London close: FTSE rises to 18-month highs as airlines take off
London stocks finished above water on Friday, as earnings optimism helped to offset concerns about inflation.
The FTSE 100 ended the session up 0.37% at 7,234.03, and the FTSE 250 was ahead 0.54% at 22,984.24.
Sterling was stronger as well, last rising 0.65% on the dollar to $1.3762, and advancing 0.68% against the euro to trade at €1.1870.
“It’s been another strong session for European markets, with airlines getting a lift after the US announced that it would be reopening its borders to vaccinated visitors on 8 November, and the UK government announced that fully-vaccinated passengers from red list countries can take a lateral flow test from 24 October, with decent gains for the likes of Lufthansa, Air France-KLM and IAG,” said CMC Markets chief market analyst Michael Hewson.
“The FTSE 100 has managed to sustain the gains from yesterday, consolidating at 18-month highs, helped by strong performances across a number of key sectors, with energy, financials and basic resource stocks all seeing strong gains, not to mention the outperformance of companies like Rolls-Royce, which is up over 25% from its September lows.
“The UK benchmark is also the one major market that hasn’t been able to recover its post pandemic highs so clearly has room to play catch up, and open up a move towards 7,400, towards the 2019 highs of 7,727.”
Across the pond, Americans unexpectedly resumed splashing out on goods and services last month.
According to the Department of Commerce, in seasonally-adjusted terms US retail sales volumes jumped at a month-on-month pace of 0.7% to reach $625.45bn.
That was far better than the 0.3% fall that the consensus was anticipating.
Additionally, August's 0.7% rise was marked up to 0.9%.
On home shores, Mediclinic rallied 12.25% as the private healthcare provider reported a rise in first-half revenue, driven by a jump in patient activity across its three divisions.
BP and Shell both gushed higher, rising 1.65% and 1.93% respectively, as Brent crude hit another three-year high.
Analysts at Berenburg gave BP an added boost, after upgrading the stock to ‘buy’, while miner Antofagasta was up 2.13% after an upgrade to ‘sector perform’ at RBC Capital Markets.
Harbour Energy racked up gains of 2.53% after an upgrade to ‘buy’ at Berenberg, while Qinetiq was trading 3.85% higher after heavy losses on Thursday and as Investec upped the shares to ‘buy’.
British Airways and Iberia owner IAG ascended 3.25% after the government said fully vaccinated passengers and children arriving in England from non-red list countries can take a lateral flow test from 24 October, instead of the more expensive PCR tests.
“That could lead to a rush of last-minute bookings for half-term travel, thereby benefiting airline earnings,” said Russ Mould, investment director at AJ Bell.
“The sector needs all the help it can get as it is one of the last industries still waiting to play catch-up with earnings following the pandemic.”
Jupiter Fund Management advanced 3.26% after it posted an increase in assets under management for the three months to 30 September.
On the downside, Rio Tinto lost 1.43% as the mining giant cut annual iron ore shipment forecasts, citing labour shortages in Western Australia.
Educational publisher Pearson fell 14.9% after it reported a rise in revenues as growth in assessment and qualifications offset lower US higher education enrolments due to Covid-19 infections.
FTSE 100 - Risers
Ocado Group (OCDO) 1,799.00p 3.78%
Evraz (EVR) 617.40p 3.76%
International Consolidated Airlines Group SA (CDI) (IAG) 182.92p 3.25%
InterContinental Hotels Group (IHG) 5,098.00p 2.58%
British Land Company (BLND) 503.40p 2.25%
Antofagasta (ANTO) 1,507.50p 2.13%
Flutter Entertainment (CDI) (FLTR) 14,620.00p 2.06%
Land Securities Group (LAND) 711.60p 1.95%
Royal Dutch Shell 'B' (RDSB) 1,795.00p 1.93%
HSBC Holdings (HSBA) 434.20p 1.92%
FTSE 100 - Fallers
Pearson (PSON) 620.40p -14.90%
Severn Trent (SVT) 2,601.00p -2.65%
Smurfit Kappa Group (CDI) (SKG) 3,759.00p -2.52%
Informa (INF) 549.40p -2.31%
Smith (DS) (SMDS) 378.70p -2.27%
Burberry Group (BRBY) 1,872.50p -1.89%
United Utilities Group (UU.) 981.00p -1.80%
Hargreaves Lansdown (HL.) 1,471.00p -1.70%
Smiths Group (SMIN) 1,417.00p -1.56%
Rio Tinto (RIO) 5,038.00p -1.43%
FTSE 250 - Risers
Mediclinic International (MDC) 346.40p 12.25%
Drax Group (DRX) 532.00p 6.91%
Virgin Money UK (VMUK) 204.80p 3.96%
Moneysupermarket.com Group (MONY) 206.80p 3.92%
QinetiQ Group (QQ.) 297.20p 3.85%
IWG (IWG) 300.20p 3.48%
Capita (CPI) 49.29p 3.33%
Investec (INVP) 332.60p 3.32%
Jupiter Fund Management (JUP) 247.40p 3.26%
Energean (ENOG) 907.00p 3.19%
FTSE 250 - Fallers
Darktrace (DARK) 879.00p -8.15%
RHI Magnesita N.V. (DI) (RHIM) 2,942.00p -3.41%
Babcock International Group (BAB) 341.50p -3.23%
Centamin (DI) (CEY) 99.42p -2.72%
Cineworld Group (CINE) 66.70p -2.54%
Centrica (CNA) 58.48p -2.04%
Pennon Group (PNN) 1,133.00p -2.00%
Homeserve (HSV) 820.00p -1.74%
Dr. Martens (DOCS) 364.20p -1.57%
Volution Group (FAN) 494.50p -1.49%