FTSE 100 finishes over 40 points ahead with housebuilders in support



  • FTSE 100 closes 40 ahead at 7,430



  • Royal Mail biggest faller



  • Eyes start to turn to tomorrow’s ECB monetary policy meeting


FTSE 100 finished the day over 40 points up, with housebuilders in support, and as US shares went north.


Britain’s blue chip index closed at 7,430, up over 40 points, or 0.59%.


The more UK focused FTSE 250 also made good gains – up over 80 points at 19,693.


plc () rose 2.44% to 609.50p to be the second highest Footsie gainer, after (), which gained  2.68% to 690p.


Also higher was home developer (), which added 2.35% to 2,442p, after an upbeat note on the sector from City firm Liberum.


The biggest loser was postal giant Royal Mail Group (), which shed 2.75% to 399.80p as it gave back gains made yesterday after posting a solid first quarter.


David Madden, at CMC Markets, noted: “Stock markets in Europe haven’t experienced much volatility today after we witnessed large moves yesterday.


“Also, investors are looking ahead to the European Central Bank meeting tomorrow, and even though we are not expecting a change in policy, the central bank is expected to adopt a less loose monetary policy in the coming months.” 


 


3.15pm…GSK confirms Horlicks sale as it shifts focus to drugs business


GlaxoSmithKline plc (LON:GSK) has confirmed reports that it plans to sell its Horlicks malt drink brand in the UK and will cut about 320 jobs in the country.


The pharmaceuticals giant will offload the business in the UK and close the site in Slough, England where the malted drink is made as part of plans to focus on its core drugs division.


GSK will also sell its MaxiNutrition brand in the UK and outsource some manufacturing activities currently undertaken at its site in Worthing, England.


The company said its plans are likely to result in 320 job losses over the next four years.


3.10pm…US stocks open higher, FTSE rises


It’s not been the most exciting day so far on the markets, but the FTSE 100 is at least in the black having broken through the 7,400 mark earlier and holding it throughout the afternoon.


The blue chip index is currently 34 points, or 0.5% higher, at 7,424.


US stocks opened in a similar fashion, making gains shortly after the opening bell despite predictions of a mixed start across the pond.


The tech-heavy Nasdaq index was the pick of the bunch, up 24.7 points to 6,369, while the S&P 500 added 6.3 points to 2,467.


Things were a bit more muted on the Dow Jones, although it is currently up a whopping 0.07%, or 14 points, to 21,589. Hey, a gain is a gain.


Barratt tops the risers, Royal Mail gives up Tuesday’s gain


Housebuilder PLC () was the shining light among the blue chips in London today, up 2.5% to 610.1p.


It’s a little tricky to put a finger on what exactly has piqued the interest of the market, but there was a bullish note from Liberum on the sector this morning.


The City broker said it expects house price inflation to slow but stay in positive territory as the sector has shown resilience amid Brexit uncertainty.


“We see value in the sector as housebuilders can keep showing surprising resilience and valuation is attractive.”


Reckitt rises as it sells foods business


Group PLC () has been towards the top of the risers throughout the day after it agreed a US$4.2bn deal with US-based Inc () to offload its foods business.


The decision to sell the food division – which includes the French’s, Frank’s RedHot and Cattlemen’s brands – is part of Reckitt’s efforts to streamline the business and cut debt following a strategic review.


Airliners easyJet PLC () and PLC () have dragged on the Footsie however, although () heads the list of fallers.


After posting a decent quarterly update yesterday, helped out by the surprise election, investors’ enthusiasm quickly waned.


 


Shares in the postal delivery group jumped by 3% or so yesterday, although it’s given most of those back today and is currently down 2.1% at 402p. 


1.30pm…ECB the centre of attention


The pound is holding steady against the euro and the dollar at the moment ahead of tomorrow’s ECB’s monthly policy meeting.


Sterling is up 0.12% versus the euro to €1.13, while it is fairly flat against the greenback at a shade over US$1.30.


When Mario Draghi takes to the stage tomorrow, analysts are widely expecting an end to the ECB’s stimulus programme when it announces its latest monetary policy decision.


As Paresh Davdra, chief executive of RationalFX explains: “The euro’s recent strength may have been predicated on the anticipation of a shift towards the tapering of quantitative easing.


“However, should the central bank remain dovish, it could see pressure eased on the pound, as investors still look towards the diminished possibility of a rate rise for the BoE following yesterday’s inflation data.”


1.15pm…FTSE ticks higher


A spot of brunch seemed to perk up the FTSE 100 as the clock struck 1pm.


The blue chip index was all huff and not much puff this morning, but the afternoon session has got off to a more upbeat start, with the Footsie up 22 points to 7,412.  


Group PLC () has been among the top risers throughout the day so far after it inked a US$4.2bn deal to offload its food business, which includes the French’s mustard brands.


Shares in the conglomerate are currently up around 1.5% to £79.26.


Joining Reckitt is Group PLC () which has surged towards the end of the morning and into the afternoon.


The telecoms giant – currently up by 1.2% to 222.3p – is set to give a quarterly update in a couple of days’ time so it could be investors getting excited for that.


