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London close: Stocks close higher as polls remain open

By Josh White

Date: Thursday 12 Dec 2019

London close: Stocks close higher as polls remain open

(Sharecast News) - London stocks finished in the green on Thursday, with sterling weaker as polls remained open for the winter general election.
The FTSE 100 ended the session up 0.79% at 7,273.47, and the FTSE 250 added 0.71% to 20,793.03.

Sterling was last 0.49% weaker against the dollar at $1.3132, and had lost 0.35% against the euro to last trade at €1.1815.

"The base case scenario of somewhere between a 10-40 seat Conservative majority government is still odds on," said London Capital Group analyst Jasper Lawler.

"The polls have tightened but bookmakers' odds are still stacked heavily in favour of a Boris win."

Lawler said that if the election gave the Conservatives a working majority in parliament, and assuming global sentiment holds up, he was expecting the negative Footsie-sterling relationship to break down temporally.

"[This means] investors [will] simultaneously price in a better economic outcome for Britain by buying sterling while also loading up on the relative value to be found in UK-listed shares."

Investors were also mulling the latest policy announcement from the European Central Bank, which kept all its main policy settings unchanged, issuing a statement identical to that published after the governing council's previous meeting.

Interest rates on its main refinancing operations, marginal lending facility and deposit facility were kept at 0.0%, 0.25% and -0.50%, respectively.

At the same time, the council reiterated that the pace of asset purchases would continue at €20bn per month until "shortly before it starts raising the key ECB interest rates", with the aim of reinforcing the accommodative impact of its policy rates.

Earlier, investors were reacting to the latest meeting of the Federal Reserve in the US, which voted unanimously overnight to keep interest rates unchanged, as widely expected.

The US central bank also signalled that there would be no rate hikes next year.

Although the UK election was at the forefront of investors' minds, Sino-US trade talks remained in focus following reports that US President Donald Trump would meet with his top advisors later in the global day to discuss what to do about Sunday's scheduled tariff deadline.

Citing two sources familiar with the Trump administration's plans, Reuters said that US Trade Representative, Robert Lighthizer, Treasury Secretary, Steven Mnuchin, were expected to take part, together with national economic council director, Larry Kudlow, and Peter Navarro.

Reuters also cited "one person briefed on the situation" as saying that a decision to move ahead with the trade levies could "scuttle" the ongoing trade talks with China for the remainder of the US president's current term.

"The markets are desperate for a 'phase one' deal or, failing that, at least a tariff delay - if Washington does indeed go ahead with the hike, things could be pretty ugly on Monday morning," said Markets.com analyst Neil Wilson.

On home shores, the latest survey from the Royal Institution of Chartered Surveyors showed that house prices fell in November amid uncertainty about Brexit and the general election.

The RICS house price balance dropped to -12 from -5 in October, hitting its lowest level since April.

Analysts had expected it to remain unchanged.

Meanwhile, the new buyer enquiries balance rose to -9 in November from -15 the month before.

"Confidence is critical to a well-functioning housing market and whatever happens in the general election today, it is important that the new government provides reassurance both over the stewardship of the economy and the ongoing challenges around Brexit which continues to highlighted in a disproportionate number of remarks made by respondents to the RICS survey," said RICS chief economist Simon Rubinsohn.

In equity markets, Standard Chartered ended the day up 3.88% in London as it agreed to sell a stake in Indonesia's Bank Permata for $1.3bn.

JD Sports Fashion closed up 1.88%, recovering from heavy losses on Wednesday following reports that its largest shareholder, Pentland Group, had sold 24 million shares in the sportswear retailer.

Berenberg said in a note that the share price slump was a "good buying opportunity" as it hiked its price target on the stock.

British Airways and Iberia parent IAG flew 1.9% higher after Deutsche Bank highlighted it as one of its most preferred picks in the sector for 2020.

