Friday 14 December 2018

FTSE 100 rises as European equity markets continue to recover

Similar gains were made by the French Cac 40 and German Dax.

European equity markets were trading higher on Monday (Clive Gee/PA)
European equity markets were trading higher on Monday (Clive Gee/PA)

By Kalyeena Makortoff, Press Association City Correspondent

The FTSE 100 gained more than half a percent as European equity markets continued to recover from the sharp sell-off earlier this month.

London’s blue chip index ended the day up 0.6% or 45.17 points at 7,289.58 points, with similar gains by the French Cac 40 and German Dax, which rose 0.5% and 0.3%, respectively.

Anglo American was the UK market’s biggest riser, up  55.2p at 1,843.6p, as investors cheered news that the mining giant had completed the sale of its stake in the Drayton coal mine in Australia.

Investors are becoming more content to buy back into the market, and the memory of the sharp sell-off at the start of the month is continuing to fade David Madden, market analyst at CMC Markets UK

Associated British Foods was close behind, up 81p at 2,726p, after the Primark owner said profit growth at the fashion retailer would accelerate in the second half of the year thanks to a boost from the weak US dollar and a better buying performance.

But David Madden, a market analyst at CMC Markets UK, said a broader rebound was taking place.

He said: “The recovery in European equity markets is still being played out.

“Investors are becoming more content to buy back into the market, and the memory of the sharp sell-off at the start of the month is continuing to fade.

“Dealers are coming around to the idea that the positive market momentum is here to stay.”

In currency markets, sterling was mixed, falling 0.1% against the US dollar to 1.394, but rising 0.1% versus the euro to trade at 1.134.

Brent crude prices rose 0.7% to 67.83 US dollars per barrel as investors cheered positive news from Saudi Arabia, which said that production for the first three months of 2018 would be below 2016 levels – giving further hope of reducing the global glut.

In UK stocks, Hammerson shares were the worst performers on the FTSE 100, falling 10.4p to 465.8p after warning that Brexit-related uncertainty was still weighing on the British retail market – which it said had softened in 2017.

Hammerson announced in December that it had reached a £3.4 billion deal to acquire rival Intu, which is set to increase the group’s exposure to the challenging UK market.

Provident Financial plunged 68.6p to 588p following reports that the troubled subprime lender is eyeing a £500 million cash call to aid its bruised balance sheet and pay off future fines.

The announcement could come alongside the company’s annual results on Tuesday, with Cazenove and Barclays expected to be chief underwriters if the move goes ahead.

Insurer Hiscox dropped 29p to 1,367p as it reported a 91% fall in pre-tax profits to £30.8 million for the year ending in December, as the group’s performance was blighted by US and Caribbean hurricanes, earthquakes in Mexico, and California wildfires.

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Hiscox

The specialist insurer was hit by the need to set aside 225 million US dollars (£160.2 million) to cover losses from the disasters, which cost the wider industry 140 billion dollars (£100 billion).

Gross written premiums rose 6% to £2.5 billion, with total income climbing from £1.8 billion to £2 billion over the period.

The biggest risers on the FTSE 100 were Anglo American up 55.2p at 1,843.6p, Associated British Foods up 81p at 2,726p, International Consolidated Airlines Group up 15.6p at 602.8p, and BAE Systems up 12.6p at 577.6p.

The biggest fallers on the FTSE 100 were Hammerson down 10.4p at 465.8p, Bunzl down 36p at 1,975p, Evraz down 6.3p at 425.9p, and Mediclinic International down 8.4p at 600p.

Press Association

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