Portfolio

London close: Sterling weakness helps FTSE higher, guided by resources

By Andrew Schonberg

Date: Tuesday 04 Apr 2017

London close: Sterling weakness helps FTSE higher, guided by resources

(ShareCast News) - Equities in London held on to their early moderate gains on Tuesday to close the session on a positive note, helped throughout the day by weakness in sterling and despite a fall in UK construction growth.
"The FTSE100 has bounced back buoyed by a recovery in basic resource stocks, and a slide in the value of the pound," said Michael Hewson, chief market analyst at CMC Markets UK.

"The weakness of the pound is undoubtedly acting as a tail wind for UK stocks with dividends in 2017 set to come in at record levels, with special dividends also providing a windfall."

At the closing bell, the FTSE 100 was up 0.54% to 7,321.82, and the FTSE 250 was 0.35% higher at 19,020.13.

In the US, at 16:30 GMT, the Dow was up a little, but the S&P 500 and Nasdaq slipped. In Europe, the Euro Stoxx 50, Dax and Cac 40 were making slender gains.

European markets were dampened by lingering political risk, which -- along with Brexit nerves, Trump uncertainties and Opec output pledges -- helped gold futures rise.

Back in London, Shell and BP firmed with WTI and Brent prices, BP also getting an upgrade to 'buy' at Deutsche Bank. Randgold Resources and Fresnillo rose with precious metals and in particular gold as the market spotlight shifted back towards geopolitical concerns.

Other miners made gains with Rio Tinto, Anglo American and BHP Billion doing well. Other stocks featuring among the FTSE 100 risers included insurers, commercial property and house builders.

"The (FTSE) index's gains largely stemmed from the pound's slight losses," said Connor Campbell, financial analyst at Spreadex.

He said sterling's fall came "off the back" of the slowdown in UK construction sector, with the British unit down on both the dollar and euro.

The Markit/CIPS UK construction purchasing managers' index fell to 52.2 for March, from 52.5 in February, a level at which economists expected it to remain.

"The UK PMI slowdown continued apace this morning, with the construction PMI providing yet another disappointing survey result for the industry," IG analyst Joshua Mahony said.

"Yet another weak PMI reading only serves to compound fears over the UK economy as we move into an increasingly hostile Brexit negotiation environment," he said.

In the news, distribution giant Bunzl was on the front foot after saying it had bought two safety businesses in the US and Italy for an undisclosed sum.

Sub-prime lender Provident Financial advanced as it updated the market on its medium-term financial guidance ahead of its capital markets day.

Royal Bank of Scotland Group was down after European Commission regulators said they had launched an in-depth probe into the decision to allow it off from divesting its Williams & Glyn business.

Supermarket Morrisons was trading lower despite the release of data from Kantar Worldpanel, that showed the supermarket was the only one of the 'big four' to grow sales over the past 12 weeks.

South African focused Old Mutual and Mediclinic, among others, were under pressure as the rand slumped overnight after S&P cut the nation's sovereign credit rating to 'junk'. Mediclinic was also hurt by a downgrade from Macquarie.

Market Movers

FTSE 100 (UKX) 7,321.82 0.54%
FTSE 250 (MCX) 19,020.13 0.35%
techMARK (TASX) 3,441.07 0.67%

FTSE 100 - Risers

Fresnillo (FRES) 1,595.00p 2.77%
Shire Plc (SHP) 4,752.00p 2.46%
Rio Tinto (RIO) 3,264.50p 2.45%
Anglo American (AAL) 1,238.50p 2.44%
3i Group (III) 753.00p 2.24%
BHP Billiton (BLT) 1,255.50p 2.24%
Rolls-Royce Holdings (RR.) 766.50p 2.13%
Glencore (GLEN) 320.20p 2.10%
Hargreaves Lansdown (HL.) 1,329.00p 1.92%
Rentokil Initial (RTO) 250.60p 1.75%

FTSE 100 - Fallers

Morrison (Wm) Supermarkets (MRW) 230.90p -2.86%
Mediclinic International (MDC) 691.00p -2.74%
Associated British Foods (ABF) 2,539.00p -2.38%
Sainsbury (J) (SBRY) 257.40p -2.20%
Barclays (BARC) 217.65p -1.72%
Royal Bank of Scotland Group (RBS) 236.40p -1.46%
GKN (GKN) 359.30p -1.02%
Royal Mail (RMG) 417.20p -0.95%
Next (NXT) 4,130.00p -0.86%
Lloyds Banking Group (LLOY) 65.51p -0.79%

FTSE 250 - Risers

Sophos Group (SOPH) 302.70p 11.25%
Rotork (ROR) 257.00p 4.39%
Berendsen (BRSN) 764.50p 3.17%
BGEO Group (BGEO) 3,333.00p 3.09%
Ashmore Group (ASHM) 363.40p 2.89%
NMC Health (NMC) 1,789.00p 2.58%
Kaz Minerals (KAZ) 465.70p 2.55%
Centamin (DI) (CEY) 178.50p 2.53%
Clarkson (CKN) 2,680.00p 2.49%
Essentra (ESNT) 533.50p 2.40%

FTSE 250 - Fallers

Allied Minds (ALM) 261.00p -3.48%
Carillion (CLLN) 219.50p -2.31%
OneSavings Bank (OSB) 400.60p -2.27%
Henderson Group (HGG) 231.20p -2.03%
Dunelm Group (DNLM) 624.00p -1.96%
Millennium & Copthorne Hotels (MLC) 441.60p -1.93%
Kier Group (KIE) 1,347.00p -1.89%
Virgin Money Holdings (UK) (VM.) 314.30p -1.84%
Sports Direct International (SPD) 299.30p -1.84%
Debenhams (DEB) 53.20p -1.75%

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