The FTSE 100 is now around 64 points from its record closing high of 6,930.2
Investors in London have Wall Street to thank for helping the FTSE 100 edge closer to a record high .
Britain’s benchmark index eventually finished at 6,865.86 today, up 27.8 points on the day and about 64 points lower than its highest ever close of 6,930.2, which was reached on the last trading session of 1999.
But while the index now looks set to push on to a new record, for much of the day the FTSE, which has risen for seven straight sessions, appeared to be running out of steam.
Despite strong gains from the likes of Bunzl (Frankfurt: BUZ1.F – news) , which jumped 102p to £15.85 after forecast-beating results, and Vodafone , 9.9 better at 252.3p following its share consolidation, it was only in the final hour and a half of trade that the London index rallied into positive territory. It was US markets that were responsible for pulling it over the line.
Buoyed by news of yet more US merger and acquisition activity, the S&P 500 surged 1.1pc to a fresh record, while the Dow Jones Industrial Average climbed as much as 1.2pc. Those moves helped the FTSE to rise out of the doldrums it languished in for most of the day and to set its second-highest ever close.
HSBC , off 18½ at 635.7p in the wake of poor full-year results, weighed on the London index throughout the session.
Furthermore, the miners once again impeded the progress made by the wider index and fell after reports of borrowing restrictions on the Chinese property sector stoked concern about the health of China’s economy. Resources shares are sensitive to the outlook for the nation as it is the world’s biggest consumer of metals.
Today’s news sent Antofagasta (Other OTC: ANFGF – news) down 22 to 933p, Rio Tinto (Xetra: 855018 – news) 64½p lower to £35.36½ and Anglo American (LSE: AAL.L – news) down 27p to £15.33½.
RSA Insurance (LSE: RSA.L – news) suffered the heaviest fall in the benchmark index, slumping 3.7 to 97½p on confirmation it is considering a rights issue to shore up its balance sheet.
In the FTSE 250 up 78.41 points at a record 16,539.39 worries that Rightmove (Frankfurt: 3JD.F – news) will face stiff competition from rival Agents’ Mutual dragged on the property website business, which closed down 94p at £26.60. Agents’ Mutual was set up by a number of estate agencies, including Savills (LSE: SVS.L – news) and Knight Frank, and is due to launch next year. Today, analysts at Canaccord Genuity (Other OTC: CCORF – news) downgraded their recommendation on Rightmove (LSE: RMV.L – news) to “hold”, noting that the group will be “challenged” by its new rival in 2015.
Deal excitement lifted others. News that Dixons Retail (Other OTC: DSITF – news) and Carphone Warehouse are in merger talks sent the former up 3.14 to 50.3p and latter 27 higher to 333p.
On a more speculative front, the surprise departure of Mothercare (Other OTC: MHCRF – news) chief executive Simon Calver spurred talk the baby equipment retailer could become subject of a takeover approach. Analysts at Oriel Securities told clients that “as a strong brand with international recognition, the absence of a CEO may leave Mothercare vulnerable to a bid”. This helped to push its shares 3 higher to 250½p.
Elsewhere among the day’s risers, Centamin , the Egyptian gold miner, climbed 4.2 to 57.8p following a report that a draft law would protect deals struck with the Cairo government from third-party legal challenges.
In October 2012, Centamin (Toronto: CEE.TO – news) was hit by just such a challenge, which resulted in a court annulling its right to dig at Sukari, its only operating mine. The company is still in the process of appealing that ruling and, although it continues to operate the mine as normal, the uncertainty has inevitably weighed on its shares.
Lower down with the minnows, Clean Air Power (LSE: CAP.L – news) , a developer of technology that allows lorries with diesel engines to run on natural gas, put on 0.875, or 10pc, to 9.625p after disclosing a major order from J Sainsbury, a pre-existing customer. The company will supply the supermarket group with 50 vehicles outfitted with its dual-fuel system, doubling the size of Sainsbury’s dual-fuel fleet.
Caroline de La Soujeole, analyst at Cantor, said the order “marks the third contract award [to Clean Air Power] in the past seven days, showing there is strong momentum behind the company”.
Similarly, IT services group Redcentric (LSE: RCN.L – news) added 2 to 115½p on news that it had secured a multi-year contract with an NHS partner. The company said “annual revenues from the initial deployment [are] expected to be a seven-figure sum”.
News that Omega Diagnostics (LSE: ODX.L – news) had been awarded a $ 600,000 (£363,000) grant to set up an assembly facility in India for its disposable Visitect CD4 HIV test device sent its shares up 3.375 to 30½p, a 12.4pc gain.
= Gulf Keystone Petroleum graduates from Aim =
It has been a long-time coming but punters’ favourite Gulf Keystone (LSE: GKP.L – news) Petroleum is finally waving goodbye to Aim. The Kurdistan-focused oil explorer today disclosed that “on or after” March 24 it will move to the Main Market, almost two and a half years after it first said it was “actively pursuing” a switch.
GKP is seeking a standard listing and not a premium one, which had been the original intention and would have made it eligible for FTSE indices. GKP was up 4½ at 156 ¼ on news of its imminent Aim exit, a move that Westhouse Securities analyst Jamal Orazbayeva said may give the shares “a short-term push on the back of increased liquidity”. There was also excitement about the information GKP will have to provide, ahead of its new listing, on the size of its Kurdistan assets.