London open: Stocks gain after ECB stimulus boost

UK stocks rallied on Friday as investors continued to digest the European Central Bank’s bigger-than-anticipated stimulus package.

The ECB took more action than expected on Thursday to help bring inflation back towards the target of just below 2%.

The ECB unexpectedly slashed its main interest rate by 5 basis points (bps) to 0.00% and increased quantitative easing (QE) by €20bn. The monthly purchases under the asset purchase programme will be expanded to €80bn starting in April. The market had priced in a €10bn increase.

The ECB also cut the deposit facility rate by 10bps to -0.40%, but the move was expected.

The decision to lower the marginal lending facility rate to 0.25% from 0.30%, however, was not anticipated.

Another surprise was that investment grade bonds issued by non-bank corporations will be included in the list of assets for regular purchases.

“Following yesterday’s wild, oil and Draghi-inspired, trading the European markets seem to have slept on the ECB stimulus package and decided it wasn’t so bad after all, swiftly lifting away from the month lows hit at Thursday’s close,” said Connor Campbell, financial analyst at Spreadex.

An increase in oil price also provided a boost to the FTSE 100, with Brent crude rising 1.5% to $40.67 per barrel and West Texas Intermediate increasing 1.9% to $38.60 per barrel at 0850 GMT.

On Friday’s economic calendar it will be relatively quiet with the only notable release being data on UK trade and construction output.

In company news, Old Mutual’s shares fell as the company said it will separate its four underlying businesses - Old Mutual Emerging Markets (OMEM), Nedbank, Old Mutual Wealth (OMW) and OM Asset Management (OMAM). The group also reported annual revenue fell 12% to £13.7bn and adjusted pre-tax operating profit rose 4% to £1.7bn, although it was up 11% at constant exchange rates.

JD Wetherspoon shares climbed as the pub operator reported a 6.2% increase in first half revenue to £790.3m, and a 2.9% rise in like-for-like sales.

Aviva continued to gain a day after reporting a 20% increase in full year operating profit that was better than expected.

Computacenter slumped as it posted a 0.3% dip in full year revenue to £3.05bn, although it achieved a rise in adjusted pre-tax profit to £86.9 from £81.1m – a touch above consensus estimates.

Market Movers

FTSE 100 (UKX) 6,120.15 1.38%
FTSE 250 (MCX) 16,528.79 0.88%
techMARK (TASX) 3,087.44 0.99%

FTSE 100 - Risers

Aviva (AV.) 486.70p 4.49%
Barclays (BARC) 164.55p 2.91%
RSA Insurance Group (RSA) 445.40p 2.49%
Hargreaves Lansdown (HL.) 1,248.00p 2.38%
Land Securities Group (LAND) 1,048.00p 2.34%
Direct Line Insurance Group (DLG) 366.80p 2.29%
St James's Place (STJ) 873.00p 2.28%
Royal Bank of Scotland Group (RBS) 226.60p 2.21%
Standard Chartered (STAN) 458.20p 2.16%
Prudential (PRU) 1,348.00p 2.16%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 401.70p -1.23%
Old Mutual (OML) 184.30p -0.54%
Antofagasta (ANTO) 507.00p -0.49%
Rexam (REX) 609.50p 0.00%
Anglo American (AAL) 502.90p 0.02%
Randgold Resources Ltd. (RRS) 6,370.00p 0.16%
Fresnillo (FRES) 920.50p 0.16%
BHP Billiton (BLT) 791.40p 0.19%
SABMiller (SAB) 4,233.50p 0.34%
Capita (CPI) 1,033.00p 0.39%

FTSE 250 - Risers

DFS Furniture (DFS) 319.40p 3.84%
Fidelity China Special Situations (FCSS) 127.50p 3.66%
Marshalls (MSLH) 312.50p 3.65%
Crest Nicholson Holdings (CRST) 519.50p 3.28%
Hastings Group Holdings (HSTG) 165.00p 3.06%
Just Retirement Group (JRG) 138.10p 3.06%
Fidelity European Values (FEV) 164.50p 3.01%
Worldwide Healthcare Trust (WWH) 1,714.00p 2.57%
Capital & Counties Properties (CAPC) 323.20p 2.51%
Evraz (EVR) 89.80p 2.34%

FTSE 250 - Fallers

Computacenter (CCC) 792.00p -4.12%
Petrofac Ltd. (PFC) 919.50p -2.54%
Polypipe Group (PLP) 309.50p -1.90%
Acacia Mining (ACA) 267.40p -1.66%
NMC Health (NMC) 904.50p -1.47%
Restaurant Group (RTN) 402.10p -1.35%
Lookers (LOOK) 161.90p -0.86%
Carillion (CLLN) 284.10p -0.77%
Barr (A.G.) (BAG) 543.00p -0.73%
JD Sports Fashion (JD.) 1,122.00p -0.62%