26th Jan 2016 16:55
LONDON (Alliance News) - A rebound in oil prices and a positive stock market open in the US following upbeat economic data helped London-listed stocks end higher Tuesday.
After falling at the open, the FTSE 100 closed the day up 0.6% at 5,911.46 points, and the FTSE 250 closed up 0.2% at 16,179.02. However, the AIM All-Share fell 0.7% at 683.72.
European stocks also overturned a lower start, with the CAC 40 in Paris ending up 1.1%, and the DAX 30 in Frankfurt up 0.9%.
On Wall Street at the European equity market close, the DJIA was trading up 1.5%, the S&P 500 was up 1.1%, and the Nasdaq Composite was up 0.7%.
"A solid, if slightly lower than expected, flash services [Purchasing Managers' Index] coupled with the best [Conference Board] consumer confidence figure since last September helped the Dow Jones get off to an impressive start this Tuesday," said Connor Campbell, financial analyst at Spreadex.
The Conference Board said its consumer confidence index climbed to 98.1 in January from a downwardly revised 96.3 in December. Economists had expected the index to edge down to 96.0 from the 96.5 originally reported for the previous month.
"For now, consumers do not foresee the volatility in financial markets as having a negative impact on the economy," said Lynn Franco, Director of Economic Indicators at the Conference Board.
Meanwhile, a report from Markit said its flash service PMI came in at 53.7 in January, down from 54.3 in December and below economists' estimate of 54.0. This would indicate the slowest expansion in the service sector since December 2014.
Despite the solid US data, the pound appreciated against the dollar. At the London stock market close, sterling traded at USD1.4342, compared to USD1.4255 on Monday. The euro was also a touch higher at USD1.0850 on Tuesday versus USD1.0827 on Monday.
US investors will be looking ahead to earnings from tech giant Apple after the US closing bell.
In London, stocks were aided by a rebound in oil prices. Brent oil initially fell to a low of USD29.25 a barrel just after the stock market open, but went on to make solid progress throughout the rest of the session. At the London close Brent was quoted at USD31.68 a barrel, higher that at the USD30.72 seen at the close on Monday.
Chris Beauchamp, senior market analyst at IG said the price of oil was helped by rumours of production cuts.
"At this point, a decision between [the Organisation of Petroleum Exporting Countries] and non-OPEC members to cut production is not the important element; the key point is such talk allows the price to move upwards to a position where bears can hit the 'sell' button once again," Beauchamp said.
There could be more volatility in oil prices late Tuesday, with the release of the American Petroleum Institute's weekly crude oil stock at 2130 GMT.
Gold prices also made gains and were quoted at USD1,118.01 an ounce at the London stock market close, compared to USD1,107.65 on Monday. Gold miners Fresnillo, up 5.6%, and Randgold Resources, up 4.9%, ended amongst the best blue-chip performers.
"The reasoning for buying gold this time appears to be more as a function of dollar-selling before a potentially dovish Fed meeting rather than any flight to safety," said Jasper Lawler, market analyst at CMC Markets.
The US Federal Reserve will announce its policy decision at 1900 GMT on Wednesday. Analysts largely expect the central bank to leave policy unchanged after its December 'lift-off'.
Anglo American was the top performer in the FTSE 100, up 11%. The miner said its first sales cycle for its De Beers diamond business delivered a big increase in revenue compared to the final cycle it handled in 2015. The value of the rough diamonds sold in the first cycle improved to USD540.0 million, up from USD248.0 million for the final sales cycle of 2015.
Anglo said the holiday season in the UK was positive from a sales perspective, and the group was boosted by a manufacturing reduction which resulted in polished diamond stocks feeding through the sales pipeline, with the resulting reduction in stocks in turn driving firmer polished prices.
easyJet ended as one of the worst blue-chip performers, down 2.9%. The budget airline reported growth in passengers carried and load factor in the first quarter of its financial year, although revenue per seat and total revenue fell following the terrorist attacks in Egypt and Paris.
easyJet said the number of passengers carried in the quarter ended December 31 increased by 8.1% to 16.1 million, as the load factor rose by 0.6 percentage point to 90.3%.
In the FTSE 250, PZ Cussons ended as the worst performer, down 8.9%. The consumer products company said pretax profit edged slightly higher in the first half despite a dip in revenue, as it dealt with a drag on its results from a tough trading environment in Nigeria and a hit from currency weakness in Asia and Africa.
The company, which makes Imperial Leather and Carex amongst a range of personal care, homecare, food and electrical products, said its pretax profit for the six months to the end of November rose to GBP40.0 million from GBP39.7 million. The group will pay a flat interim dividend of 2.61 pence per share.
Crest Nicholson Holdings said pretax profit rose, revenue increased and it will pay a higher dividend following a robust year for the UK housebuilding industry.
The FTSE 250 housebuilder, which closed up 5.6%, said pretax profit for the year to the end of November was GBP154.0 million, up 32% year-on-year from GBP116.7 million.
Total sales revenue for the year rose to GBP804.8 million from GBP636.3 million, as the group sold 2,725 homes, up from 2,530, at an average selling price of GBP318,000, 14% higher than the GBP278,000 average at which it sold homes in the previous financial year.
In the economic calendar for Wednesday, the Gfk consumer confidence survey for Germany is at 0700 GMT, before UK mortgage approvals at 0930 GMT. US MBA mortgage applications are at 1200 GMT, new home sales are at 1500 GMT and the Energy Information Administration crude oil stock change is at 1530 GMT.
In the UK corporate calendar, there are trading statements from emerging markets-focused investment manager Aberdeen Asset Management, business software company Sage Group, soft drinks company Britvic, wealth manager Brewin Dolphin Holdings, and buy-to-let mortgage lender and consumer debt purchaser Paragon Group of Companies.
Copper miner Antofagasta will give a production report, whilst Aberforth Smaller Companies Trust and recruitment and outsourcing firm Staffline Group both report full-year results.
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Anglo AmericanCrest NicholsonRandgold ResourcesFresnilloeasyJetPz Cussons