London close: Stocks inch higher as May stops pound plunge
London's blue chip benchmark erased modest earlier losses to mostly close Monday's session in the green, in what was a day of thin trading volumes and newsflow in the week leading up to Christmas.
The FTSE 100 ended just over five points higher at 7,017.16, while its was around two points in the red by the closing bell. Meanwhile, oil prices were mixed, with West Texas Intermediate up 0.02% at $51.91 a barrel and Brent crude down 0.51% at $54.93.
There was pressure on sterling after a Deutsche Bank note said it looks expensive when set against the cocktail of political risks and diverging interest rates. The pound was down 0.8% to $1.24 and 0.3% lower at €1.1915.
But some analysts felt Prime Minister Theresa May helped prevent an even bigger drop in the pound as she indicated the UK could continue to pay into the EU budget if it represents good value for money.
"It was just a small line in a wide-ranging response to a question from Jeremy Corbyn about the government’s Brexit negotiations, but it has nevertheless been seized upon by traders," said Neil Wilson at ETX. "Her soft Brexit message seemed to reassure markets that the UK economy is not heading towards the much-feared cliff edge and that has put a bit of a floor under cable for the moment."
Bank stocks were among the main fallers in the blue chip index, as beleaguered Italian lender Banca Monte dei Paschi di Siena tanked and Barclays, amid reports emerged it was looking to offload up to as many as 7,000 less profitable clients unless they boosted their trading levels.
“Italy’s oldest bank sparked another round of hand-wringing after being forced to turn to shareholders as it tries to raise €5bn to avoid a taxpayer bailout," said Connor Campbell at Spreadex.
“This news was poorly received by investors, the stock falling 8.5% at the open to trigger a trading suspension and a general sense of unease among its banking peers.”
CMC's Lawler also noted that Germany’s Deutsche Bank was axing bonuses in order to set aside funds for its upcoming US Department of Justice fine, which was also weighing on sector sentiment as it was a gloomy reminder that the legacy problems of Germany’s biggest bank remain a significant and industry-wide concern.
In other corporate news, BP edged higher after signing an agreement to take a 10% stake in Abu Dhabi's ADCO onshore oil concession for an undisclosed sum. BP also said on Monday that it will invest nearly $1bn in a natural gas field off the coast of West Africa as it struck a deal with Kosmos Energy.
Drax powered ahead after the European Commission approved Britain’s plans to support the conversion of a unit of the company’s power plant to biomass from coal.
Electra Private Equity was in the black as it said it will receive roughly £405m proceeds from the £1.35bn sale of Parkdean Resorts to Canadian investors Onex Corporation.
Investment manager Brewin Dolphin nudged up after announcing that it will buy Duncan Lawrie Asset Management for £25.5m along with a payment of £2.5m, to reflect the value of net assets in the business.
Outsourcer Capita was a high riser after the BBC extended its existing TV licence collections partnership with the company for a further two years until June 2022.
On the downside, having hit £16 for the first time ever earlier this month, Ashtead Group's shares were big fallers after a downgrade by UBS.
Ahead of its result on Tuesday, Carnival shares took on water as Berenberg downgraded its stance on the cruise operator to ‘hold’ from ‘buy’ and cut the price target to 4,000p from 4,200p.
FTSE 250 intellectual property-based business developer IP Group retreated as it announced the creation of Microbiotica, which it described as a newly formed spin-out company from the Wellcome Trust Sanger Institute established to commercialise the institute's research into the role of the human microbiome in disease.
Market Movers
FTSE 100 (UKX) 7,017.16 0.08%
FTSE 250 (MCX) 17,782.40 -0.01%
techMARK (TASX) 3,340.62 0.01%
FTSE 100 - Risers
Hikma Pharmaceuticals (HIK) 1,861.00p 3.85%
Reckitt Benckiser Group (RB.) 6,794.00p 2.72%
Randgold Resources Ltd. (RRS) 5,705.00p 2.33%
Capita (CPI) 501.00p 2.22%
Unilever (ULVR) 3,218.50p 2.11%
ITV (ITV) 200.00p 2.09%
Mediclinic International (MDC) 738.50p 1.86%
Imperial Brands (IMB) 3,553.00p 1.81%
Relx plc (REL) 1,414.00p 1.65%
Informa (INF) 681.50p 1.56%
FTSE 100 - Fallers
Ashtead Group (AHT) 1,534.00p -4.78%
Standard Chartered (STAN) 665.70p -2.82%
Barclays (BARC) 222.05p -2.67%
AstraZeneca (AZN) 4,303.50p -2.22%
Convatec Group (CTEC) 229.00p -2.14%
Royal Bank of Scotland Group (RBS) 223.10p -1.98%
Lloyds Banking Group (LLOY) 62.55p -1.93%
BHP Billiton (BLT) 1,282.00p -1.76%
Prudential (PRU) 1,560.00p -1.45%
Rio Tinto (RIO) 3,050.00p -1.34%
FTSE 250 - Risers
Drax Group (DRX) 351.10p 8.36%
NMC Health (NMC) 1,543.00p 6.49%
CMC Markets (CMCX) 114.70p 5.52%
Polypipe Group (PLP) 320.20p 4.25%
Paysafe Group (PAYS) 342.10p 4.11%
Entertainment One Limited (ETO) 229.10p 3.25%
Centamin (DI) (CEY) 119.80p 2.92%
Berendsen (BRSN) 838.50p 2.88%
Brewin Dolphin Holdings (BRW) 297.70p 2.58%
Greencore Group (GNC) 238.10p 2.45%
FTSE 250 - Fallers
Evraz (EVR) 213.00p -19.04%
OneSavings Bank (OSB) 342.10p -4.29%
Kaz Minerals (KAZ) 355.20p -3.87%
Tullow Oil (TLW) 305.90p -3.68%
Metro Bank (MTRO) 3,141.00p -3.32%
Hochschild Mining (HOC) 197.60p -2.95%
Paragon Group Of Companies (PAG) 399.10p -2.61%
BGEO Group (BGEO) 3,062.00p -2.27%
Wood Group (John) (WG.) 843.50p -2.20%
PayPoint (PAY) 926.50p -1.96%