Ocado slipped back from its earlier gains, finishing flat after its joint venture with Marks & Spencer - Ocado Retail - reported a slight slowdown in sales growth in the fourth quarter.

Retail revenue rose 10.8% during the period to £429.1m, in line with the company's guidance but down a little from 11.4% growth in the third quarter.

Marks & Spencer Group was ahead 1.01% by the end of trading.

Construction group Balfour Beatty rallied 4.34% as it said it expected full-year profit from operations to be slightly ahead of expectations after additional infrastructure Investment disposals in the second half.

Serco Group ended the session just above the waterline, gaining 0.27% as the outsourcer lifted its full-year revenue and profit outlook, while Dixons Carphone advanced 7.05% even as it said profits in the first half fell 60%.

On the downside, John Laing Group retreated 13.57% after the greenfield infrastructure investor said full-year net asset value will be "marginally" below market expectations.

Imperial Leather maker PZ Cussons was in the red by 0.72% after it warned that 2019 revenue and profit would be "modestly" below the previous year on a like-for-like basis amid "challenging" market conditions and announced the retirement of its chief executive.

Associated British Foods fell 0.48%, Marston's slid 0.48%, and Cineworld was off 2.08% as all three stocks went ex-dividend.

Market Movers

FTSE 100 (UKX) 7,273.47 0.79%
FTSE 250 (MCX) 20,793.03 0.71%
techMARK (TASX) 4,018.80 0.28%

FTSE 100 - Risers

Evraz (EVR) 372.70p 4.56%
Standard Chartered (STAN) 718.00p 3.88%
Prudential (PRU) 1,375.50p 3.83%
Hargreaves Lansdown (HL.) 1,914.00p 3.67%
Glencore (GLEN) 226.35p 3.50%
Anglo American (AAL) 2,158.00p 3.35%
Melrose Industries (MRO) 231.50p 2.75%
HSBC Holdings (HSBA) 576.50p 2.63%
WPP (WPP) 985.20p 2.54%
RSA Insurance Group (RSA) 544.20p 2.49%

FTSE 100 - Fallers

Severn Trent (SVT) 2,213.00p -2.89%
United Utilities Group (UU.) 848.40p -2.80%
Hikma Pharmaceuticals (HIK) 1,930.50p -2.43%
Ferguson (FERG) 6,650.00p -2.21%
Associated British Foods (ABF) 2,433.00p -1.86%
Coca-Cola HBC AG (CDI) (CCH) 2,467.00p -1.36%
Berkeley Group Holdings (The) (BKG) 4,511.00p -1.14%
Burberry Group (BRBY) 2,070.00p -1.06%
National Grid (NG.) 888.00p -1.00%
SEGRO (SGRO) 841.60p -0.99%

FTSE 250 - Risers

Tullow Oil (TLW) 60.66p 15.19%
Aston Martin Lagonda Global Holdings (AML) 615.20p 9.00%
Dixons Carphone (DC.) 141.25p 7.05%
Wood Group (John) (WG.) 363.40p 6.82%
Hunting (HTG) 389.20p 6.71%
Pets at Home Group (PETS) 283.00p 4.97%
PureTech Health (PRTC) 260.00p 4.42%
Balfour Beatty (BBY) 240.40p 4.34%
Weir Group (WEIR) 1,480.00p 4.23%
Savills (SVS) 1,015.00p 3.94%

FTSE 250 - Fallers

John Laing Group (JLG) 355.00p -9.76%
Marston's (MARS) 124.00p -4.17%
Sirius Minerals (SXX) 3.40p -4.17%
Stagecoach Group (SGC) 133.30p -3.36%
Syncona Limited NPV (SYNC) 203.00p -3.33%
Finablr (FIN) 208.00p -3.26%
Go-Ahead Group (GOG) 1,951.00p -3.22%
Pennon Group (PNN) 901.00p -2.80%
Shaftesbury (SHB) 907.00p -2.63%
Cineworld Group (CINE) 206.80p -2.08%

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