17th Jun 2016 15:56
LONDON (Alliance News) - London stocks ended higher Friday as banks and housebuilders rebounded from losses earlier in the week after Brexit campaigns were suspended following the murder of Labour MP Jo Cox.
Cox was shot and stabbed in Birstall in West Yorkshire on Thursday afternoon after she had held an advice surgery for her constituency. The alleged gunman has been arrested and some reports have said he shouted "Britain first" at Cox, a prominent Remain campaigner, prior to attacking her.
On Friday, Prime Minister David Cameron, Labour leader Jeremy Corbyn and Commons speaker John Bercow paid tribute to Cox in the West Yorkshire town where she was killed. Corbyn said Parliament is to be recalled on Monday to allow MPs to pay tribute to Cox.
Markets took the pause in the Brexit campaigns as an opportunity to recoup some of the heavy losses they incurred earlier in the week when the Leave campaign began taking the lead in opinion polls.
Banks and housebuilders had taken much of the brunt of the selling in the week, but were amongst the best performers in the FTSE 100 on Friday. Lloyds Banking Group, up 6.0%, Standard Chartered closed up 5.5%, and Taylor Wimpey was up 4.5%.
Lloyds on Thursday won the backing of the UK Supreme Court to redeem GBP3.3 billion of costly bonds, in a decision that could save the bank up to GBP1.0 billion in interest payments.
The Supreme Court held that a "capital disqualification event" took place, with the enhanced capital notes - otherwise known as contingent convertible securities, or CoCos - issued in December 2009 no longer counting towards Lloyds' regulatory capital position.
Conversely, gold miners, which had outperformed this week as investors flocked to the safe-haven of bullion, ended the worst blue-chip performers. Randgold Resources, down 4.6%, closed as the worst performer in the FTSE 100 while Centamin, down 3.8%, ended amongst the biggest fallers in the FTSE 250.
The price of gold traded at USD1,286.70 an ounce at the London equities close Friday, lower than the USD1,309.49 an ounce seen at the London stock market close on Thursday.
Brent oil, meanwhile, was at USD48.39 a barrel at the close Friday, higher than the USD47.48 seen at the close Thursday.
The FTSE 100 ended the day up 1.2%, or 70.61 points, at 6,021.09. However, Friday's gains were unable to offset the weakness earlier in the week, meaning the blue-chip index closed the week down 1.6%, marking its third successive weekly loss.
The FTSE 250 index closed up 2.4%, or 390.00 points, at 16,422.04. The AIM All-Share ended up 0.7%, or 4.6 points, at 713.89.
European stocks also enjoyed a rebound. The CAC 40 in Paris ended up 1.0% and the DAX 30 in Frankfurt ended up 0.9%.
On Wall Street at the London close, the Dow 30 and the S&P 500 were both down 0.7%, and the Nasdaq Composite was down 1.4%.
Also at the London stock market close, the pound traded the dollar at USD1.4264, higher than the USD1.4082 at the close on Thursday.
The euro appreciated against the greenback, trading at USD1.1248 at the European closing bell on Friday, versus USD1.1114 at the same time on Thursday.
National Grid shares closed down 0.3% after a UK parliamentary committee published a report recommending a "major change" in the way the UK energy system is operated by breaking up the gas and electric network operator, claiming the company has "conflicts of interest".
The Energy & Climate Change Committee, comprising cross-party members who examine the activities and policy of the UK Department for Energy & Climate Change, has called for a move toward local energy networks compared to one national network that distributes energy around the country as the market moves toward more low-carbon, renewable sources.
"National Grid's technical expertise in operating the national energy system must be weighed against its potential conflicts of interest. The independent system operator model has worked in the US. It is time for it to be brought to these shores," said Angus Brendan MacNeil, chair of the committee and the only member of the Scottish National Party on the board.
National Grid owns the electricity transmission system in England and Wales, with Scotland operating its own network, and also owns four of the eight gas distribution networks in Great Britain, having sold the other four networks it previously owned.
CDialogues ended as the worst performer in the AIM-All Share index, down 26%. It initiated a review of its business and assets after it received notice that the contracts it holds with telecommunications services firm Numbase, from which it generates all of its current revenue, will be terminated.
The mobile marketing company has been providing mobile marketing and campaign services via Numbase to mobile companies in Lebanon and Kuwait, under two contracts in each of the countries. Numbase has now said it will terminate the deals and CDialogues said it is holding talks with Numbase to try to seek alternative outcomes.
The four deals have different termination terms, but CDialogues said it anticipates all the deals will have been cancelled by the end of September, at the latest, should the plans proceed.
The economic calendar for Monday is very thin, with the Rightmove house price index for the UK at 0001 BST, Japanese trade balances at 0050 BST, the German producer price index at 0700 BST and the Deutsche Bundesbank's monthly report at 1100 BST.
The main focus of the week will of course be the UK's EU referendum, to take place on Thursday.
"Given their behaviour in the past few days the markets could be in for a real rough ride next week. The persistent polls likely to leak out in the run up to the referendum should leave the pound in a constant state of flux, while the FTSE may well see itself return to that 5900, 4 month low pretty quickly on Monday," commented Connor Campbell, financial analyst at Spreadex.
In the UK corporate calendar, wine retailer Majestic Wine reports full-year results and data capture technology company DRS Data & Research Services issues a trading statement.
Additionally, the changes from the latest FTSE index review will be in place from Monday. This includes generic-drug maker Hikma Pharmaceuticals returning to the FTSE 100, having been relegated to the FTSE 250 in March, to replace Inmarsat, the satellite communications company, which joined the blue-chip index only a year ago.
By Neil Thakrar; [email protected]; @NeilThakrar1
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