Financials, big oil, miners pace gains in London

On Wednesday, Athens managed to clinch a deal to relieve the government´s lack of financial liquidity, while in the UK the results from another poll appeared to point to better odds for the 'Remain' camp at the 23 June referendum.

Banks were the top performers in terms of percentage gains on the London Stock Exchange. Over on the Continent, the DJ Stoxx 600 pan-European gauge of lender´s shares notched up a rise of 3.23% or 4.87 points, seeing the day out at 155.61.

“After three weeks of lacklustre market performance, investor sentiment has finally turned more positive, with markets up strongly, adding to the significant gains seen yesterday. The increased probability of a Remain vote alongside aid agreement on Greece (albeit somewhat diluted) and a more optimistic view of the US economy have all combined to encourage investors back to the table,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.

It was a similar story in the States, with the Philadelphia Stock Exchange´s KBW index of bank shores notching up gains of 2.0% to 71.12 as of 20:42 BST, taking the index nearer towards its end-2015 level.

To take note of as well, overnight the President of the US Federal Reserve bank of St.Louis told CNBC one should not prejudge what the outcome of 15 June Fed policy meeting might be.

He also appeared to hold out the possibility that the next interest rate hike might instead arrive in July.

Odds of tighter monetary policy being decided upon at the next Federal Open Market Committee meeting stood at 31.9% according to the Chicago Mercantile Exchange´s Fed Watch tool.

According to an opinion poll conducted for the Evening Standard by Opinium, voters in London said they were overwhelmingly in favour of the UK staying inside the European Union, by a margin of 60% in favour to 40% against.

Weaker than expected weekly commercial crude oil stockpile data from the US Department of Energy provided lifted Brent crude oil futures higher by some 2.47% to $49.84 per barrel on the ICE.

In parallel, July 2016 copper futures on COMEX were up by 1.79% $2.1035 a pound.

Analysts at Macquarie sounded a somewhat cheery note on the prospects for metals demand, telling clients: "global industrial production avoided a recession in 1Q, but growth remains very slow and dependent on China, based on national output data of 69 leading industrial countries, which account for about 93% of global IP.

"Many headwinds remain but solid initial April data plus a falling headwind from the weak oil sector suggesting a more promising outlook. This will underpin metals demand."

That may have helped London-listed miners to brush off a two-day 10% drop in iron ore futures for immediate delivery.

Construction stocks were also wanted. Keller Group, the ground engineering specialist was one of the top performers after the company reported that recently-appointed non-executive chairman Peter Hill had picked up some shares.

Shares in CRH, the construction and building materials supplier were also on the up after analysts at JP Morgan said the Dublin,Ireland-based outfit was well-placed to benefit from recently passed legislation Stateside to boost spending on infrastructure.

Based just on guidance from US aggregates companies there was 7% upside to then current estimates for the company´s earning per share in 2016, Elodie Rall, Rajesh patki, Emily Biddulph and David Min said in a research note sent to clients.

On the downside, it was all about Marks&Sparks and Tesco, which were a drag on their respective sectors.

Marks & Spencer was firmly under the cosh after reporting a drop in full-year profit and warning that short-term profit would take a hit from plans to turn around the clothing business.

Calculating that Tesco's sales performance at larger stores was likely to be worse than reported and that margins should be "permanently rebased lower", Credit Suisse cut its earnings estimates and its target price on the supermarket group. The Swiss broker slashed its target to 115p from 135p but kept its 'underperform' rating.

Top performing sectors so far today
Banks 3,393.75 +2.61%
Oil & Gas Producers 6,218.00 +2.06%
Oil Equipment, Services & Distribution 13,378.20 +1.75%
Mining 8,949.87 +1.45%
Construction & Materials 5,324.80 +1.43%

Bottom performing sectors so far today
General Retailers 2,795.88 -2.04%
Food & Drug Retailers 2,720.21 -1.24%
Industrial Metals & Mining 1,191.69 -0.90%
Aerospace and Defence 4,001.73 -0.84%
Real Estate Investment Trusts 3,178.34 -0.83%