London close: Stocks ride higher on Wall Street's coattails

London stocks followed their US peers higher after a strong start to the trading day on Wall Street that saw the S&P 500 and Nasdaq Composite push further into record territory.

By the closing bell, the FTSE 100 was up by 0.55% or 40.60 points at 7,430.91, while the pound was 0.3% firmer against the euro to 1.1314 and little changed against the US dollar at 1.3032.

For its part, the second-tier index advanced 0.41% or 80.55 points to 19,693.93.

Wall Street was moving higher on the back of a positive quarterly update out of investment bank Morgan Stanley, with investors showing little caution ahead of the European Central Bank's much-awaited policy meeting the next day.

That was despite the favourable tailwind afforded US stocks by recent gains in the single currency on the back of speculation that the ECB was set too soon signal a further tightening in policy, even if only very slightly.

Commenting on the situation, David Madden at CMC said: "Markets focus looks set to straddle both corporate and central banking considerations over the next 24-hours, as rate decisions from the BoJ and ECB are set against earnings figures from the likes of Microsoft, eBay, Premier Foods, and Anglo American.

"Today’s sell-off in the euro is no doubt an element of hesitancy in anticipation of what may come to fruition tomorrow. For all the likeliness that we will see the ECB hold off for another two months until laying out plans for a taper, the possibility of action tomorrow remains a key risk for markets."

On the corporate front, Reckitt Benckiser rallied as it agreed to sell its food business for $4.2bn (£3.2bn) to Schwartz spices owner McCormick.

Aviva rose as it agreed to sell Friends Provident International for £340m to RL360, a subsidiary of International Financial Group, while RPC Group surged as it unveiled a £100m share buyback and said first-quarter revenue was "well ahead" of last year.

Ashtead gained ground after saying its North American business, Sunbelt Rentals, has agreed to buy Canadian rental equipment provider CRS Contractors Rental Supply for an initial cash consideration of CAD275m.

Low-cost carrier Wizz Air flew higher as it reported a 15.6% jump in first-quarter pre-tax profit as revenue rose, partly thanks to a strong performance over Easter.

Shares in AA rose sharply as Barclays initiated coverage of the stock at 'overweight', while housebuilder Galliford Try was boosted by an initiation of coverage at 'buy' by Liberum.

Going the other way, water company Severn Trent nudged lower despite lifting its guidance for its business services division following the sale of its North American business, while GlaxoSmithKline slipped a touch amid reports the pharmaceuticals giant is looking to sell off its Horlicks business.

TalkTalk retreated as it said revenues in the three months to the end of June fell 3.2% as strong growth in its corporate and wholesale broadband revenues was offset by a drop in consumer revenues.

Drax slumped as it posted a statutory pre-tax loss of £83m for the first half of this year compared to a £184.2m profit in the same period last year, while BHP nudged down after a mixed production update.

Market Movers

FTSE 100 (UKX) 7,430.91 0.55%
FTSE 250 (MCX) 19,693.93 0.41%
techMARK (TASX) 3,513.87 0.29%

FTSE 100 - Risers

Sage Group (SGE) 690.00p 2.68%
Barratt Developments (BDEV) 609.50p 2.44%
Persimmon (PSN) 2,442.00p 2.35%
Intertek Group (ITRK) 4,329.00p 2.34%
Taylor Wimpey (TW.) 186.00p 2.20%
TUI AG Reg Shs (DI) (TUI) 1,193.00p 2.14%
Micro Focus International (MCRO) 2,220.00p 2.12%
Lloyds Banking Group (LLOY) 68.08p 1.76%
Ashtead Group (AHT) 1,659.00p 1.72%
Pearson (PSON) 640.50p 1.67%

FTSE 100 - Fallers

Royal Mail (RMG) 399.80p -2.75%
Paddy Power Betfair (PPB) 7,610.00p -2.06%
Kingfisher (KGF) 297.10p -1.62%
Mediclinic International (MDC) 733.00p -1.61%
Wolseley (WOS) 4,554.00p -1.00%
Worldpay Group (WPG) 375.00p -0.95%
Provident Financial (PFG) 2,319.00p -0.90%
Next (NXT) 3,680.00p -0.86%
Fresnillo (FRES) 1,514.00p -0.79%
Royal Bank of Scotland Group (RBS) 249.80p -0.44%

FTSE 250 - Risers

Thomas Cook Group (TCG) 99.90p 5.44%
Softcat (SCT) 393.60p 4.67%
Galliford Try (GFRD) 1,328.00p 4.65%
RPC Group (RPC) 880.00p 4.45%
CLS Holdings (CLI) 209.50p 3.96%
AA (AA.) 242.30p 3.90%
JD Sports Fashion (JD.) 354.40p 3.78%
SIG (SHI) 158.30p 3.33%
Wizz Air Holdings (WIZZ) 2,671.00p 3.21%
Euromoney Institutional Investor (ERM) 1,101.00p 3.15%

FTSE 250 - Fallers

QinetiQ Group (QQ.) 248.20p -9.55%
Spire Healthcare Group (SPI) 342.90p -4.72%
Carillion (CLLN) 68.00p -3.68%
Drax Group (DRX) 333.20p -3.56%
Tullow Oil (TLW) 157.00p -3.03%
Hunting (HTG) 488.30p -2.92%
Evraz (EVR) 232.80p -2.31%
Hikma Pharmaceuticals (HIK) 1,353.00p -2.24%
Mitie Group (MTO) 275.20p -2.06%
BGEO Group (BGEO) 3,452.00p -1.74%