London close: Stocks rise as Carney defends stimulus measures

The FTSE 100 ended higher on Wednesday as Bank of England Governor Mark Carney defended the central bank’s decision to boost stimulus measures.

Carney was questioned by a panel of lawmakers on the Treasury Select Committee on whether the Bank was too aggressive with policy following the UK’s vote to leave.

The BoE last month decided to cut interest rates to 0.25% and increase its asset purchases.

However, since the policy decision data has shown recovery in UK's services, manufacturing and construction industries.

"I absolutely feel comfortable in the decision that I supported and the committee took in August to supply monetary policy stimulus," Carney said.

He added that he was "absolutely serene" about the Bank's preparations for the impact from the Brexit vote.

Carney also said there was scope for further stimulus if needed.

IG market analyst Joshua Mahony said: “While the devaluation of the pound has arguably been the biggest post-referendum stimulant, today’s hearings at least provided the markets with confidence that the MPC are unlikely to pull back despite improvements.”

Elsewhere, UK industrial and manufacturing data was also in focus. UK industrial production rose 0.1% on the month in July, according to the Office for National Statistics, beating expectations for a 0.2% decline.

In contrast, manufacturing output declined 0.9% in July, worse than the 0.3% fall anticipated by economists.

The pound weakened against the dollar in response to the data, falling 0.63% to $1.3355.

Meanwhile, Prime Minister Theresa May said she would not give a “running commentary” on Brexit negotiations and “reveal our hand prematurely” to the EU. At the first Prime Minister’s Questions (PMQs) since the summer recess, May refused to say whether the country will stay in the European single market.

On the corporate front, shares in industrial equipment rental company Ashtead Group advanced after it said revenue increased as it benefited from weak sterling in the first quarter, while it expects full-year results to be ahead of expectations.

SSE was boosted by an upgrade to ‘buy’ at Bank of America Merrill Lynch, while Randgold Resources gained as Berenberg initiated coverage of the stock at ‘hold’.

Housebuilders were under the cosh, led lower by Barratt Developments following the release of results for the year to 30 June. Barratt said total completions rose 5.3% to 17,319, revenue was up 12.7% to £4.24bn and profit from operations grew 15.9% to £668.4m.

Shares in payments processor Worldpay slumped on as it emerged that private equity firms Advent International and Bain Capital LLP sold a bigger-than-expected stake in the company through their Ship Global 2 & Cy SCA vehicle.

Aerospace and defence group Rolls-Royce slid after Exane BNP Paribas downgraded the stock to ‘underperform’ from ‘neutral’ with an unchanged price target of 530p, citing little valuation support versus peers.

Market Movers

FTSE 100 (UKX) 6,846.58 0.30%
FTSE 250 (MCX) 18,060.24 0.32%
techMARK (TASX) 3,473.00 0.54%

FTSE 100 - Risers

Ashtead Group (AHT) 1,300.00p 3.34%
Royal Dutch Shell 'B' (RDSB) 1,976.00p 1.93%
Antofagasta (ANTO) 511.50p 1.89%
Royal Dutch Shell 'A' (RDSA) 1,896.00p 1.83%
International Consolidated Airlines Group SA (CDI) (IAG) 406.00p 1.78%
Glencore (GLEN) 186.30p 1.66%
Aviva (AV.) 441.90p 1.66%
Randgold Resources Ltd. (RRS) 7,735.00p 1.64%
Anglo American (AAL) 840.20p 1.62%
SSE (SSE) 1,568.00p 1.49%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 2,698.00p -3.05%
Barratt Developments (BDEV) 492.20p -2.92%
Taylor Wimpey (TW.) 159.50p -2.51%
Worldpay Group (WI) (WPG) 287.40p -2.38%
Persimmon (PSN) 1,832.00p -2.03%
Mediclinic International (MDC) 997.50p -1.92%
TUI AG Reg Shs (DI) (TUI) 1,027.00p -1.82%
Severn Trent (SVT) 2,410.00p -1.55%
Dixons Carphone (DC.) 374.20p -1.55%
Carnival (CCL) 3,398.00p -1.31%

FTSE 250 - Risers

Vectura Group (VEC) 143.20p 12.84%
Metro Bank (MTRO) 2,645.00p 6.44%
Weir Group (WEIR) 1,614.00p 4.53%
Drax Group (DRX) 319.10p 3.84%
Shawbrook Group (SHAW) 238.00p 3.84%
OneSavings Bank (OSB) 270.20p 3.80%
Paragon Group Of Companies (PAG) 322.50p 3.20%
Vedanta Resources (VED) 518.00p 3.19%
Morgan Advanced Materials (MGAM) 301.90p 3.04%
Evraz (EVR) 137.00p 3.01%

FTSE 250 - Fallers

CMC Markets (CMCX) 243.00p -12.31%
Sports Direct International (SPD) 319.30p -8.67%
Just Eat (JE.) 538.50p -5.44%
Thomas Cook Group (TCG) 71.65p -4.21%
IG Group Holdings (IGG) 912.00p -3.33%
Redrow (RDW) 407.00p -2.89%
Softcat (SCT) 326.00p -2.40%
Synthomer (SYNT) 359.90p -2.22%
Ascential (ASCL) 260.00p -2.11%
Marshalls (MSLH) 297.60p -2.00%