23rd Jan 2015 16:55
LONDON (Alliance News) - London stock indices ended higher for a seventh consecutive session Friday, as European equity markets continued to be buoyed by the European Central Bank's decision to launch a full-blown quantitative easing programme, although London mining and oil stocks were hit by falling commodity prices.
The FTSE 100 closed up 0.5% at 6,832.83 and the FTSE 250 ended up 0.5% at 16,458.90, The FTSE 100 has gained 4.3% over the course of this week. The AIM All-Share index again underperformed, closing fractionally lower at 696.26.
European stock indices continued their surge on the back of the ECB's announcement Thursday. The CAC 40 closed up 1.9% at 4,640.69 its highest close since June 2008, and the DAX 30 ended up 2.1% at 10,649.58 continuing its run of record highs.
However, at the European market close, the DJIA and the S&P 500 were down 0.2% and the Nasdaq Composite was up 0.3%.
ECB President Mario Draghi said Thursday the bank will start buying sovereign debt in March at a rate of EUR60 billion a month through September 2016 in a bid to revive the moribund European economy, a higher figure than expected. However, the bank also said it will continue until there is a "sustained adjustment in the path of inflation which is consistent with" the ECB's aim of achieving inflation rates below, but close to, 2% over the medium term, making the process effectively open-ended.
While stocks were lifted, the euro continued lower against other major currencies. On Friday, it hit an 11-year low of USD1.1113 against the dollar. The pound reached a near seven-year high against the euro at EUR1.3458.
After the ECB's move, the focus in Europe has shifted to Greece ahead of Sunday's election. According to opinion polls, left-wing party Syriza is heading for a comfortable victory, and there are fears that a Syriza-led coalition would try to renegotiate Greek debt and end austerity measures.
"As anti-bailout, anti-austerity Syriza extend their lead in the polls, their leader Alexis Tspiras ominously said he would work with his European peers, but not [German Chancellor] Angela Merkel. It is this kind of statement the market should be wary of; the ECB and the Eurozone in general may have a battle on their hands if Syriza can form a government in Greece as they seek to radically overhaul the country’s financial situation, a financial situation that is intrinsically linked to ECB and IMF monetary policy," said Connor Campbell, financial analyst at Spreadex.
Copper prices were again in the spotlight after falling to five-and-a-half year lows last week. Copper stocks on the London Metal Exchange are still rising even after the recent price slump, Reuters reported Friday. Citing analysts and traders, the report said the rise in stocks suggests that consumers are holding back purchases even with such weak prices.
Glencore, down 5.8%, Antofagasta, down 4.8%, Anglo American, down 3.6%, and Rio Tinto, down 2.8%, were amongst the worst-performing FTSE 100 stocks. In the FTSE 250, Vedanta Resources, down 8.4%, was the worst performer, while KAZ Minerals fell 5.7%.
Gold prices also dropped from recent highs following the ECB's announcement. The yellow metal had reached a high of USD1,307.59 an ounce on Thursday, but hit a low of USD1,283.80 an ounce on Friday.
Randgold Resources closed down 2.4% and Fresnillo ended down 2.0%, both amongst the biggest blue-chip fallers. In the FTSE 250, Centamin, down 7.9%, and Acacia Mining, down 6.2%, were amongst the worst-performing stocks.
The FTSE 350 Mining index was the worst-performing sector index, closing down 3.4%.
Oil prices were again in focus after the death of Saudi King Abdullah bin Abdulaziz al Saud. Newly enthroned King Salman, 79, Abdullah's half-brother, has succeeded him, pledging to maintain the policies of his predecessors. However, investors were concerned oil policy might change. Brent oil was trading slightly lower on the day at the close of London equity trade, at USD49.08 a barrel. US benchmark West Texas Intermediate fell significantly to USD46.16 a barrel.
Tullow Oil closed down 4.4%, while BG Group ended down 2.1% and Weir Group down 1.5%. Hunting, down 6.5%, and AMEC Foster Wheeler, down 2.2%, were both amongst the worst-performing stocks in the FTSE 250.
Jimmy Choo closed as the best mid-cap performer, up 6.0%. The luxury shoe maker said revenue grew by 12% in local currency terms in 2014, with demand for its shoes in Asia the main driver of growth. The company said net revenue for 2014 was GBP299 million, up from GBP282 million in 2013, representing growth of 6.2% at actual currency, but 12% at constant currency rates. Retail revenue grew by 8.7% at actual rates to GBP193 million, with wholesale increased slightly by 1.9% to GBP100 million. Retail like-for-like sales grew by 5.7% at constant currency, buoyed by online.
The pound was helped after UK retail sales increased unexpectedly in December, though at a slower rate than in November. Retail sales volume, including fuel, increased 0.4% on the month in December after a 1.6% rise in November, the Office for National Statistics said. Retail sales were expected to decline 0.6%.
The economic calendar on Monday is light. German IFO surveys for January will be released at 0900 GMT, UK BBA mortgage approvals are due at 0930 GMT, and eurozone retail sales will be at 1000 GMT.
In the corporate calendar, engineering data and design IT system provider AVEVA Group will issue an interim management statement as will FTSE 250-listed property investor LondonMetric Property. Filtration and environmental technologies company Porvair and staffing company SThree will both be reporting full-year results.
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Tullow OilAMFW.LHuntingJimmy ChooAnglo AmericanKAZ.LRio TintoCentamin PLCSTHR.LPorvairVedanta ResourcesAVV.LRandgold ResourcesACA.LWeir GroupLondonMetricFresnilloGlencoreBG..L