London close: Stocks finish firmer as stimulus hopes buoy markets

London stocks finished in positive territory on Thursday, on the back of renewed hopes that fiscal stimulus is in the pipeline stateside, as the pound recovered from earlier dips.

The FTSE 100 ended the session up 0.53% at 5,978.03, and the FTSE 250 was 0.81% firmer at 17,946.16.

Sterling was in the green as well, last rising 0.2% against the dollar to $1.2945, and gaining 0.28% on the euro to €1.1013.

“Equity markets are showing decent gains on renewed hopes of a stimulus package in the US,” said CMC Markets analyst David Madden.

“President Trump claimed that Congress has restarted talks in relation to a coronavirus relief package, but no further details were given.

“The back-and-forth in relation to the stimulus programme has been the main story of the last few sessions.”

Madden noted that, earlier in the week, Trump declared that the discussions were brought to an end, and that there would be no stimulus scheme until after the election.

“Now there has been a u-turn, and it would not be the first time that the US leader changed his mind in a short period of time.

“Traders’ reacted well to the news, especially seeing as European markets underperformed against their US equivalents yesterday.”

Neil Wilson from Markets.com added that the “yo-yo week” on Wall Street had continued overnight, with stocks bouncing after Donald Trump tweeted support for a range of fiscal stimulus measures, having earlier set the market down by calling off talks on a comprehensive package until after the election.

“Whether it’s now or after November, what’s been made clear to investors is that fiscal stimulus is on its way,” he said.

“The timing becomes less important - doubts would resurface if there is a contested election result that leaves Washington lawmakers unable to come to a deal.

“However, Joe Biden’s lead in the polls would suggest this is becoming less likely, albeit my inclination is that Trump will do a lot better than the polls indicate.”

There was also positive news on the Covid-19 front, with Regeneron and Eli Lilly's antibody treatments returning positive results according to the companies.

In economic news, initial jobless claims in the US fell from a revised print of 849,000 to 840,000 in the week ended 3 October, short of expectations for 825,000.

The reading marked the sixth straight week that saw claims hover at around 800,000, indicating a potential slowdown in the US labour market recovery.

Since the beginning of the Covid-19 pandemic in mid-March, nearly 63.6 million Americans have applied for jobless benefits, according to figures from the Department of Labor.

Continuing claims, meanwhile, dropped by just over one million to hit 10.98 million.

In equity markets, London Stock Exchange Group was down 0.27% as it inched closer to clinching a €5.3bn deal, including debt, to carve off Borsa Italiana to Euronext NV and two Italian institutions, according to reports from Bloomberg.

Hargreaves Lansdown was off 4.96%, after reporting a “good start” to the financial year with £0.8bn of net new business and revenue up 12% in the first quarter.

Revenue rose to £143.7m from £128.1m in the three months to the end of September.

Net new business was down from £1.7bn the year before, but the FTSE 100 company said the year-earlier period was boosted by £0.9bn of back book transfers.

CMC Markets was 5.9% weaker, even after it upgraded its guidance for annual revenue after trading revenue more than doubled to a record in the first half.

The online trading platform said net trading revenue rose to about £200m in the six months to the end of September from £85m a year earlier.

Client income retention was "well in excess" of previous guidance for more than 80%.

Tobacco company Imperial Brands was down 0.55% after saying it expected full-year earnings to be 6% lower, as it made higher provisions for stock and bad debts, citing ongoing Covid-19 uncertainties.

The firm, which makes Peter Stuyvesant and John Player cigarettes, said revenue would be flat on a constant currency basis as better-than-expected tobacco sales offset a slump in new generation products and lower duty-free sales due to the collapse in international travel caused by the coronavirus pandemic.

On the upside, TalkTalk rocketed 14.34% after revealing it was in discussions to be taken private by Toscafund Asset Management, after the investment firm approached it about a cash offer worth £1.12bn.

Toscafund's 97p-per-share proposal valued the shares at 16.4% more than Wednesday's closing price.

It contained a number of conditions including that Charles Dunstone, TalkTalk's founder and executive chairman, supported the deal and agreed to "an election for any unlisted share alternative" for his shares in the company.

EasyJet ascended 2.25% after it reported a 50% fall in passenger numbers for its full year, to 48 million, in line with a decrease in capacity of 48% to 55 million seats.

The FTSE 250 low-cost airline said in a trading update that the load factor for the year ended 30 September was down 4.3 percentage points at 87.2%.

Capacity in the fourth quarter was 38% of its previously-planned levels, with easyJet flying nine million passengers during the period with a load factor of 76.3%.

Market Movers

FTSE 100 (UKX) 5,978.03 0.53%
FTSE 250 (MCX) 17,946.16 0.81%
techMARK (TASX) 3,861.48 1.13%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 195.35p 24.70%
International Consolidated Airlines Group SA (CDI) (IAG) 107.50p 10.26%
Taylor Wimpey (TW.) 121.25p 4.26%
Intermediate Capital Group (ICP) 1,350.00p 3.93%
BT Group (BT.A) 106.55p 3.60%
Barratt Developments (BDEV) 542.00p 3.24%
Royal Dutch Shell 'A' (RDSA) 999.50p 2.67%
Barclays (BARC) 107.10p 2.49%
Royal Dutch Shell 'B' (RDSB) 961.30p 2.37%
BP (BP.) 220.85p 2.32%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 1,514.50p -4.63%
Smith (DS) (SMDS) 298.90p -3.33%
Smurfit Kappa Group (SKG) 3,106.00p -2.65%
Mondi (MNDI) 1,639.00p -2.61%
Associated British Foods (ABF) 1,895.50p -1.97%
InterContinental Hotels Group (IHG) 4,281.00p -1.63%
Pearson (PSON) 544.80p -1.63%
Homeserve (HSV) 1,206.00p -1.31%
Ocado Group (OCDO) 2,460.00p -1.24%
BHP Group (BHP) 1,646.40p -0.91%

FTSE 250 - Risers

TalkTalk Telecom Group (TALK) 97.50p 17.05%
Crest Nicholson Holdings (CRST) 242.00p 9.40%
Cineworld Group (CINE) 29.52p 9.33%
Aggreko (AGK) 429.20p 7.73%
Redrow (RDW) 459.00p 6.84%
Wetherspoon (J.D.) (JDW) 931.50p 6.01%
Meggitt (MGGT) 312.30p 5.97%
Network International Holdings (NETW) 294.60p 5.90%
Caledonia Investments (CLDN) 2,620.00p 5.22%
4Imprint Group (FOUR) 2,000.00p 5.19%

FTSE 250 - Fallers

CMC Markets (CMCX) 343.00p -5.90%
Hilton Food Group (HFG) 1,174.00p -3.61%
Investec (INVP) 155.00p -3.43%
Indivior (INDV) 105.80p -3.11%
Trainline (TRN) 386.60p -3.11%
Future (FUTR) 1,934.00p -3.11%
Vesuvius (VSVS) 412.00p -2.51%
Royal Mail (RMG) 243.00p -2.41%
Ninety One (N91) 214.60p -2.00%
Unite Group (UTG) 863.00p -1.99%