London close: UK stocks settle at 2015 high as market awaits ECB decision

London’s FTSE 100 eked out a gain of 0.5% on Monday in the absence of US trading, as investors took advantage of a quiet news day to push stocks to their highest levels of the year

The Footsie finished 35.26 points higher at 6,585.53, its best finish since 29 December 2014 when it settled at 6,633.50.

Nevertheless, with Wall Street closed for Martin Luther King Jr Day and the economic data calendar on the thin side, markets were relatively subdued ahead of a pivotal European Central Bank (ECB) meeting on Thursday.

“Monday’s caution comes ahead of the key policy meeting from the European Central Bank where many have ECB President Mario Draghi pegged to announce full-blown quantitative easing to resuscitate the Eurozone economy,” said Jasper Lawler from CMC Markets.

Aside from the ECB, a general election also looms in Greece on Sunday with politicians entering their final week of campaigning, as the support for anti-austerity party Syriza continues to grow.

Meanwhile, stocks in Shanghai plunged nearly 8% on Monday with shares in the financial sectors faring the worst after securities regulators said many brokerage firms had broken stricter rules on margin trading.

Margin finance involves the borrowing of money to buy stocks, something which the government is concerned will lead to instability after record margin lending resulted in a 63% surge in equity values over the past six months.

Fears about slowing growth in China were also in focus ahead of data on Tuesday which is forecast to show that the world’s top metals user expanded by just 7.2% in the fourth quarter. This would indicate the slowest rate of gross domestic product growth since the height of the financial crisis.

There is speculation that Premier Li Keqiang could lower the 2015 forecast for expansion after being cited as saying that China’s economy faces significant downward pressure this year.

Mining stocks drop, retailers gain

Stocks in the heavyweight mining sector were lower, including Rio Tinto, Glencore, BHP Billiton and Anglo American, as concerns about a Chinese slowdown and falling metals prices weighed on shares.

Credit Suisse said in a note that the mining industry faces a “challenging” outlook for 2015 and “deflationary trends” could put dividend security under pressure.

Heading the other way were the retailers ahead of a raft of Christmas updates from high street names this week. Dixons Carphone, due to report on Wednesday, was leading the risers on the FTSE 100. AO World, Ted Baker and Kingfisher were also on the rise.

Grocery giant Tesco was also making gains after Morgan Stanley upgraded the stock to ‘overweight’ and hiked its target price for the supermarket stock to 260p from 155p. "We believe Tesco has sufficient firepower and self-help to improve meaningfully the competitiveness of its UK customer proposition," it said.

Takeover target Afren was weaker after the company agreed to a 11-day extension to the deadline for Nigerian group Seplat to return to the table with a possible offer. The latter approached the FTSE 250 oil group last month about a potential tie-up and now has until 17:00 on 30 January to ‘put up or shut up’.

Infrastructure firm Balfour Beatty rose after having been appointed sole contractor to a new £1.5bn framework that will run until February 2019. The national framework is operated by public sector-owned environment specialist Scape Group.

Market Movers
techMARK 3,021.43 +0.88%
FTSE 100 6,585.53 +0.54%
FTSE 250 16,067.19 +0.91%

FTSE 100 - Risers
Dixons Carphone (DC.) 446.50p +4.44%
Coca-Cola HBC AG (CDI) (CCH) 1,122.00p +4.18%
Travis Perkins (TPK) 1,852.00p +3.81%
CRH (CRH) 1,557.00p +3.25%
Kingfisher (KGF) 327.80p +3.08%
ARM Holdings (ARM) 1,017.00p +2.73%
GKN (GKN) 365.50p +2.70%
Persimmon (PSN) 1,487.00p +2.62%
Barclays (BARC) 230.00p +2.52%
Babcock International Group (BAB) 1,033.00p +2.48%

FTSE 100 - Fallers
Glencore (GLEN) 247.70p -1.92%
BHP Billiton (BLT) 1,368.00p -1.44%
Rio Tinto (RIO) 2,856.00p -1.13%
BP (BP.) 408.90p -1.08%
Fresnillo (FRES) 876.00p -0.96%
Anglo American (AAL) 1,089.50p -0.91%
Unilever (ULVR) 2,729.00p -0.66%
Morrison (Wm) Supermarkets (MRW) 191.50p -0.62%
Smiths Group (SMIN) 1,082.00p -0.55%
SSE (SSE) 1,489.00p -0.53%

FTSE 250 - Risers
Ted Baker (TED) 2,400.00p +4.99%
esure Group (ESUR) 233.50p +4.71%
SIG (SHI) 173.30p +4.27%
Infinis Energy (INFI) 191.60p +4.24%
Hays (HAS) 150.50p +4.15%
Hunting (HTG) 462.40p +4.12%
AO World (AO.) 267.50p +4.09%
Premier Oil (PMO) 146.30p +4.05%
Computacenter (CCC) 640.00p +3.90%
Wetherspoon (J.D.) (JDW) 830.50p +3.81%

FTSE 250 - Fallers
Afren (AFR) 27.65p -6.90%
Fidelity China Special Situations (FCSS) 135.00p -3.85%
Jimmy Choo (CHOO) 167.00p -3.24%
Card Factory (CARD) 272.00p -2.68%
BlackRock World Mining Trust (BRWM) 308.00p -2.13%
Fisher (James) & Sons (FSJ) 1,038.00p -2.08%
Vedanta Resources (VED) 397.00p -2.07%
Brit (BRIT) 252.00p -1.87%
TSB Banking Group (TSB) 269.00p -1.79%
Soco International (SIA) 258.00p -1.19%