London close: Stocks bounce back amid better-than-expected data

Wed 30 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks bounced back but were off earlier highs as investors digested the latest figures on consumer credit and mortgage approvals, shrugging off concerns about North Korea.
At the close, the FTSE 100 was up by 0.38% or 27.83 points to 7,365.26, while the pound was up 0.09% against the dollar at 1.2932 and 0.54% firmer versus the euro at 1.0848, recovering after it sank against the single currency on Tuesday - amid frustration over the latest Brexit talks.

Stocks advanced even as US president Donald Trump's asserted that: "The US had been talking to North Korea, and paying them extortion money, for 25 years. Talking is not the answer!"

Yet as Chris Beauchamp, chief market analyst at IG, said: "Widespread relief seems to have spread across financial markets today, with the FTSE gaining ground as fears over North Korea dissipate. Despite today's gains, it is clear that the North Korean problem will not go away anytime soon. While Trump today declared that the time for talking is over, Chinese backing of the Pyongyang regime means conflict remains an unlikely eventuality.

"After recent weeks, traders are cognizant of the fact that any news from North Korea is almost certain to drive a rush to the safety of gold and the yen. With Donald Trump returning to Washington ahead of his latest tax reform speech, FX traders will be hoping that we will see an extension to the greenback rebound seen in the past 24-hours."

In economic news, bank lending figures from the Bank of England painted a mixed picture for households and businesses, with a further reduction in consumer credit but a rise in mortgage approvals and business lending.

At 9.8%, consumer credit growth eased to its slowest rate in a year and its second slowest in three years, as the July flow was a little weaker than recent months.

Net consumer credit took analysts by surprise, falling to 1.2bn from 1.4bn, Bank revealed, when an increase to 1.5bn had been forecast.

In parallel, mortgage approvals increased to 68,689 after a weaker few months to levels seen at the beginning of the year, well up from 65,318 in the previous month and higher than the 65.5K consensus expectation.

Stateside, private payrolls consultant ADP's closely-watched monthly survey showed hiring in the US picked up to a 237,000 person pace in August.

That was comfortably in excess of the 185,000 person gain markets had been expecting.

Meanwhile, eagerly awaited official non-farm payrolls figures due out on Friday were expected to reveal a 180,000 person gain.

On the corporate front, broadcaster ITV was bouncing back from heavy losses in the previous session, when it was hit by a revenue warning from German peer ProSiebenSat.1.

Rental equipment firm Ashtead was also on the front foot, with traders pointing to a possible boost from the rebuild following Hurricane Harvey in the US.

Ocado rallied on the back of an initiation at 'buy' at Citigroup while JD Sports was boosted as Barclays reiterated its 'overweight' rating on the stock.

Diploma was in the black after saying it had continued to trade well in the second half of the year and remained on track to post full year results in line with expectations.

WH Smith reversed early gains to end lower after saying results for the year to the end of August should hit target and that it continues to see further opportunities for international growth in via the airport market, while Petrofac was marginally higher as it reported a jump in first-half pre-tax profit but rebased its dividend.

Hansteen Holdings advanced as it announced the sale of Carvers Trading Estate in Ringwood, north east of Bournemouth on Wednesday for 7.06m, reflecting a net initial yield of 4.93% and a capital value per square foot of 137.

James Fisher was lower despite posting a rise in first-half underlying operating profits and lifting its dividend.

Going the other way, Spectris was in the red after saying it will sell its Microscan Systems unit to Omron Corporation for $157m in cash.

Dunelm was hit by the resignation of its chief executive for "personal reasons" and HSS Hire tanked after the tool and equipment hire company warned that year-on-year revenue growth in the current quarter will see a "materially lower" level of improvement than expected at the start of the first half.

Market Movers

FTSE 100 (UKX) 7,365.26 0.38%
FTSE 250 (MCX) 19,616.56 0.45%
techMARK (TASX) 3,385.51 0.69%

FTSE 100 - Risers

Ashtead Group (AHT) 1,672.00p 4.83%
G4S (GFS) 292.90p 2.70%
ITV (ITV) 156.90p 2.55%
Associated British Foods (ABF) 3,293.00p 2.39%
Sainsbury (J) (SBRY) 235.80p 2.21%
BAE Systems (BA.) 603.00p 2.20%
Ferguson (FERG) 4,551.00p 2.04%
Barratt Developments (BDEV) 621.00p 1.80%
GKN (GKN) 319.20p 1.49%
Rentokil Initial (RTO) 300.00p 1.49%

FTSE 100 - Fallers

easyJet (EZJ) 1,182.00p -1.99%
Provident Financial (PFG) 892.00p -1.60%
Mediclinic International (MDC) 743.00p -1.52%
Johnson Matthey (JMAT) 2,756.00p -1.47%
International Consolidated Airlines Group SA (CDI) (IAG) 601.00p -1.39%
Pearson (PSON) 604.50p -1.31%
Old Mutual (OML) 205.90p -1.25%
Royal Bank of Scotland Group (RBS) 248.50p -0.92%
Informa (INF) 680.50p -0.87%
AstraZeneca (AZN) 4,453.00p -0.86%

FTSE 250 - Risers

Diploma (DPLM) 1,089.00p 5.93%
JD Sports Fashion (JD.) 316.40p 4.32%
Ocado Group (OCDO) 304.10p 4.29%
Evraz (EVR) 315.50p 3.95%
Sirius Minerals (SXX) 27.53p 3.57%
Bodycote (BOY) 961.50p 3.33%
Unite Group (UTG) 690.00p 3.23%
Pets at Home Group (PETS) 180.40p 3.09%
Hunting (HTG) 393.50p 2.85%
Aggreko (AGK) 883.50p 2.49%

FTSE 250 - Fallers

Acacia Mining (ACA) 204.60p -5.01%
IG Group Holdings (IGG) 636.50p -4.43%
Dunelm Group (DNLM) 573.50p -4.10%
Carillion (CLLN) 45.46p -3.71%
Euromoney Institutional Investor (ERM) 1,068.00p -3.44%
Hikma Pharmaceuticals (HIK) 1,231.00p -3.30%
Millennium & Copthorne Hotels (MLC) 450.80p -3.07%
Nostrum Oil & Gas (NOG) 373.30p -2.53%
Daejan Holdings (DJAN) 5,900.00p -2.48%
Petrofac Ltd. (PFC) 413.50p -2.29%
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