London midday: Stocks rise on UK retail sales, Fed decision

London stocks rallied as UK retail sales figures beat forecasts and as the Federal Reserve hiked interest rates for the first time in nearly a decade.

UK retail sales rose 1.7% in November from October, beating economists’ expectations for a 0.5% increase as shoppers made the most of ‘Black Friday’ bargains.

Sales on the year also comfortably beat estimates, up 5% versus expectations for a 3% rise.

“There are two things you need for a strong economy, spending and lending, and it seems that the first one is looking very healthy as the year comes to an end,” said James Hughes, chief market analyst at GKFX.

Meanwhile, investors continued to digest the Fed’s decision to raise interest rates for the first time in nearly a decade on Wednesday evening by 25 basis points to 0.50%, as expected by analysts.

Speaking at a press conference after the policy announcement Yellen assured the market that any future interest rate hikes would be gradual.

Yellen said if the Fed had continued to delay a rate rise it could have been forced to implement a more aggressive increase if economic growth soared and inflation suddenly jumped towards the 2% target.

“Overall, we believe Fed and Chair Janet Yellen succeeded in being neither too hawkish nor too dovish, which is reflected in the muted market reaction,” according to Dankse Bank analysts.

“We stick to our view that the Fed will hike three times in 2016 and four in 2017.”

In Germany, business confidence fell unexpectedly in December, according to the IFO. The business climate index fell to 108.7 from 109 in November.

Still to come, the US will see its weekly jobless claims data at 1330 GMT. Economists predict an increase to 274,000 in the week to 12 December from 282,000 the previous week.

On the company front, Astrazeneca rallied as it announced it would acquire a 55% stake in Acerta Pharma over its oncology treatment – a deal valued at $4bn (£2.7bn).

The London Stock Exchange Group was a high riser after saying equity capital raisings were down 2% to £40bn in 2015 due to “more challenging market conditions”. New issues were down to 161 new issues from 193 last year.

EntertainmentOne jumped after extending its output agreement with DreamWorks Pictures through the creation of a new partnership.

Elementis slumped after warning that 2015 earnings would be at the lower end of market expectations.

Market Movers

FTSE 100 (UKX) 6,150.79 1.48%
FTSE 250 (MCX) 17,213.42 0.81%
techMARK (TASX) 3,186.65 1.29%

FTSE 100 - Risers

Standard Chartered (STAN) 552.70p 7.80%
Old Mutual (OML) 176.10p 6.73%
Sainsbury (J) (SBRY) 260.00p 4.75%
Smith & Nephew (SN.) 1,136.00p 4.60%
Inmarsat (ISAT) 1,123.00p 3.50%
Morrison (Wm) Supermarkets (MRW) 152.00p 3.26%
Mondi (MNDI) 1,351.00p 3.21%
International Consolidated Airlines Group SA (CDI) (IAG) 602.50p 2.99%
Tesco (TSCO) 152.30p 2.91%
Royal Bank of Scotland Group (RBS) 297.80p 2.76%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 3,540.00p -5.78%
Barratt Developments (BDEV) 608.00p -0.98%
Taylor Wimpey (TW.) 196.50p -0.81%
Persimmon (PSN) 1,940.00p -0.61%
Marks & Spencer Group (MKS) 458.70p -0.33%
Next (NXT) 7,430.00p -0.20%
Reckitt Benckiser Group (RB.) 6,170.00p -0.11%
Royal Mail (RMG) 444.60p 0.14%
Travis Perkins (TPK) 1,955.00p 0.15%
Sage Group (SGE) 588.00p 0.17%

FTSE 250 - Risers

Investec (INVP) 483.90p 6.82%
Entertainment One Limited (ETO) 179.30p 5.04%
Tullett Prebon (TLPR) 360.50p 4.80%
OneSavings Bank (OSB) 376.00p 4.53%
Jimmy Choo (CHOO) 121.10p 4.40%
Man Group (EMG) 167.10p 4.11%
Henderson Group (HGG) 301.30p 3.15%
Murray International Trust (MYI) 828.00p 2.92%
Spire Healthcare Group (SPI) 310.10p 2.92%
Drax Group (DRX) 233.20p 2.78%

FTSE 250 - Fallers

Elementis (ELM) 222.20p -6.13%
Marston's (MARS) 162.10p -4.42%
Premier Oil (PMO) 47.30p -3.72%
AO World (AO.) 155.00p -3.13%
Halfords Group (HFD) 327.80p -2.93%
Supergroup (SGP) 1,654.00p -2.71%
Aveva Group (AVV) 1,553.00p -2.57%
Allied Minds (ALM) 395.00p -2.45%
Auto Trader Group (AUTO) 439.70p -2.20%
Acacia Mining (ACA) 164.30p -1.68%