There’s also some news from India that the major telcos – including – are looking to double the interconnect usage charge, which is what a service provider pays another to link a call to the latter’s network.


That would benefit the traditional firms such as which garner a large share of the IUC charges as most calls end on their networks. It would also put new kid on the block Jio on the losing side as it would have to pay out more.


() is still the biggest loser among the blue chips, down 2% to 403p.


The postal group surprised investors with a half-decent quarterly update, but that enthusiasm hasn’t lasted long, with the stock giving up almost all of Tuesday’s gains.


Over on the second tier, engineering firm PLC () slipped lower after it was on the end of several bearish broker notes.


Of particular concern for analysts at was the glut in oil supply which is keeping prices fairly depressed.


“We see increasing risks of an oil price, and thus rig count, decline which could negatively impact Weir’s O&G business in 2018.”


Shares in the FTSE 250-listed group dipped almost 2% to £19.24.


Mixed start predicted for US markets


Over in the States, it looks like it’ll be a mixed start for the markets.


The tech-heavy Nasdaq is seen opening 14 points higher at 5,895, with the S&P 500 set to open relatively flat at 2461.


It’s a different story for the Dow Jones though, which spread betting firms are predicting will open more than 6 points lower at 21,569. 


12.15pm…No more card surcharges


It’s been a contentious issue for years now, but starting next year businesses won’t be able to charge their customers extra if they choose to pay by debit or credit card.


The government has gone even further than what EU regulators as well, and have banned companies from adding surcharges to Amex and payments.


In 2010 alone, consumers spent the best part of £500mln on additional card charges, with airlines and small businesses the worst offenders.


Mercedes in trouble for ‘faked’ emission test reults 


If you’ve treated yourself to a new Merc recently, there’s a good chance there’s a letter in the post (that’ll please Royal Mail) inviting you to take your car back to an approved dealership.


The reason for that is Mercedes is the latest carmaker to become embroiled in the emissions fixing scandal which has rocked the likes of Volkswagen in recent years.


Owners of nearly every model sold in the UK in the past six years will be asked to return their cars, free of charge, so that the engines can be adjusted to reduce the amount of pollutants they emit.


That decision will likely prove a costly one for Merc and its parent company – potentially up to £200mln.


Speaking of Mercedes, did you catch the unveiling of its X-Class pickup truck earlier this week?


Chris Evans top earner at the BBC


Despite flopping as the new face of Top Gear last year, Chris Evans was the highest paid ‘talent’ on the BBC in 2016/17.


The presenter made around £2.2mln last year, with Match of the Day’s Gary Lineker a little way behind in second place. The former Spurs striker and ardent cheese & onion crisps fan still took home a whopping £1.8mln last year.


In the Beeb’s annual report, out today, director general Tony Hall said there is “more to do” on gender and diversity.


The highest paid female star was Strictly Come Dancing’s Claudia Winkleman, while George Alagiah was among a trio of black, Asian and minority ethnic background presenters to receive between £250,000 and £300,000.


There’s likely to be some handbags on set at this year’s Strictly as well, with the judges falling into different wage brackets. Cue phone calls from angry agents and unhappy celebs.


Aviva offloads Friends Provident for £340mln


() is offloading its loss-making Friends Provident International Ltd (FPIL) business to a subsidiary of International Finance Group Ltd for £340mln.


The UK insurance giant said the sale of FPIL, which provides life assurance and investment products in Asia and the Middle East, will allow it to focus on its more profitable core businesses.


FPIL – which used to sponsor the shirts of Southampton FC – made a post-tax loss of £2mln last year. The business is being sold to RL360 Holding Company Limited, owned by International Finance Group.


“Following a strategic review of FPIL, Aviva has concluded that the business is not central to the group’s strategy to focus on a small number of markets where it has scale and profitability or a distinct competitive advantage,” Aviva said in a statement.


8.30am…FTSE posts modest gains early doors


The FTSE 100 opened slightly higher this morning before quickly giving those gains up. It is currently down by 5 points, or 0.1%, at 7,385.


Group PLC () was the biggest riser in early deals – up 1.7% to £79.40 – after announcing that it has agreed to sell off its food business top US-based Inc () in a US$4.2bn deal.


The decision to sell the food division – which includes the French’s, Frank’s RedHot and Cattlemen’s brands – is part of Reckitt’s efforts to streamline the business and cut debt following a strategic review.


Miners were holding the blue chip index back though, with Ltd (), PLC () and Glencore PLC () all nursing losses as the prices of gold, silver and a host of other metals slipped.  


BBC to reveal how much stars earned last year


Elsewhere, the BBC’s director general, Tony Hall, will reveal how much the broadcaster paid its top talents and executives in 2016 later on this morning.


The annual report is due out at around 11am. Hall has already told some BBC news outlets that 96 people employed by the Beeb earned more than £150,000 last year, while the amount paid out to ‘talent’ was down 10% year-on-year.


Don’t worry though, those celebs and various hosts still pocketed a combined £30mln or so last year.

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