London close: Stocks continue recovery to finish Friday higher

London stocks finished in the green on Friday, having taken their cue from a late stage recovery on Wall Street the day before.

The FTSE 100 was 2.27% higher at 6,733.97, recovering from the two-year lows it ended at on Thursday, while the pound was up 0.39% against the dollar at 1.2693 and 0.25% versus the euro at 1.1089.

“Despite the snap recovery the London index has left the heady heights of 7,755 in January far in the rear view mirror and is threatening to start 2019 in bear territory,” said Fiona Cincotta, senior market analyst at City Index

Meanwhile, Lukman Otunuga, research analyst at FXTM, earlier said that the final trading week of 2018 had been “explosively volatile” and “wildly unpredictable”, due to geopolitical risks.

“Global sentiment repeatedly swung from extremely bearish to bullish this week as investors tussled with concerns over slowing global growth, US-China trade developments, Brexit-related uncertainty and a partial US government shutdown,” Otunuga said.

“Although US stock markets bounced back to life yesterday to end positive and Asian shares traded mostly higher this morning, it is certainly too early for any celebrations.”

Otunuga added that investor appetite for riskier assets was diminishing amid unfavourable market conditions, with global equity markets still vulnerable to downside shocks.

“The geopolitical risk factors weighing painfully on global sentiment are likely to encourage investors to seek safety in the Japanese yen and gold.”

Brexit was in focus after Labour Leader Jeremy Corbyn said the vote on the EU withdrawal agreement - due to happen in the week starting 14 January - must take place "as soon possible".

Corbyn urged Prime Minister Theresa May to cut the Christmas recess short and recall Parliament so that MPs can vote on the deal.

“I want us to have a vote as soon as possible, that’s what I’ve been saying for the past two weeks, and if that means recalling parliament to have the vote let’s have it,” the Labour leader told the Independent.

“But it looks to me the government has once again reneged on that and tried to put it back another week.”

MPs were due back in the Commons on 7 January.

Elsewhere, the latest data from UK Finance showed mortgage approvals fell 10.6% year-on-year, with gross mortgage lending across the residential market in November down 2% to £23.1bn.

Approvals for house purchase were 1.2% lower in November, remortgage approvals fell 20.3% and approvals for other secured borrowing decreased by 12.2%.

Credit card spending rose 7.5% year on year to £11.3bn, and over the past year, the outstanding level of credit card borrowing grew by 5.3%.

Personal borrowing through loans and overdrafts grew by 2.5% in the year to November, and personal deposits total grew by 0.7% with deposits held in instant access accounts up 3.1%.

“Overall mortgage borrowing across the residential property market remains stable and the trend in households' cash savings remains steady,” said Eric Leenders, managing director of personal finance at UK Finance.

Leenders added that higher spending reflected the growing use of credit cards as a preferred form of payment, particularly in travel, as consumers took advantage of stronger customer protection and value-added benefits.

Corporate news was thin on the ground during the slow end-of-year period, with Bank of Georgia Group rallying 4.07% after it said it had raised $35m in two separate deals to finance local businesses.

The group said it had cooperated with the Green for Growth Fund to raise $25m to finance micro and small enterprises, large businesses and public entities.

A second deal with the European Fund for Southeast Europe to raise $10m with a maturity of five years will support the working capital financing and investment needs of micro and small enterprises.

Irish building materials seller CRH gained 3.59% after saying it had completed the third phase of its €1bn share buyback programme, returning a further €100m to shareholders and taking the total since April to €800m.

BP and Premier Oil were in the green by 3.47% and 9.53% respectively as oil prices rose, with West Texas Intermediate up 2.17% at $45.62 per barrel and Brent crude 0.06% higher at $52.19, bouncing back from losses the day before.

According to fresh data from the US Energy Information Administration, released at 1600 GMT, crude stocks in America remained virtually unchanged last week, while refinery inputs were on average 58,000 barrels per day less than the previous week.

Outside the FTSE 350, Cambridge-based Xaar, which supplies industrial inkjet printheads, slumped 8.04% as it warned that revenue for 2018 will be below the previous year as trading in the three months to December has continued to be below its expectations.

Finally, the struggles facing high street retailers were highlighted by the collapse of HMV - not listed but still relevant - as it emerged that the music store chain was going into administration, putting more than 2,000 jobs at risk.

Market Movers

FTSE 100 (UKX) 6,731.43 2.23%
FTSE 250 (MCX) 17,424.65 1.96%
techMARK (TASX) 3,299.00 1.94%

FTSE 100 - Risers

Wood Group (John) (WG.) 510.60p 4.33%
Melrose Industries (MRO) 162.20p 4.14%
British American Tobacco (BATS) 2,564.00p 4.12%
Legal & General Group (LGEN) 232.60p 3.98%
Royal Bank of Scotland Group (RBS) 214.10p 3.88%
Evraz (EVR) 485.50p 3.81%
Hiscox Limited (DI) (HSX) 1,604.00p 3.75%
Micro Focus International (MCRO) 1,357.00p 3.71%
Prudential (PRU) 1,393.00p 3.65%
Standard Chartered (STAN) 602.90p 3.64%

FTSE 100 - Fallers

Randgold Resources Ltd. (RRS) 6,546.00p -1.71%
Morrison (Wm) Supermarkets (MRW) 214.40p -0.09%
Rightmove (RMV) 428.05p 0.19%
SEGRO (SGRO) 586.80p 0.27%
Fresnillo (FRES) 870.00p 0.32%
GVC Holdings (GVC) 681.00p 0.52%
NMC Health (NMC) 2,708.00p 0.52%
Shire Plc (SHP) 4,560.00p 0.53%
Reckitt Benckiser Group (RB.) 6,066.00p 0.60%
Next (NXT) 4,048.00p 0.72%

FTSE 250 - Risers

Funding Circle Holdings (FCH) 325.40p 10.68%
Premier Oil (PMO) 60.56p 8.93%
Galliford Try (GFRD) 627.00p 8.76%
IntegraFin Holding (IHP) 305.50p 7.42%
CYBG (CYBG) 186.00p 6.35%
Morgan Advanced Materials (MGAM) 261.60p 6.17%
TBC Bank Group (TBCG) 1,488.00p 6.13%
TI Fluid Systems (TIFS) 166.20p 5.86%
Metro Bank (MTRO) 1,701.00p 5.72%
NewRiver REIT (NRR) 206.00p 5.64%

FTSE 250 - Fallers

Bakkavor Group (BAKK) 129.00p -3.87%
HGCapital Trust (HGT) 1,765.00p -2.22%
IP Group (IPO) 108.40p -2.17%
Superdry (SDRY) 451.13p -1.93%
Caledonia Investments (CLDN) 2,825.00p -0.53%
Auto Trader Group (AUTO) 434.10p -0.48%
Ferrexpo (FXPO) 192.75p -0.44%
Dechra Pharmaceuticals (DPH) 2,034.00p -0.39%
Riverstone Energy Limited (RSE) 1,080.00p -0.37%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 88.00p -0.23%