortescue Metals’ Stephen Pearce as finance director following Rene Medori’s decision to retire, as announced back in April.

Vodafone slipped after saying it has signed a new non-equity partner agreement for Cameroon with 4G-LTE telecommunications operator Afrimax Group.

Banks gave back part of the gains seen after the Fed’s decision to stay put on rates, with Royal Bank of Scotland and Lloyds Banking Group in the red.

Market Movers

FTSE 100 (UKX) 6,909.43 -0.03%
FTSE 250 (MCX) 17,923.08 -0.36%
techMARK (TASX) 3,526.44 -0.35%

FTSE 100 - Risers

Anglo American (AAL) 951.00p 3.31%
Ashtead Group (AHT) 1,230.00p 2.67%
Persimmon (PSN) 1,838.00p 2.28%
Barratt Developments (BDEV) 496.80p 2.01%
Mediclinic International (MDC) 948.00p 1.99%
Carnival (CCL) 3,606.00p 1.86%
British American Tobacco (BATS) 4,939.00p 1.56%
Dixons Carphone (DC.) 373.20p 1.50%
Glencore (GLEN) 210.85p 1.42%
CRH (CRH) 2,607.00p 1.20%

FTSE 100 - Fallers

Polymetal International (POLY) 980.00p -7.46%
ITV (ITV) 186.70p -3.86%
BAE Systems (BA.) 524.50p -2.42%
Royal Bank of Scotland Group (RBS) 182.60p -2.09%
Lloyds Banking Group (LLOY) 55.98p -2.05%
Worldpay Group (WI) (WPG) 298.20p -1.94%
Standard Chartered (STAN) 639.10p -1.93%
Pearson (PSON) 759.50p -1.87%
Next (NXT) 4,822.00p -1.81%
Travis Perkins (TPK) 1,543.00p -1.66%

FTSE 250 - Risers

Sports Direct International (SPD) 302.80p 5.54%
Bellway (BWY) 2,411.00p 3.88%
Softcat (SCT) 320.30p 3.32%
Barr (A.G.) (BAG) 522.00p 2.86%
Daejan Holdings (DJAN) 5,800.00p 2.75%
Redrow (RDW) 409.40p 2.48%
Bovis Homes Group (BVS) 875.50p 2.04%
Crest Nicholson Holdings (CRST) 465.00p 1.80%
NMC Health (NMC) 1,392.00p 1.68%
Spire Healthcare Group (SPI) 394.20p 1.49%

FTSE 250 - Fallers

Indivior (INDV) 313.50p -3.89%
AO World (AO.) 160.70p -3.83%
Evraz (EVR) 155.90p -3.59%
Ted Baker (TED) 2,520.00p -3.08%
Hunting (HTG) 434.20p -2.67%
Drax Group (DRX) 304.60p -2.62%
IP Group (IPO) 178.90p -2.40%
Virgin Money Holdings (UK) (VM.) 298.20p -2.36%
Vesuvius (VSVS) 349.30p -2.18%
Laird (LRD) 320.50p -2.17%