London close: FTSE continues to outperform ahead of lockdown lifting

London stocks closed above the waterline on Thursday, after the top-flight index hit its best level since the pandemic following dovish minutes from the US Federal Reserve.

The FTSE 100 ended the session up 0.83% at 6,942.22, and the FTSE 250 was 0.39% firmer at 22,247.54.

Sterling was mixed, meanwhile, last strengthening 0.06% on the dollar to $1.3745, but trading 0.38% weaker against the euro at €1.1530.

“The FTSE 100 has maintained its recent resilience and outperformance, closing at its highest level this year, and its best level since 26 February last year, while the FTSE 250 has also closed at a new record high,” said CMC Markets chief market analyst Michael Hewson.

“While other major indices have led the way in posting record highs in recent weeks, UK stocks appear to be finally finding favour with investors as an economic reopening beckons, even though the FTSE 100 still has a lot of ground to make up, before it has reversed its losses from last year’s peaks of 7,689.”

Hewson said the main laggards on Thursday were travel and leisure stocks, which he described as “surprising” given the optimism surrounding the lifting of lockdown restrictions, with easyJet, Wizz Air and Carnival slipping from recent peaks.

“One reason behind today’s weakness in this sector could be concerns about possible delays in the UK being able to complete its vaccination program on schedule, and a delay to the 17 May overseas travel deadline, given the change of advice with respect to vaccinating the under-30 cohort.”

On the macro front, investors were mulling a survey showing construction output rose at the fastest pace for more than six years in March as a revival in confidence spread across the sector.

The IHS Markit/CIPS UK construction purchasing managers' index registered 61.7 in March - a sharp rise from 53.3 in February and the strongest growth rate since September 2014.

Growth was spread across all major sections of the industry.

Housebuilding remained the strongest category and commercial construction and civil engineering had their best scores since the second half of 2014. Job creation accelerated to a 27-month high.

In equity markets, Johnson Matthey was up 1.48% after the specialty chemicals business said its annual performance would be around the top end of market expectations as it announced a strategic review of its health business.

Homewares retailer Dunelm gained 2.45% even as it reported a 16.8% fall in third-quarter sales, reflecting the impact of the latest national Covid lockdown, as it said it is set to finish the year "modestly ahead" of expectations.

Airtel Africa was boosted 2.17% by an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan.

On the downside, Smurfit Kappa was off 2.45%, Mondi lost 1.48%, DS Smith fell 1.45%, Direct Line Insurance slipped 0.52%, and Quilter was 0.12% weaker as their stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 6,942.22 0.83%
FTSE 250 (MCX) 22,247.54 0.39%
techMARK (TASX) 4,346.83 0.90%

FTSE 100 - Risers

Experian (EXPN) 2,648.00p 4.38%
Sage Group (SGE) 652.00p 4.10%
Aveva Group (AVV) 3,775.00p 3.99%
3i Group (III) 1,253.00p 3.47%
Anglo American (AAL) 3,084.00p 3.21%
Diageo (DGE) 3,187.00p 3.12%
Intertek Group (ITRK) 5,998.00p 3.08%
British American Tobacco (BATS) 2,858.50p 3.01%
Imperial Brands (IMB) 1,560.50p 2.94%
Reckitt Benckiser Group (RKT) 6,646.00p 2.71%

FTSE 100 - Fallers

Aviva (AV.) 406.60p -3.09%
Smurfit Kappa Group (CDI) (SKG) 3,509.00p -2.45%
Smith (DS) (SMDS) 414.30p -2.38%
BP (BP.) 298.45p -2.29%
Royal Dutch Shell 'A' (RDSA) 1,409.40p -2.15%
Royal Dutch Shell 'B' (RDSB) 1,346.40p -2.04%
International Consolidated Airlines Group SA (CDI) (IAG) 214.55p -1.51%
Melrose Industries (MRO) 172.55p -1.51%
Mondi (MNDI) 1,896.00p -1.48%
Prudential (PRU) 1,549.50p -1.12%

FTSE 250 - Risers

Bytes Technology Group (BYIT) 445.40p 4.68%
Hilton Food Group (HFG) 1,188.00p 4.00%
Liontrust Asset Management (LIO) 1,498.00p 3.70%
Future (FUTR) 2,100.00p 3.65%
Spirent Communications (SPT) 250.00p 3.31%
Herald Investment Trust (HRI) 2,220.00p 3.26%
Watches of Switzerland Group (WOSG) 736.00p 3.08%
Indivior (INDV) 137.60p 3.07%
Pagegroup (PAGE) 500.50p 3.07%
Plus500 Ltd (DI) (PLUS) 1,479.00p 3.02%

FTSE 250 - Fallers

Direct Line Insurance Group (DLG) 306.00p -5.06%
Carnival (CCL) 1,719.40p -4.42%
Elementis (ELM) 121.10p -3.60%
Hiscox Limited (DI) (HSX) 858.80p -3.38%
WH Smith (SMWH) 1,836.50p -3.34%
Cairn Energy (CNE) 164.80p -3.33%
Moneysupermarket.com Group (MONY) 271.80p -2.93%
Vectura Group (VEC) 115.00p -2.87%
easyJet (EZJ) 992.00p -2.79%
Wizz Air Holdings (WIZZ) 4,969.00p -2.54%