London close: Stocks edge higher as China moves to buttress economy

Mon 17 Feb 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks finished slightly higher on Monday as investors welcomed signs that Chinese authorities are prepared to boost stimulus measures to support the virus-hit economy.
The FTSE 100 gained 0.33% at 7,433.25.

Overnight, the People's Bank of China cut the interest rate on its medium-term funding by 10 basis points to 3.15% - the lowest since 2017. It also added 100bn yuan of funds via seven-day reverse repurchase agreements.

Spreadex analyst Connor Campbell said: "It seemed Europe chose to follow in the footsteps of the Shanghai Composite rather than the rest of the Asian markets, shaking off the news that Japan's economy contracted by an eye-watering 1.6% in the fourth quarter.

"The suggestion that the Bank of Japan is ready to step in if the coronavirus 'significantly affects' the country's economy appeared to mitigate the blow of that GDP reading, capping the Nikkei's losses at 0.7%.

"Ditto the hopes that Beijing is willing to pump in more stimulus to try and bubble-wrap China from the full impact of the outbreak - which now stands at 70,548 cases and 1,770 deaths on the mainland."

Monday's session was expected to be a little quieter than usual, with US markets closed for Presidents Day.

On home shores, the latest survey from Rightmove showed that asking prices for UK houses rose 0.8% on the month in February, just ?40 shy of a new all-time high as a boom in buyer activity outstripped a rise in the number of new sellers.

On the year, prices were up 2.9% in February and Rightmove said "the buyer boom" had set the scene for new price records this spring.

Rightmove director and housing market analyst Miles Shipside said: "The average price of newly-marketed property is just ?40 below its all-time high from June 2018, with the typically busy spring market still to come. This means that spring buyers are likely to be faced with the highest average asking prices ever seen in Britain.

"Buyers who had been hesitating and waiting for the greater political certainty following the election outcome may be paying a higher price, but they can now jump into the spring market with renewed confidence. After three and a half years of Brexit uncertainty, dither, and delay, many now seem to have the 2020 vision that this is the year to satisfy their pent-up housing needs."

On the corporate front, miner BHP and Russian steelmaker Evraz gained as investors cheered Chinese stimulus measures, while HSBC was higher a day ahead of its full-year results.

Jupiter Fund Management was a high riser as it confirmed it had made a ?370m takeover offer for Merian Global Investors.

Cairn Energy rallied as it said it had made a new oil discovery on the Saasken exploration prospect offshore Mexico.

On the downside, packaging business DS Smith was in the red as its chief financial officer Adrian Marsh was set to leave the company to become CFO of bookmaker William Hill.

Meggitt was knocked lower by a downgrade to 'neutral' at Citi, IMI was weaker after a downgrade to 'underperform' at Credit Suisse and Avast was dented by a downgrade to 'reduce' at Erste Group.

Tullow Oil gushed lower after saying that the Marina-1 exploration well, drilled off the coast of Peru, did not discover significant hydrocarbons. Tullow holds a 35% interest in the well.

Doorstep lender Provident Financial lost ground after the Financial Conduct Authority fined its Moneybarn business ?2.8m for treating customers unfairly.

Market Movers

FTSE 100 (UKX) 7,433.25 0.33%
FTSE 250 (MCX) 21,826.34 0.17%
techMARK (TASX) 4,116.87 0.07%

FTSE 100 - Risers

NMC Health (NMC) 798.40p 3.23%
Kingfisher (KGF) 222.00p 2.45%
Auto Trader Group (AUTO) 602.80p 2.34%
Centrica (CNA) 72.64p 1.94%
Melrose Industries (MRO) 242.00p 1.89%
Ashtead Group (AHT) 2,730.00p 1.49%
Sainsbury (J) (SBRY) 208.40p 1.17%
Glencore (GLEN) 236.65p 1.15%
Prudential (PRU) 1,493.50p 1.15%
Johnson Matthey (JMAT) 2,675.00p 1.10%

FTSE 100 - Fallers

SEGRO (SGRO) 906.60p -3.04%
Smith (DS) (SMDS) 358.60p -2.00%
TUI AG Reg Shs (DI) (TUI) 880.00p -1.94%
Royal Bank of Scotland Group (RBS) 209.00p -1.92%
Meggitt (MGGT) 635.40p -1.64%
St James's Place (STJ) 1,170.50p -1.47%
Imperial Brands (IMB) 1,798.60p -1.45%
Intertek Group (ITRK) 5,814.00p -1.39%
Land Securities Group (LAND) 982.00p -1.39%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,700.00p -1.28%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 450.30p 6.76%
Jupiter Fund Management (JUP) 411.20p 3.66%
Diploma (DPLM) 2,062.00p 3.46%
Kaz Minerals (KAZ) 511.40p 3.31%
Ferrexpo (FXPO) 149.70p 2.99%
Bakkavor Group (BAKK) 138.60p 2.96%
Vivo Energy (VVO) 109.20p 2.78%
Wood Group (John) (WG.) 413.30p 2.76%
Drax Group (DRX) 295.20p 2.71%
IP Group (IPO) 75.00p 2.60%

FTSE 250 - Fallers

Galliford Try (GFRD) 178.38p -6.54%
Sirius Minerals (SXX) 5.03p -4.74%
Bank of Georgia Group (BGEO) 1,713.00p -4.46%
Softcat (SCT) 1,208.00p -3.97%
Dunelm Group (DNLM) 1,350.00p -3.85%
Barr (A.G.) (BAG) 578.00p -2.86%
Tullow Oil (TLW) 44.02p -2.70%
888 Holdings (888) 133.40p -2.27%
Hammerson (HMSO) 234.90p -2.13%
Dixons Carphone (DC.) 138.40p -1.95%
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27 Mar London close: Stocks finish red as PM, health secretary test positive
26 Mar London close: Stocks finish higher as BoE hints at further asset purchases
25 Mar London close: Stocks firmly higher after roller coaster session
24 Mar London close: Stocks finish firmer as investors cheer stimulus