London close: UK stocks jump to four-month high as ECB unveils QE plan

News of a massive bond-buying plan by the European Central Bank (ECB) sent UK stocks to a four-month high on Thursday, as policymakers failed to disappoint with stimulus measures to revive the struggling Eurozone economy.

London's FTSE 100 finished the session up 1%, gaining 68.59 points to 6,796.63. The index has not closed above this level since 19 September 2014 when it settled at 6,837.92.

"European stocks and bonds rallied as the ECB finally came through after months of promises and delivered a quantitative easing (QE) programme that is bigger than expected to attack the curse of deflation in the Eurozone," said analyst Jasper Lawler from CMC Markets UK.

"There were some fears of under-delivery heading into the press conference but those were quickly dissolved," he said.

ECB president Mario Draghi unveiled QE totalling €1.1trn, with the purchase of €60bn-worth of private and public securities each month until September 2016, slightly ahead of investors' expectations.

The news sent the euro to a fresh 11-year low against the dollar, while bond in the Eurozone periphery dropped sharply.

Yoram Lustig, at fund manager at AXA Investment Managers, said the news was the "long-awaited bazooka from the ECB", but expected equity markets range bound in the month ahead, "oscillating between fear and hope".

Royal Mail and miners lead the rise

Royal Mail was a high riser after saying it expects to meet full-year forecasts following a “busy festive period” with parcel numbers up 4% at 120m in December alone, though competition in the parcel market held back revenue growth.

Mining stocks were also in demand as risk appetite increased following the ECB announcement. Anglo American, BHP Billiton, Glencore and Rio Tinto were all putting in decent gains.

Oil and gas producers were higher despite the dip in crude prices, with Norstrum Oil & Gas, Soco International, BP and Shell on the rise.

Financials Shroders, Aberdeen Asset Management, Old Mutual, Ashmore and RSA Insurance were also advancing, with RSA being lifted by an upgrade by Credit Suisse to 'outperform'.

Shares in Oxford Instruments plunged nearly 27% after the nanotechnology group said second-half revenues will “fall short of market expectations” due to tightening sanctions against Russia and a slower recovery from Japan.

Card Factory dropped sharply after a pre-close trading update underwhelmed. Sales at the UK greeting cards and gifts retailer rose 8.1% year-on-year over the 11 months to end-December, in line with forecasts, though investors took profits following a steady rise in the stock since its flotation last May.

Property services firm Countrywide fell after saying that despite record results for 2014 it experienced a "significant deceleration of market growth" during the course of the year.

Market Movers
techMARK 3,067.54 +0.15%
FTSE 100 6,796.63 +1.02%
FTSE 250 16,378.94 +0.77%

FTSE 100 - Risers
Smiths Group (SMIN) 1,136.00p +4.99%
Schroders (SDR) 2,832.00p +4.16%
easyJet (EZJ) 1,710.00p +3.83%
3i Group (III) 457.80p +3.60%
Royal Mail (RMG) 445.80p +3.55%
RSA Insurance Group (RSA) 466.80p +3.32%
Aberdeen Asset Management (ADN) 441.50p +3.20%
BAE Systems (BA.) 518.00p +3.19%
WPP (WPP) 1,479.00p +3.14%
Tesco (TSCO) 235.85p +2.99%

FTSE 100 - Fallers
Dixons Carphone (DC.) 430.70p -2.07%
Shire Plc (SHP) 4,714.00p -1.75%
Fresnillo (FRES) 915.00p -1.03%
SABMiller (SAB) 3,408.00p -0.99%
Aggreko (AGK) 1,547.00p -0.96%
SSE (SSE) 1,490.00p -0.93%
Standard Life (SL.) 402.00p -0.72%
Marks & Spencer Group (MKS) 469.60p -0.70%
Next (NXT) 7,010.00p -0.64%
AstraZeneca (AZN) 4,689.50p -0.47%

FTSE 250 - Risers
Evraz (EVR) 175.10p +10.82%
Nostrum Oil & Gas (NOG) 551.50p +9.21%
Vedanta Resources (VED) 469.60p +7.36%
Soco International (SIA) 278.20p +7.21%
Playtech (PTEC) 698.00p +7.14%
NMC Health (NMC) 508.00p +6.95%
CLS Holdings (CLI) 1,540.00p +6.94%
Bank of Georgia Holdings (BGEO) 2,068.00p +6.65%
Ashmore Group (ASHM) 284.10p +6.40%
Hunting (HTG) 499.90p +6.36%

FTSE 250 - Fallers
Oxford Instruments (OXIG) 795.00p -27.73%
Card Factory (CARD) 256.20p -7.07%
Afren (AFR) 20.00p -4.76%
Countrywide (CWD) 414.00p -3.99%
Zoopla Property Group (WI) (ZPLA) 150.80p -3.46%
Saga (SAGA) 161.50p -3.24%
Interserve (IRV) 495.90p -3.05%
Telecom Plus (TEP) 1,094.00p -2.84%
Workspace Group (WKP) 770.00p -2.72%
Premier Oil (PMO) 145.40p -2.48%