London close: Stocks rally despite 'taper talk'

The FTSE 100 advanced 1.0% to 7,019.79, having slumped on Wednesday as worries about rising inflation and a crypto crash sent markets into the red.

"What a difference a day makes. Financial markets have gone from a sea of red to one of overwhelming optimism, with the Nasdaq and DAX leading the charge. That comes despite an unwelcome reminder from the FOMC that a tightening phase for monetary policy may not be too far away," said IG senior market analyst.

"With the latest FOMC minutes highlighting the potential need to discuss tapering, there is a fear that tightening talk will only ramp up once the recent inflation readings have been accounted for."

Investors were also digesting the latest survey from the Confederation of British Industry, which showed that factory output saw its first material growth in May in almost two years as the economy recovered but supply shortages and cost pressures pointed towards future price increases.

In equity markets, media group Future surged for the second day in a row after well-received results on Wednesday.

On the downside, BT was hit by a downgrade to ‘hold’ from ‘buy’ at Berenberg, while Tesco and GlaxoSmithKline were both weaker as they traded without entitlement to the dividend.

Trainline shares plunged by almost a third after the UK government unveiled plans to set up a rival ticketing app.

Under the new proposals, commuters will be able to buy tickets via a website run by a new state-owned body called Great British Railways. It will also provide passengers an easier way to access refunds for disrupted journeys.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the new state-owned body puts Trainline’s dominance in the e-ticket space in question.

"70% of all digital fares are currently sold by Trainline, and despite the pandemic disruption which saw it pushed into a £100 million operating loss, Trainline kept investing in new personalised and go-location technology to win market share amongst customers," she noted.

EasyJet slipped after the budget airline posted a widening of its first-half losses, in line with expectations, as it continues to take a hit from Covid-related restrictions.

Royal Mail reversed early losses even as it said full-year pre-tax profits rose to £726m from £180m but reported a slowdown in April volumes.

Market Movers

FTSE 100 (UKX)7,019.791.00%
FTSE 250 (MCX)22,392.000.71%
techMARK (TASX)4,291.731.24%

FTSE 100 - Risers

Experian (EXPN)2,709.00p4.73%
Rightmove (RMV)600.60p3.84%
Compass Group (CPG)1,539.00p3.63%
Flutter Entertainment (CDI) (FLTR)12,670.00p3.60%
Intermediate Capital Group (ICP)2,035.00p3.22%
Aveva Group (AVV)3,265.00p3.13%
DCC (CDI) (DCC)6,236.00p3.07%
Scottish Mortgage Inv Trust (SMT)1,154.50p2.80%
Melrose Industries (MRO)162.05p2.76%
Spirax-Sarco Engineering (SPX)12,265.00p2.72%

FTSE 100 - Fallers

Antofagasta (ANTO)1,516.00p-2.31%
Tesco (TSCO)226.45p-2.31%
International Consolidated Airlines Group SA (CDI) (IAG)191.82p-1.41%
Fresnillo (FRES)879.00p-1.28%
BAE Systems (BA.)516.20p-0.69%
Glencore (GLEN)311.15p-0.67%
BT Group (BT.A)170.85p-0.67%
BHP Group (BHP)2,125.50p-0.58%
Kingfisher (KGF)374.20p-0.56%
Bunzl (BNZL)2,288.00p-0.52%

FTSE 250 - Risers

Future (FUTR)2,904.00p9.58%
Euromoney Institutional Investor (ERM)1,012.00p5.97%
Allianz Technology Trust (ATT)264.00p5.60%
Genuit Group (GEN)603.00p5.42%
Provident Financial (PFG)273.80p4.42%
Wickes Group (WIX)262.00p3.97%
Investec (INVP)293.90p3.83%
Plus500 Ltd (DI) (PLUS)1,540.50p3.75%
Avon Rubber (AVON)3,194.00p3.70%
Moneysupermarket.com Group (MONY)270.80p3.59%

FTSE 250 - Fallers

Trainline (TRN)328.60p-23.22%
Helios Towers (HTWS)162.00p-4.37%
TUI AG Reg Shs (DI) (TUI)427.40p-2.91%
Apax Global Alpha Limited (APAX)194.20p-2.80%
Ninety One (N91)241.20p-2.43%
Rank Group (RNK)177.20p-2.42%
Hill & Smith Holdings (HILS)1,488.00p-2.22%
Tullow Oil (TLW)50.96p-2.15%
Morrison (Wm) Supermarkets (MRW)179.70p-2.10%
Vesuvius (VSVS)564.50p-2.08%