Nerves ease on the back of upbeat UK GDP figures
London’s blue-chip index rose for the first time in six days on Tuesday after worries about turmoil in emerging markets eased.
A modest recovery in Asian territories soothed fears, turning all of Europe’s indices from red to green, with Spain’s IBEX leading the way adding on 1.24pc.
Britain’s bourse was kicked higher by official GDP figures revealing Britain’s economy grew last year at the fastest rate since pre-crash. However, a more robust recovery was held back by concerns that Turkey’s central bank would intervene to protect its currency slump and worries that the US Federal Reserve would sanction another $ 10bn (£6bn) cut in its bond-buying programme. The FTSE 100 put on 21.67, or 0.33pc, to close at 6572.33 while the FTSE 250 added 187.62, or 1.21pc, to 15715.83.
Despite construction being the only part of the economy to contract in the fourth quarter according to ONS data, companies in that sector all enjoyed a boost.
Mid-cap housebuilder Crest Nicholson (LSE: CRST.L – news) , which returned to the London Stock Exchange last year, added 2.80 to 355p after posting a 40pc rise in full-year profits and announcing dividend payouts totalling more than £16m. Its peers also rose, with Barratt Developments (LSE: BDEV.L – news) up 13.7 to 379.7p and Taylor Wimpey gaining 3.9 to 115.1p. Blue-chip builder Persimmon (Frankfurt: OHP.F – news) was 42p, or 3.36pc, better at £12.92.
Staying with the sector, property agent Grainger (LSE: GRI.L – news) lifted 7 to 218p and estate agent Foxtons picked up 12.6 to 337.2p, putting them among the FTSE 250 risers.
Apple (NasdaqGS: AAPL – news) suppliers ARM Holdings (LSE: ARM.L – news) and Imagination Technologies (Other OTC: IGNMF – news) both fell sharply in morning trading after the US tech giant disappointed the market with sales of its iPhones and a lukewarm outlook.
Liberum Capital said slower Apple sales would reduce ARM’s royalties below market expectations and the broker reiterated its “sell” recommendation.
The update wiped $ 40bn from Apple’s market value on Monday night, which dragged London-listed ARM 13, or 1.36pc, lower to 944.5p yesterday. Imagination recovered its heavy opening losses to close up 0.2 to 178p.
Carnival (LSE: CCL.L – news) shares sailed 68p higher, or 2.66pc, to £25.46 after US-listed liner Royal Caribbean reported strong results . The New York-listed company’s bullish outlook for 2014 dragged Carnival along in its wake, with Numis raising its rating from “hold” to “buy”.
“We believe that the read-across to Carnival is positive and we have increased our 2014 earnings per share forecast by 13pc, our target price from 2250p to 3000p and we have upgraded to buy,” the broker said.
F&C Asset Management (Other OTC: FCAFF – news) continued Monday’s gains after its second biggest shareholder, Standard Life (LSE: SL.L – news) , said that it was keeping its options open should a rival bidder challenge Bank of Montreal (Toronto: BMO.TO – news) ’s £708m takeover offer.
Aviva (Berlin: GU8.BE – news) , F&C’s biggest shareholder, is supporting the Canadian 120p-a-share offer, despite it being at the bottom end of its desired price range. Analysts at Canaccord also stirred the markets by raising the possibility of a rival bidder and F&C shares shot up 7, or 6.1pc to 122p to the top of the FTSE 250. Standard Life gained 3.5 to 371.5 and Aviva (Other OTC: AIVAF – news) put 11.5 to 456.5p
Mid-cap food group Greencore wobbled despite early gains of 4.5pc to close down 0.1 to 239p. The group reported a 7.2pc year-on-year increase in first-quarter sales. The sandwich and ready meal maker added to positive noises around the UK economy and said it was confident its full year will be in line with expectations.
Cairn Energy (LSE: CNE.L – news) was the FTSE 250’s biggest loser, as reports added to the misery of last week’s revelation that Indian tax authorities had called on the company. Indian media alleged that the oil group did not pay capital gains on 245.03bn rupees (£2.3bn) of capital gains, stoking fears that the company will face a lengthy protracted legal battle. Cairn lost 10.7 to 226.4p.
Nigeria-focused oil firm Afren (LSE: AFR.L – news) rose 6 or 4.14pc to 150.9p after marginally beating oil output production targets and forecasting double-digit growth over the next five years.
Miner Fresnillo and Randgold Resources (Dusseldorf: RGR1.DU – news) weighed on the FTSE 100, as did Tullow Oil (LSE: TLW.L – news) . Fresnillo (Other OTC: FNLPF – news) was the index’s biggest faller after missing its 2013 gold production target, though it did beat forecasts for silver production. Investors in the Mexican precious metals miner also suffered extra uncertainty due to a ban on the use of explosives at its Minera Penmont mine. A dip in the gold price took down Randgold by 52p to £41.05.
Tullow was hit after fears that investments in Kenya could be at risk if ethnic violence escalates in the country’s northern Marsabit county, where the British oil explorer has doubled its estimates fo 600m barrels. Some analysts Tullow off 14 at 829.5p could drop towards 805.5p before bouncing.
Over on Aim, shares in Hummingbird Resources (Other OTC: HUMRF – news) , the Liberia-focused gold exploration and development company, rose by 4.35pc to 36p on the back of Cantor Fitzgerald analysts starting coverage. “We believe Hummingbird’s progress on all fronts is impressive, yet the stock trades at a significant discount to its West African peer group,” they said.
Shares in Imperial Tobacco (LSE: IMT.L – news) and British American Tobacco (LSE: BATS.L – news) went up in smoke on the FTSE 100 after reports the Government could ban sales to under 18s of e-cigarettes seen as the solution for falling tobacco sales. Imperial lost 35 or 1.554pc to £22.17 while BAT sank 39.5 to £29.85.
Lloyds rose by 23.5, or 3.29pc, to 737p after further cost cutting will see the bank shed 1,080 jobs.
Meanwhile Royal Bank of Scotland was the third-biggest riser on the FTSE 100, despite unveiling a likely £8bn full-year loss on Monday. The taxpayer-backed bank jumped 11.7, or 3.52pc to 343.9p after the surprise news of £3bn of new provisions for past misconduct.