20th Mar 2015 17:02
LONDON (Alliance News) - The FTSE 100 broke through 7,000 points on Friday for the first time in its history, led higher by its heavily weighted resource sector amid a wider equity rally in Europe and the US.
Despite the blue-chip index hovering tantalising just below the 7,000 mark for a month or so, the market seemed reluctant to push it past the psychological barrier, and it seemed for much of the day that the landmark would remain out of reach. However, in late afternoon trading, the breakthrough occurred with some gusto. The index had reached 6,000 points just over 17 years ago.
After setting a new record intraday high of 7,024.21, the FTSE 100 closed up 0.9% at 7,022.51, its fifth successive day of gains. The FTSE 250 also pushed onto a record high close of 17,537.62, up 0.6% on the day. The AIM All-Share lagged behind, closing up just 0.1% at 715.89.
European stocks also made strong gains, with the French CAC 40 closing up 1.0% at 5,087.49, its highest close since May 2008, while the German DAX 30 closed up 1.2%.
Wall Street was also performing well at the European equity market close, with the DJIA up 1.0%, the S&P 500 up 0.9%, and the Nasdaq Composite is up 0.8%.
Oil-related stocks and mining companies dominated the best performers list in the FTSE 100 Friday as commodity prices rose due to a weaker dollar. At the London stock market close, the pound traded at USD1.4959, and the euro at USD1.0839.
Brent oil was quoted at USD55.14 a barrel, while West Texas Intermediate stood at USD47.27 a barrel. Precious metals also were trading higher, with gold up 1.2% on the day at USD1,186.39 an ounce, and silver up 4.5% at USD16.882 an ounce.
"Dollar weakness has meant 'general advance' has been ordered across the commodities complex, with silver racing higher and oil lifting itself as well. This is a trade that may play itself out for a short time, but the dollar's temporary setback is just that, and we can expect a resumption of the 'long dollar, short almost everything else' trade that prevailed in the first half of March," said IG analyst Chris Beauchamp.
Fresnillo, up 4.1%, Anglo American, up 3.6%, and Tullow Oil, up 3.1% were amongst the biggest blue chip gainers.
Furthermore, Tullow Oil said it has secured an additional USD450 million of capital under its existing credit facilities. Tullow has completed a reserve-based lend redetermination process, which it completes every six months, and this led to a USD200 million increase in lenders' commitments after a review of the company's assets. This increased the available debt capacity to USD3.7 billion from USD3.5 billion despite lower oil prices, Tullow said.
Tullow Oil will be demoted from the FTSE 100 to the FTSE 250 on Monday, following the recent quarterly review.
However, the best blue-chip performer on Friday was CRH, up 5.1%. The Irish building materials company was lifted after the on-again, off-again merger between Switzerland's Holcim and France's Lafarge appeared to be back on. CRH will acquire a large set of assets from the merged companies.
Housebuilder Persimmon closed as the worst performer in the index, down 5.0% after the stock went ex-special dividend.
Shares in TSB Banking Group rose after Spain's Banco de Sabadell won the backing of Lloyds Banking Group on the way to agreeing a GBP1.7 billion deal to buy TSB, likely to mark the end of TSB's brief life as a London-listed company.
TSB, which was carved out of Lloyds and floated on the London Stock Exchange in June 2014, is valued at 340 pence per share under the deal. The company closed up 2.4% at 334.87 pence.
Debenhams ended as one of the worst performers in the FTSE 250, down 1.0%. N+1 Singer cut the department store operator to Hold from Buy after the stock exceeded the broker's previous price stance following a strong performance.
Karelian Diamond Resources, closed up 58%, the best performer in the AIM All-Share index. The company said it has discovered a potential new diamond source in the Kuhmo region in Finland. Karelian said the potential new source occurs in kimberlite body discovered by the company during follow-up pitting at the site.
In the economic calendar Monday there are US existing home sales for February at 1400 GMT and eurozone consumer confidence is at 1500 GMT.
In the UK corporate calendar, gold miner Centamin reports full-year results, as does private equity investor SVG Capital amongst others.
The changes from the latest FTSE quarterly index review will be implemented on Monday. Joining the FTSE 100 is Hikma Pharmaceuticals, replacing Tullow Oil. For more information on which companies will be switching indices follow the link below:
http://www.morningstar.co.uk/uk/news/AN_1425491238572981700/hikma-pharma-replaces-tullow-oil-in-ftse-100%3b-aa-virgin-money-join-ftse-250.aspx
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Tullow OilAnglo AmericanLloydsHikma PharmaceuticalsCentamin PLCDebenhamsKarelianCRHPersimmonFresnillo