Portfolio

London close: FTSE 100 hits highest close since early October

By Oliver Haill

Date: Tuesday 19 Mar 2019

London close: FTSE 100 hits highest close since early October

(Sharecast News) - London stocks continuing to push higher on Tuesday as investors remained sanguine about Brexit uncertainty and mulled figures showing a drop in the rate of unemployment to its lowest level since 1975.
The FTSE 100 recorded its highest close since early October as Theresa May wrote to European Council President Donald Tusk to ask for an extension to the Brexit deadline.

By the closing bell, the UK equity benchmark added almost 25 points or 0.3% to reach 7,324.00, the first time it has finished above the 7,300 level since 5 October. Any moves for the pound were wiped out by the early evening, at $1.3274 and €1.1693.

A 10 Downing Street spokesman said the Prime Minister would write to Tusk on Tuesday or Wednesday, ahead of the European Union leaders' summit that begins on Thursday.

After House of Commons speaker John Bercow scuttled May's hoped-for third meaningful vote, analysts at Rabobank said the ruling did not represent the cliff edge moment that market had initially assumed.

"Instead, the PM's hands are tied to the point that an extension, and perhaps a longer than expected extension, now seems more likely than the UK crashing out of the EU in an unexpected cliff-edge moment," Rabobank said. "Not being able to bring the same motion back to the table for eventual agreement rather suggests that the PM will be forced to seek an even longer extension, perhaps 12-24 months in length."

Helping to prop up sentiment in sterling assets, the Office for National Statistics reported that firms had ramped up hiring over the latest three-month stretch, defying survey results which appeared to hint at an imminent slowdown.

According to the ONS, employment growth over the three months to January accelerated to 222,000 after rising by 167,000 in the last quarter of 2018, with the unemployment rate hitting a low of 3.9%.

Poignantly, wage growth clocked in at a quarterly annualised pace of 3.4%, which was unchanged versus the clip observed during the fourth quarter.

The data also fed into expectations for a possible Bank of England rate hike in the summer, according to economists at Morgan Stanley and Capital Economics - assuming there was no 'hard Brexit'.

"This will add to concerns that the Brexit-related fall in investment is having a detrimental effect on the economy, as firms have opted to hire workers to meet demand rather than invest," said Andrew Wishart at Capital Economics.

"But it is also a mix that could push up inflation. As a result, if there is a long delay to Brexit or a deal is struck, we suspect the MPC will raise interest rates this summer."

In corporate news, shares of Ocado were on the front after reaching a fresh 52-week high earlier as the online grocer said its sales were barely dented by the huge fire at its Andover depot during the quarter. The online grocery specialist reported 11.2% growth in the first 13 weeks of its new financial year to 3 March and said the fire "has been a setback, but will be only a temporary one".

Sainsbury's advanced after it and Asda promised to invest £1bn in cutting shop prices by 10%, improve conditions for small suppliers and sell stores as they urged competition authorities to change its mind over their proposed merger.

Hikma Pharmaceuticals was towards the top of the leaderboard thanks to the boost from an upgrade to 'buy' at Citi, while Informa was lifted after an upgrade to 'overweight' at Morgan Stanley.

Mining giant Antofagasta rallied as it declared a bumper dividend and posted a drop in annual core earnings that was in line with analysts' expectations.

IT infrastructure and services provider Softcat surged as it reported a 41% jump in first-half profit and revenue as customer numbers grew and the company said full-year results will be "marginally" ahead of previous expectations.

Standard Life Aberdeen rose after saying that a tribunal has ruled in its favour in respect of investment mandate dispute with Lloyds Banking Group, while elsewhere in the financial sector TP ICAP jumped even as it posted a 14% drop in 2018 pre-tax profit.

Energy services provider Wood Group fell sharply as it said it swung to a profit in 2018 but that its deleveraging programme this year would be "more gradual than originally anticipated".

Polypipe slid as its full-year revenue came in in line with expectations, but underlying EBITA and earnings per share were a miss.

Ferrexpo was also sharply lower after saying that a review of its donation to charity Blooming Land identified additional discrepancies, forcing it to delay its 2018 results.

Outside the FTSE 350, was womenswear retailer Bonmarche saw its shares tumble 24% after warning of a worse-than-expected full-year loss - its third profit warning in six months - as trading since the beginning of March has been "significantly" weaker.

In other broker note action, Marshalls was cut to 'hold' at Berenberg.

Market Movers

FTSE 100 (UKX) 7,324.00 0.34%
FTSE 250 (MCX) 19,551.29 0.33%
techMARK (TASX) 3,569.14 0.51%

FTSE 100 - Risers

Ocado Group (OCDO) 1,209.00p 5.36%
Informa (INF) 747.80p 3.69%
Smurfit Kappa Group (SKG) 2,288.00p 3.25%
Glencore (GLEN) 320.85p 3.23%
DCC (DCC) 6,565.00p 3.14%
Antofagasta (ANTO) 965.60p 2.77%
NMC Health (NMC) 2,690.00p 2.52%
Hikma Pharmaceuticals (HIK) 1,630.50p 2.45%
Smith (DS) (SMDS) 356.40p 2.12%
Burberry Group (BRBY) 1,900.50p 1.93%

FTSE 100 - Fallers

Evraz (EVR) 604.00p -4.13%
Relx plc (REL) 1,646.00p -1.56%
Standard Chartered (STAN) 611.00p -1.10%
Rentokil Initial (RTO) 347.48p -0.94%
Reckitt Benckiser Group (RB.) 6,237.00p -0.70%
Diageo (DGE) 3,064.00p -0.68%
Direct Line Insurance Group (DLG) 362.20p -0.63%
GlaxoSmithKline (GSK) 1,503.20p -0.62%
Intertek Group (ITRK) 4,796.00p -0.54%
Fresnillo (FRES) 803.40p -0.52%

FTSE 250 - Risers

TP ICAP (TCAP) 319.70p 5.30%
Premier Oil (PMO) 90.00p 5.20%
Hunting (HTG) 595.00p 4.66%
Vivo Energy (VVO) 127.00p 4.32%
Wetherspoon (J.D.) (JDW) 1,369.00p 4.11%
Hilton Food Group (HFG) 956.00p 3.91%
Senior (SNR) 216.20p 3.84%
Softcat (SCT) 869.00p 3.82%
Essentra (ESNT) 417.40p 3.78%
Clarkson (CKN) 2,575.00p 3.21%

FTSE 250 - Fallers

Wood Group (John) (WG.) 550.00p -8.12%
Restaurant Group (RTN) 128.00p -6.57%
Polypipe Group (PLP) 405.00p -6.38%
Just Group (JUST) 78.00p -4.88%
Amigo Holdings (AMGO) 195.04p -4.81%
Fisher (James) & Sons (FSJ) 2,170.00p -3.98%
Ferrexpo (FXPO) 259.50p -3.96%
Provident Financial (PFG) 552.40p -3.29%
GVC Holdings (GVC) 537.50p -2.71%
Metro Bank (MTRO) 851.50p -2.52%

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