Monday 14 October 2019

FTSE 100 strengthens on positive US-China trade talks

The pound, meanwhile, rose on solid January retail sales figures.

Royal Bank of Scotland helped bolster the FTSE 100 after the lender posted strong earnings Philip Toscano/PA)
Royal Bank of Scotland helped bolster the FTSE 100 after the lender posted strong earnings Philip Toscano/PA)

By Maryam Cockar, Press Association City Reporter

The FTSE 100 edged higher on Friday on renewed hopes of a US-China trade deal, while the Royal Bank of Scotland was a standout performer following better than expected results.

London’s blue-chip index closed 39.67 points, or 0.55%, higher at 7,236.68, while Germany’s DAX rose 1.73% and France’s CAC grew 1.76%.

Fiona Cincotta, senior market analysts at City Index, said: “Trade chatter continued to dictate sentiment on Friday. European markets charged higher and Wall Street opened on a positive footing, following reports that US and China had reached a consensus in principle on key topics in the trade negotiations.

“The promise of further talks next week has ignited optimism in the markets as the world’s two largest economies scramble to reach a deal before the March deadline.”

Miners helped lift the FTSE 100 thanks to higher metal prices, while RBS was a notable player on the index during the day and closed up 5.9p to 247.5p.

The state-owned bank reported its second successive year in the black and announced a £1.6 billion final dividend, resulting in a near £1 billion windfall for the taxpayer.

However, the lender also warned that its corporate clients are pausing investment due to Brexit, which will impact income over the next two years.

Meanwhile the pound was higher following solid retail sales figures for January.

Last month sales rose 1% compared to a 0.7% decline in December and beat analyst forecasts of 0.2% growth.

“Signs that the UK consumer continued to spend in January have offered some support to the Brexit-battered pound,” Ms Cincotta said.

Sterling was up 0.35% against the US dollar at 1.285 and was 0.61% higher versus the euro at 1.139 at the London market close.

In other corporate news, Mr Kipling cake firm Premier Foods scrapped plans to sell off its Ambrosia custard brand, blaming the current business climate.

The group put the unit up for sale last year as it came under pressure from activist investor Oasis, and Premier said at the time that it was in talks with several prospective bidders.

Premier Foods shares closed down 0.45p to 36.75p.

Lloyds Banking Group tapped Morgan Stanley investment banker William Chalmers to be its next chief financial officer.

Mr Chalmers will join Lloyds in June following the retirement of incumbent George Culmer.

Lloyds shares rose 1.04p to 58.44p.

Warehouse specialist Segro announced plans to raise £450 million through a share placing to bankroll its development pipeline.

The move will allow it to take advantage of new opportunities as it continues to benefit from the rise in demand from food delivery firms and online retailers.

Segro shares fell 6.2p to 640p.

Brent crude, the international benchmark, traded up 1.9% at 65.84 US dollars (£51.23).

The biggest risers on the FTSE 100 were Melrose Idustries up 9p to 170p, Coca-Cola HBC up 99p to 2,562p, Tesco up 6.3p to 224.2p and Evraz up 13.8p to 534p.

The biggest fallers on the FTSE 100 were Standard Life Aberdeen down 14.8p to 233.75p, Kingfisher down 7.1p to 225.5p, Next down 102p to 4,724p, and Micro Focus International down 23.5p to 1,680p.

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