London close: Stocks end week on an up note, even as pound falls back
London stocks were in the green at the end of the week, amid signs of progress in Sino-US trade talks, and a drop in the pound as Westminster haggled with Brussels over the length of any extension to Article 50.
Investors also reacted positively to the US non-farm payrolls report for the month of March.
The FTSE 100 jumped 0.61% to 7,446.87, while the pound was down by 0.63% against the US dollar at 1.29943 and by 0.56% versus the euro to 1.1588, even as European Council President Donald Tusk reportedly pressed the bloc's remaining member states to offer the UK a one-year "flexible" Brexit extension.
Theresa May, meanwhile, wrote requesting a delay of up to 30 June, saying that if cross-party negotiations did not yield "a single unified approach" from Parliament, then MPs would be asked to vote on a menu of possible options for Brexit, which the government "stands ready to stand by".
Tusk told EU officials Britain could have an option to leave once the withdrawal agreement is ratified by parliament and was expected to outline his idea at a leaders' summit in Brussels next Wednesday. He was reported to have described the plan as "the only reasonable way out" of the current impasse.
May and her team were due to hold a second day of talks with the Labour party in a bid to break the Brexit deadlock. Both the prime minister and Labour leader Jeremy Corbyn are receiving conflicting calls from even within their own parties.
Meanwhile, the latest house price figures from lender Halifax showed a smaller than expected drop in March but are expected to remain subdued amid Brexit uncertainty.
House prices fell 1.6% on the month, compared to a 5.9% increase in February. Still, this was better than the 2.4% decline expected. On the year, prices rose 3.2% in March following a 2.8% jump the month before and versus expectations for a 2.3% increase.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said prices were still on a slowly rising path.
"The pick-up in the three-month average rate of year-over-year growth in Halifax’s measure of house prices goes against the grain of all other measures that we track, but a sustained period of falling house prices still isn't on the cards. Low unemployment and stable mortgage rates are sustaining housing demand, despite Brexit uncertainty," he said.
Market participants were also chewing over comments from US President Trump, who said on Thursday after a meeting with Chinese vice Premier Liu He that a trade deal between the two nations was about four weeks away, with some sticking points remaining. On a more positive note, Trump said the two sides had agreed "a lot of the most difficult points", although they still had some way to go.
"Confidence is reaching new levels that a trade deal will eventually be signed after many months of protracted negotiations," said FXTM research analyst Lukman Otunuga. "We believe that once the US-China trade deal is eventually announced, that could release pent-up demand and trigger a knee-jerk jump in risk-on assets. However, whether such gains are sustained depends on how markets interpret the technicalities of the deal, and what it means for a slowing global economy. As the saying goes, the devil is in the details."
Elsewhere on the macroeconomic front, the US Department of Labor reported a 196,000 increase in non-farm payrolls for March (consensus: 175,000), although at 0.1% month-on-month, gains in average hourly earnings came in short of forecasts for an increase of 0.3%.
"Overall, the market reaction seems to suggest that investors agree with our view that the Fed ended its tightening cycle in December last year, and that the next move in rates is likely to be down. Where we differ from markets is on the likely extent of any economic weakness and rate cuts," Capital Economics's Hubert de Barochez said following the release of the data.
In UK corporate news, GVC Holdings gained after saying it grew online gaming revenues at double-digit rates while its Ladbrokes bookmaking shops had a flat first quarter ahead of the crackdown on fixed-odds betting machines that began on 1 April.
Engineering and industrial software provider Aveva ticked up as it agreed to buy the software assets of MaxGrip, one of its partners since 2017, which optimises asset performance with reliability-centred maintenance solutions.
Power generator ContourGlobal rallied as it posted a 19% jump in 2018 earnings, boosted by acquisitions, and announced the appointment of Stefan Schellinger - former finance director of plastic and fibre products supplier Essentra - as its new chief financial officer.
Funding Circle was sharply lower as it announced plans to close its listed Funding Circle SME Income Fund.
In broker note action, shares in British Gas owner Centrica were knocked lower by a downgrade to 'add' at AlphaValue.
Stagecoach was hit by a downgrade to 'underperform' at Jefferies, while Hammerson was dented by a downgrade from Stifel and Dunelm was a little weaker after a downgrade by Peel Hunt.
Market Movers
FTSE 100 (UKX) 7,446.87 0.61%
FTSE 250 (MCX) 19,538.30 0.16%
techMARK (TASX) 3,565.37 0.19%
FTSE 100 - Risers
Prudential (PRU) 1,680.50p 2.69%
Rolls-Royce Holdings (RR.) 926.80p 2.52%
NMC Health (NMC) 2,526.00p 2.52%
Anglo American (AAL) 2,184.50p 2.20%
WPP (WPP) 869.00p 1.97%
Evraz (EVR) 650.00p 1.88%
CRH (CRH) 2,530.00p 1.85%
Smiths Group (SMIN) 1,500.50p 1.69%
Schroders (SDR) 2,882.00p 1.69%
Rio Tinto (RIO) 4,664.50p 1.66%
FTSE 100 - Fallers
Vodafone Group (VOD) 141.32p -2.16%
Berkeley Group Holdings (The) (BKG) 3,772.00p -1.85%
BT Group (BT.A) 223.85p -1.39%
Barratt Developments (BDEV) 617.80p -1.28%
Centrica (CNA) 110.70p -1.20%
Persimmon (PSN) 2,219.00p -1.20%
British Land Company (BLND) 598.40p -1.19%
Barclays (BARC) 162.76p -1.15%
Royal Bank of Scotland Group (RBS) 251.20p -1.14%
Marks & Spencer Group (MKS) 283.90p -1.11%
FTSE 250 - Risers
Amigo Holdings (AMGO) 211.00p 7.11%
Contour Global (GLO) 195.00p 6.91%
Bakkavor Group (BAKK) 126.60p 4.63%
Just Group (JUST) 65.00p 4.50%
Wood Group (John) (WG.) 530.00p 3.52%
TI Fluid Systems (TIFS) 212.00p 3.41%
Premier Oil (PMO) 100.25p 3.35%
Petrofac Ltd. (PFC) 516.60p 3.28%
Sanne Group (SNN) 550.00p 3.19%
Hill & Smith Holdings (HILS) 1,291.00p 2.95%
FTSE 250 - Fallers
Funding Circle Holdings (FCH) 315.00p -8.16%
Metro Bank (MTRO) 821.00p -6.55%
Stagecoach Group (SGC) 138.90p -5.83%
IG Group Holdings (IGG) 515.40p -4.70%
TP ICAP (TCAP) 276.20p -3.96%
Civitas Social Housing (CSH) 89.10p -3.57%
Royal Mail (RMG) 254.50p -3.34%
Hilton Food Group (HFG) 910.00p -3.29%
Go-Ahead Group (GOG) 1,922.00p -3.22%
Dixons Carphone (DC.) 143.80p -2.94%