Price: 6,807.58 Chg: 13.55 Chg %: Date: 16:44
– FTSE closes up 13.55 points at 6,822.42
– BoE Deputy warns ‘dangerous’ to ignore house price momentum
– Eurozone unemployment stuck at 11.8 per cent
– US non-farm payrolls rise 288,000 in April, employment drops
techMARK 2,794.49 +0.22%
FTSE 100 6,822.42 +0.20%
FTSE 250 15,930.92 +0.51%
UK stocks closed modestly higher, as investors digested strong corporate reports from both RBS and InterContinental Hotels, developments in Eastern Europe, and data out from both the US and Europe.
The FTSE 100 ended the session 13.55 points higher at 6,822.42, marking a gain of 136.73, or 2.05%, on the week.
Chris Beauchamp, Market Analyst at IG, this afternoon said: “It looks as if we will be five for five by the end of the session, with five days of gains behind us. Whats more, were now back to highs not seen since the beginning of March. With a three-day weekend looming in the UK, traders have opted not to push the market too far, so it looks to be a subdued end to the week.
“Bullish traders will feel very happy with their work, however, having taken the opportunity presented by pharma bid activity and great results from the banking sector to lift the index past its previous sticking point of 6,700.
“This momentum now needs to be sustained as we head towards the high water mark around 6,866. As we go into the long weekend, most investors will be crossing their fingers and hoping that the Ukraine situation does not deteriorate, even as Russia seeks to call a meeting of the UN Security Council. Todays late bout of selling towards the closing bell is an indication that the market is still nervous trading at these levels.”
House prices came into focus today, with the Bank of England Deputy Governor Jon Cunliffe warning it would prove “dangerous to ignore the momentum that has built up in the UK housing market”.
He said the “pent-up demand” in both London and other parts of the UK “paints a picture of further pressure on transactions that could take us quickly to pre-crisis rates”.
That came as it was reported that London has set a new record after selling an unfurnished apartment for 140m in the luxury block of flats at One Hyde Park.
Reuters spoke to the developer of the apartments, Nick Candy, who told them there is “a concern over the market overheating”.
Yesterday Nationwide revealed that house prices increased by 1.2% during April to reach 183,577 following several months of moderation. That left prices standing 10.9% higher than a year ago, the first double-digit gain in four years.
Acting as a back drop to the day’s session, it was reported by the BBC that many pro-Russian rebels have been killed, injured and arrested during the Ukraines governments offensive in the eastern Ukrainian city of Sloviansk.
Eurozone unemployment stuck at 11.8%
The Eurozones unemployment rate remained unchanged for March, standing at 11.8% for a fourth month. It means that excess capacity in the labour market will continue to pressure prices lower. Furthermore, unemployment in Germany continues to be half that in France, Capital Economics pointed out.
Meanwhile, the Markit Eurozone purchasing managers index for April rose to a reading of 53.4, from a preliminary estimate of 53.3 and of 53 for the month before, signalling an expansion in activity levels for a tenth successive month. The consensus estimate had been for a reading of 53.3.
US non-farm payrolls rise 288,000 in April, employment drops
Over in the States, non-farm payrolls increased by an impressive 288,000 in April, well ahead of the 220,000 rise expected by analysts and the previous months initial reading of 192,000. Figures for March and February were revised higher by a combined 36,000.
Meanwhile, the unemployment rate dropped to 6.3%, from 6.7% in March. The consensus forecast was for a smaller fall to 6.6%.
However, not all aspects of the report were positive, with the participation rate falling to 62.8% from 63.2% and wage growth slowing to 1.9% from 2.1%.
Analysts at Berenberg said that weak wage growth during the month gives the Fed room for patience.
News of special dividend payment lifts InterContinental Hotels (IHG)
A special dividend and a strong first-quarter performance were plated up for IHG shareholders today, after it delivered its best RevPAR performance in seven quarters.
RBS also pleased investors after saying that pre-tax profit surged to 1.64bn in the first three months of 2013, up from 826m the year before and ahead of forecasts.
This came despite a 2% fall in income to 5.05bn, as expenses fell 6% and impairment losses dropped 65%.The first-quarter [statement] appears at first read to be way above consensus and our forecast, said Analyst Mike Trippitt at Numis Securities.
Barratt Developments climbed after the group had its ‘buy’ rating reiterated by Citigroup. Building merchant Travis Perkins was also higher.
Meanwhile, Hargreaves slumped after Citigroup opted to reiterate its ‘sell’ rating on the stock, and despite increasing its target price from 780p to 1,000p.
British American Tobacco was another notable faller, hit in part by a reiterated ‘hold’ rating from Societwe Generale.
Beverage cans maker Rexam fell after saying that regional trading conditions were mixed in the first quarter. The company also announced that foreign exchange movements will be a headwind going forward, while metal premiums are at record highs. Packaging peer Mondi was also lower.
FTSE 100 – Risers
InterContinental Hotels Group (IHG) 2,190.00p +8.20%
Royal Bank of Scotland Group (RBS) 331.70p +8.19%
Kingfisher (KGF) 426.40p +2.01%
Antofagasta (ANTO) 790.50p +1.87%
BHP Billiton (BLT) 1,931.00p +1.85%
Barratt Developments (BDEV) 375.00p +1.79%
Rio Tinto (RIO) 3,247.00p +1.47%
Smith & Nephew (SN.) 917.50p +1.38%
SABMiller (SAB) 3,252.00p +1.32%
Randgold Resources Ltd. (RRS) 4,739.00p +1.30%
FTSE 100 – Fallers
Associated British Foods (ABF) 2,900.00p -3.24%
Hargreaves Lansdown (HL.) 1,193.00p -1.81%
Johnson Matthey (JMAT) 3,308.00p -1.52%
British American Tobacco (BATS) 3,396.50p -1.52%
Smiths Group (SMIN) 1,321.00p -1.49%
William Hill (WMH) 355.60p -1.39%
Rolls-Royce Holdings (RR.) 1,026.00p -1.35%
British Sky Broadcasting Group (BSY) 889.00p -1.28%
Rexam (REX) 504.00p -1.18%
Sainsbury (J) (SBRY) 321.30p -1.17%
FTSE 250 – Risers
Lonmin (LMI) 292.60p +4.76%
Redrow (RDW) 305.00p +4.67%
Kazakhmys (KAZ) 246.00p +4.19%
Serco Group (SRP) 353.40p +3.94%
Capital & Counties Properties (CAPC) 347.90p +3.73%
Taylor Wimpey (TW.) 108.60p +3.13%
Bellway (BWY) 1,485.00p +3.05%
Dixons Retail (DXNS) 48.00p +3.00%
Cable & Wireless Communications (CWC) 53.75p +2.97%
Berkeley Group Holdings (The) (BKG) 2,412.00p +2.90%
FTSE 250 – Fallers
Pace (PIC) 337.00p -7.06%
Brown (N.) Group (BWNG) 465.00p -4.46%
Petra Diamonds Ltd.(DI) (PDL) 157.90p -3.37%
AL Noor Hospitals Group (ANH) 1,000.00p -2.72%
Just Retirement Group (JRG) 165.90p -2.58%
Playtech (PTEC) 640.50p -2.36%
Phoenix Group Holdings (DI) (PHNX) 676.00p -2.24%
Xaar (XAR) 761.00p -2.00%
ITE Group (ITE) 224.80p -1.96%
Telecity Group (TCY) 710.00p -1.87%