1st Feb 2021 17:03
(Alliance News) - The new week in London was again being dominated by the Reddit community, with the online forum pushing silver prices to an eight-year high.
SpreadEx analyst Connor Campbell said: "Though it is unclear who exactly is behind the sharp rise in silver, the precious metal's growth has kept the Reddit-retail trader conversation at the forefront of investors' minds."
The FTSE 100 index closed up 58.96 points or 0.9%, at 6,466.42. The FTSE 250 ended up 164.04 points, or 0.8%, at 20,392.62. The AIM All-Share closed up 10.30 points, or 0.9%, at 1,170.97.
The Cboe UK 100 ended up 1.0% at 643.11, the Cboe UK 250 closed up 1.0% at 17,967.82, and the Cboe Small Companies ended up 0.2% at 12,113.70.
In Paris, the CAC 40 ended 1.2% higher, while the DAX 30 in Frankfurt added 1.4%.
IG Chief Market Analyst Chris Beauchamp said: "It has, unsurprisingly, been a great day for precious metals miners, and London's first day of February trading has seen Fresnillo and Polymetal surge to the top of the FTSE 100. It is a similar picture on other exchanges, miners being big winners in New York and elsewhere. Unlike last week's frenzy in heavily-shorted stocks, this move in silver has ripple effects far beyond the asset itself, but with the US dollar picking up steam there will be questions over how long the metal can hold on to its gains, especially once the 'fast money' crowd moves on."
In the FTSE 100, gold and silver miner Fresnillo ended the best performer, up 9.0%, while peer Polymetal International advanced 5.2%, benefiting from a rise in silver prices. In the FTSE 250, Hochschild Mining gained 11%.
Spot silver was priced at USD28.59 an ounce in London at close Monday, up from USD27.04 an ounce late Friday and USD25.38 on Wednesday last week. The precious metal breached the USD30 mark in early trade to hit its highest level in eight years as users on Reddit forum r/WallStreetBets intensified calls for a short-squeeze on the commodity.
Gold was quoted at USD1,860.90 an ounce at the London equities close, higher against USD1,857.20 late Friday.
Beauchamp continued: "New-month flows and an apparent desire to put the miserable last week of January behind them have seen stock markets kick off February with healthy gains. The attention of markets has moved on from the excitement seen in certain names last week to silver, and with the liquidation of longs to pay for losses on the short-side now accomplished it looks like last week's drop was enough to tempt buyers back into the market."
JD Sports Fashion gained 7.0%, after the sportswear retailer said it has agreed to buy Baltimore, Maryland-based footwear and apparel streetwear retailer DTLR Villa for USD495 million. JD Sports said the acquisition of DTLR will enhance its presence in the north and east region of the US and complements its existing JD and Finish Line brands alongside the recent acquisition of Shoe Palace based on the west coast.
At the other end of the large caps, Pearson was the worst performer, giving back 5.6%, after UBS downgraded the education publisher to Sell from Neutral.
UBS said Pearson's annual results next month could be a negative catalyst, with the stock already on a strong run.
UBS analyst Adam Berlin highlighted shares are up around 60% in the last three months, but is becoming increasingly concerned that Pearson's annual results on March 5 could be detrimental and shares could fall from lofty heights.
Hargreaves Lansdown lost 4.5%, despite a rise in interim earnings and lifted its payout, adding that its second half has started strongly.
For the half year ended December 31, net new business rose 40% to GBP3.24 billion from GBP2.31 billion a year ago. Pretax profit was up 10% to GBP188.4 million from GBP171.1 million.
Total assets under administration as at December 31 was GBP120.6 million, up 15% from GBP105.2 billion at the same time in 2019.
The fund supermarket said it added 1.5 million active clients, which was an increase of 84,000 since June 30. Hargreaves raised its interim dividend by 6% to 11.9 pence per share.
"As our client numbers continue to grow, we are finding that younger people are taking a greater interest in investing for the future, with the average age of our clients continuing to fall. Covid-19 has underpinned the importance of financial resilience and Hargreaves Lansdown is well placed to support clients with their saving and investment needs across their lifetimes," said Chief Executive Officer Chris Hill.
On AIM, ASOS added 6.4% after the online fashion retailer said it has acquired four brands from beleaguered Arcadia Group, including UK high street staples Topshop and Topman.
ASOS will pay GBP265 million for the four brands - including Miss Selfridge and HIIT as well - and also buy GBP30 million in stock upfront. HIIT was a sub-brand of menswear retailer Burton, which ASOS has chosen not to acquire. ASOS is only buying the stock and the brands, so the physical stores still will close.
In the US, Wall Street was firmly in the green at the London equities close. The DJIA was 0.7% higher, the S&P 500 index up 1.2% and the Nasdaq Composite was up 1.8%.
IG's Beauchamp said: "Volatility has dropped from Friday but it remains at an elevated level, and last week's pullback still seems like a job half done when compared with the multi-week pullbacks this rally has experienced over the past year. The worry for investors will be that the drop from last week's highs for US markets will not have been 'enough' to reset indices for the next push higher, and with concerns about a much-reduced US stimulus package now rearing their heads we may see the selling resume later in the week. European markets had been on the slide well before the US joined in last week, but are at the mercy of further falls if the much bigger US markets decide that their selling is not yet done."
The pound was quoted at USD1.3666 at the London equities close, down from USD1.3712 at the close Friday.
The euro stood at USD1.2076 at the European equities close, down from USD1.2135 late Friday. Against the yen, the dollar was trading at JPY104.95, up from JPY104.75 late Friday.
Brent oil was quoted at USD55.82 a barrel at the London close, down from USD56.00 at the close Friday.
The economics calendar on Tuesday has the UK Nationwide house price index at 0700 GMT, followed by eurozone GDP at 1000 GMT and the US Redbook index at 1355 GMT.
In the UK corporate calendar, oil major BP will issue full year results, and blue chip energy giant SSE will publish a trading statement. Midcap lender Virgin Money will also publish a trading statement, as well as real estate agent Foxtons Group.
By Paul McGowan; [email protected]
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