London close: Stocks finish higher on hopes for Brexit, US stimulus

London stocks finished in positive territory on Wednesday, with sentiment underpinned by Brexit hopes and US stimulus progress.

The FTSE 100 ended the session up 0.88% at 6,570.91, and the FTSE 250 advanced 1.23% to 20,096.56.

Sterling was in the green as well, last rising 0.29% on the dollar to $1.3499, and advancing 0.03% against the euro to €1.1081.

“European markets have continued in positive territory during the afternoon, but US indices are more mixed, remaining cautious in advance of the Fed meeting, but hoping that a stimulus deal can be cobbled together before Christmas,” said IG chief market analyst Chris Beauchamp.

“Reports suggest a deal in the region of $900bn will be agreed, and while this is well down on the estimates from earlier in the autumn, investors will have to be content with this progress, which at least represents a commitment to support ordinary citizens and the US economy.

“A stimulus deal would represent almost the final piece of the puzzle for the year, and hope of such a deal has certainly provided the foundation for gains over the past two sessions.”

The rosy sentiment was ignited by remarks from EU Commission president Ursula von der Leyen, said there had been progress in trade talks and that the next few days would be critical.

Speaking in Brussels, she said there was now "a path to an agreement", with the two sides having found a way forward on most issues, although the issues of the level playing field and fisheries remained outstanding.

There were also reports the UK had dropped its push for the renationalising of fishing vessels.

In addition, market participants were betting on further US stimulus by the end of the year after a group of Democratic and Republican leaders met on Tuesday night to reach an agreement on a new bill proposal.

Senate Majority Leader Mitch McConnell said the group agreed lawmakers wouldn’t leave Washington for the holidays without a deal on stimulus.

On home shores, the latest figures from the Office for National Statistics showed inflation slowed sharply in November as the price of clothing, food and non-alcoholic drinks declined, with Black Friday playing its part.

Consumer price inflation fell to 0.3% from 0.7% in October, coming in below consensus expectations of 0.6%.

“With significant restrictions in place across the UK, inflation slowed, predominantly due to clothing and food prices,” said ONS deputy national statistician for Economic Statistics, Jonathan Athow.

“Also, after several months of buoyant growth, second-hand car prices fell back a little.”

The biggest downward contribution came from clothing and footwear, which saw prices fall 2.6% between October and November, compared to a 1% increase in the same period a year ago.

The ONS said prices usually rise between the two months, but price movements across 2020 had been unusual compared with previous years, and appeared to have been affected by the coronavirus lockdowns.

This year, the decline reflected increased discounting and Black Friday discounts lasting longer than usual.

In equity markets, housebuilders gained amid Brexit hopes, with Barratt Developments up 4.64%, Persimmon ahead 1.88%, and Taylor Wimpey rising 2.33%.

British Airways and Iberia owner IAG was up 2.12%, and budget airline easyJet flew 1.7% higher, even as the Competition and Markets Authority said it would investigate whether airlines broke the law by refusing refunds on flights passengers could not take due to the pandemic.

Dixons Carphone rallied 12.34% after it said trading was strong in the runup to Christmas despite store closures as the electricals retailer reported surging online sales.

The company swung to a pre-tax profit of £45m for the six months to the end of October from a loss of £86m a year earlier as revenue rose 3% to £4.86bn.

Adjusted pre-tax profit surged to £89m from £2m.

Builders’ merchant Travis Perkins was ahead 2.23% after it reported an 8.6% rise in like-for-like sales in October and November amid "strong" demand in the DIY market, and said it will repay the business rates relief it received for the Covid-19 crisis.

On the downside, Bunzl lost 3.68% after the distribution and services group forecast revenue growth of 8% in 2020, but lower growth next year as larger Covid-19 related orders slowed down.

Petrofac was in the red by 5.64% after increasing its target for cost cuts as the oil field services company said it was trading in line with expectations in uncertain conditions.

Market Movers

FTSE 100 (UKX) 6,570.91 0.88%
FTSE 250 (MCX) 20,096.56 1.23%
techMARK (TASX) 4,084.26 0.97%

FTSE 100 - Risers

M&G (MNG) 199.60p 4.75%
Barratt Developments (BDEV) 648.60p 4.41%
JD Sports Fashion (JD.) 845.00p 3.73%
Hargreaves Lansdown (HL.) 1,501.50p 3.66%
Tesco (TSCO) 231.80p 3.57%
SEGRO (SGRO) 940.00p 3.52%
Auto Trader Group (AUTO) 587.00p 3.45%
Royal Dutch Shell 'B' (RDSB) 1,358.40p 3.35%
Avast (AVST) 525.00p 3.35%
Admiral Group (ADM) 2,947.00p 3.33%

FTSE 100 - Fallers

Bunzl (BNZL) 2,385.00p -3.68%
Standard Chartered (STAN) 470.50p -1.94%
HSBC Holdings (HSBA) 397.00p -1.40%
Compass Group (CPG) 1,416.50p -1.36%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,758.00p -1.30%
Mondi (MNDI) 1,796.00p -1.10%
Smurfit Kappa Group (SKG) 3,442.00p -1.09%
InterContinental Hotels Group (IHG) 4,670.00p -1.06%
Smith (DS) (SMDS) 375.10p -1.03%
Rio Tinto (RIO) 5,549.00p -0.96%

FTSE 250 - Risers

Dixons Carphone (DC.) 122.00p 12.34%
Airtel Africa (AAF) 79.70p 8.29%
Henderson Smaller Companies Inv Trust (HSL) 1,024.00p 6.22%
AO World (AO.) 394.50p 5.62%
Capital & Counties Properties (CAPC) 150.40p 5.10%
Mercantile Investment Trust (The) (MRC) 231.50p 4.99%
OSB Group (OSB) 403.20p 4.95%
Apax Global Alpha Limited (APAX) 191.00p 4.95%
Shaftesbury (SHB) 560.50p 4.86%
Aston Martin Lagonda Global Holdings (AML) 1,706.40p 4.80%

FTSE 250 - Fallers

Petrofac Ltd. (PFC) 162.60p -5.96%
Capita (CPI) 41.20p -4.19%
Network International Holdings (NETW) 284.40p -3.98%
National Express Group (NEX) 240.20p -2.28%
Micro Focus International (MCRO) 431.90p -2.20%
Indivior (INDV) 100.40p -1.86%
TBC Bank Group (TBCG) 1,194.00p -1.65%
Helios Towers (HTWS) 141.40p -1.53%
Babcock International Group (BAB) 295.00p -1.37%
Trainline (TRN) 465.00p -1.36%