London close: FTSE helped higher by Direct Line, Bovis and Astrazeneca

Thu 07 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - Shares closed higher on Thursday, extending earlier gains as investors sifted through corporate news that included well-received results from Bovis Homes, with Direct Line also lending support.
The FTSE 100 was up 0.58% to 7,396.98, while the DAX closed 0.67% higher to 12,296.63 and the CAC 40 was also up to 5,114.62.

Investors were digesting the latest figures from mortgage lender Halifax, which showed UK house prices rose more than expected in August.

House prices were up 1.1% from July, comfortably ahead of forecasts of a 0.2% gain. Prices were 2.6% higher on the year, beating expectations for a 2.1% increase, while the average house price rose to £222,293 from £219,918, and was above the previous high from December 2016 of £222,190.

Afternoon attention was very much focused on the European Central Bank rate decision at 1245 BST, followed by the press conference at 1330 BST.

Dissapointment came, however, in the form of a lack of clarity as to the tapering of the ECB's bond buying programme, which is due to end in December this year.

In the press conference, ECB President Mario Draghi gave no details with regards to the tapering, but did say that the bond buying programme is set to continue to December "or beyond if necessary."

ING economist Carsten Brzeski said: "Even though the ECB failed to present details of a game plan, the ECB's intentions are clear: prepare a very smooth tapering without pushing up interest rates and with as little further euro appreciation as possible."

On the corporate front, insurer Direct Line was on the front foot amid news that the government might be backtracking on its changes to the Ogden rate, which was cut to -0.75% from 2.5% in February, forcing most insurers into sizeable write-downs as the new rate meant they had to pay out more to personal injury claimants. The proposed changes would mean a rate of 0% to -1%.

Housebuilder Bovis Homes reported a 31% drop in first-half pre-tax profit but the shares rallied as investors welcomed a hike to the dividend, a special dividend and healthy margins as they put their faith in new chief executive Greg Fitzgerald. FTSE 100 peer Barratt Developments, which released its full-year results on Wednesday, also gained ground.

AstraZeneca rose after putting out a pair of positive respiratory updates from Phase III trials of combined treatment Duaklir and Phase IIb trials of tezepelumab.

Imperial Brands was up after agreeing to sell 13.275m ordinary shares of 20 euro cents each in Compañía De Distribución Integral Logista Holdings on the Madrid Stock Exchange, raising gross proceeds of £230.8m through the placing.

ZPG rallied as it announced a deal to buy financial services comparison website in deal worth up to £140m.

On the downside, Go-Ahead Group slumped as it reported that pre-tax profit for the full year fell 5.7%, while Ashmore was in the red despite posting a rise in full-year profits as underlying profit growth fell short of expectations.

Capita was also under the cosh after it cuts its underlying operating profit for 2016 as it adopted new accounting standards, while Sanne retreated after the release of its first-half results.

RBS was in the red alonsgide it, amid calls for the full publication of a leaked report on the treatment of customers in its global restructuring group.

Admiral was weaker as it went ex-dividend, along with BHP Billiton and Land Securities, among others.

Market Movers

FTSE 100 (UKX) 7,396.98 0.58%
FTSE 250 (MCX) 19,696.68 0.23%
techMARK (TASX) 3,458.45 1.13%

FTSE 100 - Risers

Micro Focus International (MCRO) 2,463.00p 5.12%
AstraZeneca (AZN) 4,774.00p 4.32%
Fresnillo (FRES) 1,672.00p 3.98%
GKN (GKN) 331.60p 3.24%
Imperial Brands (IMB) 3,300.00p 2.80%
Barratt Developments (BDEV) 608.50p 2.18%
Direct Line Insurance Group (DLG) 379.60p 2.15%
Sage Group (SGE) 696.50p 2.13%
Randgold Resources Ltd. (RRS) 8,190.00p 2.12%
Johnson Matthey (JMAT) 2,893.00p 2.08%

FTSE 100 - Fallers

Admiral Group (ADM) 1,838.00p -1.97%
BHP Billiton (BLT) 1,457.50p -1.82%
RSA Insurance Group (RSA) 637.50p -1.77%
Royal Bank of Scotland Group (RBS) 241.20p -1.39%
Royal Mail (RMG) 377.10p -1.36%
Standard Chartered (STAN) 740.50p -1.17%
Standard Life Aberdeen (SLA) 413.50p -1.01%
Barclays (BARC) 184.00p -1.00%
Rolls-Royce Holdings (RR.) 884.00p -0.90%
St James's Place (STJ) 1,118.00p -0.80%

FTSE 250 - Risers

Bovis Homes Group (BVS) 1,161.00p 10.36%
Hochschild Mining (HOC) 292.30p 4.63%
Nostrum Oil & Gas (NOG) 391.90p 4.51%
Clarkson (CKN) 2,943.00p 4.07%
Indivior (INDV) 303.00p 3.48%
Rank Group (RNK) 230.70p 3.18%
Ted Baker (TED) 2,506.00p 3.04%
NewRiver REIT (NRR) 365.20p 3.02%
IP Group (IPO) 117.40p 2.98%
Genus (GNS) 1,945.00p 2.67%

FTSE 250 - Fallers

Go-Ahead Group (GOG) 1,550.00p -11.58%
Ashmore Group (ASHM) 340.50p -6.76%
Vectura Group (VEC) 89.95p -5.32%
Phoenix Group Holdings (DI) (PHNX) 732.50p -3.68%
Sirius Minerals (SXX) 25.08p -3.58%
Evraz (EVR) 304.50p -3.36%
TalkTalk Telecom Group (TALK) 208.00p -3.17%
Pagegroup (PAGE) 486.90p -2.91%
Capita (CPI) 628.50p -2.41%
FirstGroup (FGP) 113.40p -2.33%
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