London close: FTSE up as Lloyds, Barratt lead blue chips higher

Shares in London ended Wednesday on a mixed note after confirmation the UK saw better than expected economic growth at the end of 2016, with blue chips benefiting from a softer sterling.

FTSE 100 closed up 0.39% to 7,303.4 and FTSE 250 ended down 0.5% to 18,678.51.

The FTSE 350 index for personal goods soared almost 4% as consumer goods giant Unilever flew higher on news of a review to accelerate value delivery, days after it rebuffed would-be suitor Kraft Heinz.

The 350 index for banks rose almost 2% as the market liked Lloyds Banking Group lifting its full year pre-tax profits to £4.2bn, from £1.6bn. It announced a special 0.5p-a-share dividend.

Investors' reactions to Lloyds were in stark contrast to that received by HSBC on Tuesday, although it was up on Wednesday.

To the downside the story was one of falling miners, in tandem with lower industrial metals' prices.

Other blue chips moving ahead were Reckitt Benckiser, Tesco, BT Group and Shire. House-builder Barratt Developments rose after it posted a first-half pre-tax profit of £321m, up 8.8% on the same time a year ago.

"The focus of the day has largely been upon the UK economy, with a GDP upgrade boosting optimism ahead of next month's Article 50 activation," said IG market analyst Joshua Mahony.

"Despite the positivity of seeing Q4 growth revised up to 0.7%, the downward revision for 2016 growth from the Office for National Statistics (ONS), coupled with a fall in household spending sent the pound lower," he added in a statement.

The ONS data revealed UK gross domestic product grew 0.7% in Q4 2016, up a touch from the estimate of 0.6% growth at the end of last month.

However, for 2016, growth was 1.8% higher than the year before, revised down by 0.2 percentage points from the flash estimate.

Mahony and others observed that the UK economy appeared to be performing remarkably well given the uncertainty surrounding a post-Brexit Britain, ushered in by PM Theresa May.

There was also little reason to believe UK Chancellor Phillip Hammond would embark on any major spending spree at next month's annual budget.

Against this fabric, Europe's stock markets performed mostly positively, with the DAX and CAC 40 both rising as the Euro Stoxx 50 slipped a bit.

All eyes were now turned to the US, where trade began on a lacklustre note ahead of the Federal Open Market Committee's (FOMC) latest monetary policy minutes due at 19:00 GMT.

While the Dow Jones Industrial average was up a snip, the S&P 500 and Nasdaq Composite were mildly lower.

"The improving sentiment towards the US economy, prospects of higher US rates and the relentless 'Trump effect' have made the dollar king again," said FXTM's Lukman Otunuga.

"Today's main focus will be the FOMC meeting minutes this evening which has the ability to fuel the current bull rally or potentially limit gains," said research-analyst Otunuga.

"If the FOMC minutes are in harmony with the recent hawkish comments from Fed officials, then the greenback may be installed with further inspiration to trade towards $102.00 (on the dollar-spot index)," he added.

Market Movers

FTSE 100 (UKX) 7,303.40 0.39%
FTSE 250 (MCX) 18,678.51 -0.50%
techMARK (TASX) 3,355.82 -0.06%

FTSE 100 - Risers

Unilever (ULVR) 3,791.00p 5.70%
Capita (CPI) 558.50p 4.59%
Lloyds Banking Group (LLOY) 69.70p 4.39%
Rolls-Royce Holdings (RR.) 751.50p 2.59%
Reckitt Benckiser Group (RB.) 7,229.00p 2.18%
HSBC Holdings (HSBA) 679.70p 2.10%
BT Group (BT.A) 327.25p 2.01%
Royal Mail (RMG) 417.20p 1.73%
Randgold Resources Ltd. (RRS) 7,435.00p 1.50%
Associated British Foods (ABF) 2,618.00p 1.32%

FTSE 100 - Fallers

Anglo American (AAL) 1,309.00p -3.07%
InterContinental Hotels Group (IHG) 3,770.00p -2.81%
BHP Billiton (BLT) 1,367.50p -2.70%
Smurfit Kappa Group (SKG) 2,170.00p -2.08%
Antofagasta (ANTO) 851.00p -2.01%
Pearson (PSON) 633.00p -1.78%
Smiths Group (SMIN) 1,509.00p -1.57%
Coca-Cola HBC AG (CDI) (CCH) 1,950.00p -1.47%
Mondi (MNDI) 1,837.00p -1.40%
Babcock International Group (BAB) 888.00p -1.28%

FTSE 250 - Risers

UBM (UBM) 759.00p 4.47%
Capital & Counties Properties (CAPC) 309.30p 4.07%
Aldermore Group (ALD) 235.90p 2.79%
Unite Group (UTG) 626.00p 2.45%
ZPG Plc (ZPG) 391.10p 1.90%
Supergroup (SGP) 1,508.00p 1.89%
Petrofac Ltd. (PFC) 890.00p 1.77%
Spire Healthcare Group (SPI) 331.80p 1.72%
Galliford Try (GFRD) 1,526.00p 1.60%
Inmarsat (ISAT) 641.50p 1.34%

FTSE 250 - Fallers

Serco Group (SRP) 118.50p -19.77%
Weir Group (WEIR) 1,842.00p -8.90%
Indivior (INDV) 345.20p -6.60%
Hays (HAS) 147.20p -6.48%
Vedanta Resources (VED) 960.00p -5.33%
OneSavings Bank (OSB) 361.00p -3.53%
Hunting (HTG) 556.00p -3.22%
Genus (GNS) 1,758.00p -3.03%
Pagegroup (PAGE) 417.60p -2.43%
Evraz (EVR) 243.30p -2.37%