London close: Stocks extend gains
London stocks finished higher again on Thursday as investors bet that Democrat Joe Biden will win the US election, and after the Bank of England announced a bigger-than-expected boost to its bond-buying programme.
The FTSE 100 was up 0.39% at 5,915.08.
Bank kept interest rates on hold at a record low of 0.1%, as expected, but boosted its bond-buying programme as it warned of a double-dip recession, just as England heads into its second national lockdown.
The Monetary Policy Committee said it will inject an extra £150bn into the economy - taking the total to £875bn - as it cautioned the lockdown will shrink the economy in the current quarter, leading to a double-dip recession. All nine policymakers voted unanimously to keep rates on hold and boost quantitative easing. Analysts had been expecting a £100bn increase to QE.
"Announcing further asset purchases now should support the economy and help to ensure the unavoidable near-term slowdown in activity was not amplified by a tightening in monetary conditions that could slow the return of inflation to the target," the Bank said.
The BoE also said the economy won't return to its pre-pandemic size until 2022.
IG analyst Chris Beauchamp said: "Stock markets continue to take the US election in a positive frame of mind, and with the BoE throwing more QE into the fray, the second central bank to do so in a week, the outlook for stocks continues to brighten.
"Last week’s selloff looks more and more like pre-election jitters, a bout of nervousness that has been reversed even more swiftly than it appears. It is true that the US election is yet to be officially decided, but Biden seems likely to cross the 270 vote threshold in coming days, potentially rendering Trump’s legal challenges irrelevant, and with this bump in the road removed, stock markets can rally once more."
In equity markets, home emergency repairs company Homeserve was the standout gainer on the FTSE 100 after Credit Suisse resumed coverage of the stock at 'outperform'.
Housebuilder Persimmon advanced as JPMorgan Cazenove said recent weakness provides a buying opportunity ahead of the trading update next week.
TI Fluid Systems, Tate & Lyle, Inchcape, Trainline and Biffa were all on the front foot after well-received updates.
On the downside, Sainsburys lost ground after saying it was axing up to 3,500 jobs as part of a shakeup of its fresh fish and meat counters and Argos stores, while reporting a 6.9% rise in first-half retail sales. The group reported a loss before tax of £137m, reflecting £438m in one-off costs associated with the closure of 120 Argos stores.
Industrial thread maker Coats Group was weaker after a downgrade to ‘hold’ by HSBC.
Market Movers
FTSE 100 (UKX) 5,906.18 0.39%
FTSE 250 (MCX) 17,928.53 0.74%
techMARK (TASX) 3,755.60 -0.05%
FTSE 100 - Risers
RSA Insurance Group (RSA) 670.00p 45.75%
Homeserve (HSV) 1,250.00p 7.39%
Polymetal International (POLY) 1,831.00p 4.33%
Persimmon (PSN) 2,565.00p 3.93%
Informa (INF) 460.10p 3.86%
Whitbread (WTB) 2,380.00p 3.66%
InterContinental Hotels Group (IHG) 4,229.00p 3.63%
WPP (WPP) 653.00p 3.42%
Relx plc (REL) 1,677.50p 3.36%
Standard Chartered (STAN) 366.70p 3.32%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 74.52p -11.18%
Aveva Group (AVV) 4,168.00p -5.77%
Sainsbury (J) (SBRY) 198.00p -5.22%
BP (BP.) 200.65p -3.88%
British American Tobacco (BATS) 2,500.00p -2.97%
Lloyds Banking Group (LLOY) 27.72p -2.79%
Imperial Brands (IMB) 1,237.50p -2.64%
BAE Systems (BA.) 431.70p -2.37%
Royal Dutch Shell 'A' (RDSA) 1,007.80p -2.33%
Royal Dutch Shell 'B' (RDSB) 967.10p -2.18%
FTSE 250 - Risers
Trainline (TRN) 307.20p 12.53%
TI Fluid Systems (TIFS) 211.90p 9.24%
Inchcape (INCH) 568.50p 6.56%
ITV (ITV) 80.12p 6.32%
Vivo Energy (VVO) 81.70p 5.97%
Frasers Group (FRAS) 395.00p 5.05%
Hochschild Mining (HOC) 248.40p 4.81%
Pantheon International (PIN) 2,260.00p 4.39%
Wizz Air Holdings (WIZZ) 3,620.00p 3.67%
Just Group (JUST) 43.42p 3.58%
FTSE 250 - Fallers
Cairn Energy (CNE) 138.60p -3.75%
Fisher (James) & Sons (FSJ) 1,080.00p -3.57%
Coats Group (COA) 60.20p -3.53%
888 Holdings (888) 271.00p -3.37%
UDG Healthcare Public Limited Company (UDG) 752.50p -2.84%
CLS Holdings (CLI) 193.00p -2.72%
Crest Nicholson Holdings (CRST) 259.80p -2.33%
Virgin Money UK (VMUK) 101.25p -2.32%
IWG (IWG) 259.20p -2.26%
GCP Infrastructure Investments Ltd (GCP) 106.80p -2.20%