London close: Stocks finish higher on renewed trade optimism
London stocks remained positive by the close on Thursday, as trade deal optimism overshadowed a raft of disappointing corporate updates.
The FTSE 100 ended the day up 0.84% at 7,351.08, and the FTSE 250 added 0.22% to 19,818.61.
In currencies, sterling was 0.07% weaker against the dollar at $1.2344, and down 0.01% on the euro at €1.1285.
“A testy session for MPs yesterday sets the tone for the run in to the Brexit deadline,” said Neil Wilson, chief market analyst at Markets.com, in an earlier statement.
“No-deal remains on the table.
“GBPUSD has come under renewed pressure as hopes that the Supreme Court ruling would have any material impact on the government’s position were dashed by some pretty bullish stuff from both Attorney General Cox and the PM.”
Looking across the Atlantic, optimism over Sino-US trade relations helped to underpin the mood after US President Donald Trump said on Wednesday that a trade deal with China could happen "sooner than you think" and that China was making big agricultural purchases from the US.
Trump told reporters in New York that China wants "to make a deal very badly".
Investors also welcomed the news of a limited trade agreement between the US and Japan that will eliminate tariffs on certain products.
Neil Wilson pointed to the fact that high level trade talks between the US and China are due to resume in a couple of weeks.
"Trump knows how to keep the market hooked on his comments and do just enough to prevent heavy selling taking hold.
“However, as we consistently say, the market is moving on fumes and rumours and appears set for disappointment.”
Wilson also said fears that US President Donald Trump will be impeached have receded.
"The release of the transcript of the call between Mr Trump and his Ukrainian opposite number didn’t suggest he put pressure on Volodymyr Zelensky by threatening to withhold military aid.
“As we said yesterday, the chances of the impeachment going all the way are very low.
“The Republican Senate won’t touch Trump even if the House calls for his head.”
Corporate news was mostly grim, but broker notes lent a hand, with building materials group Ferguson rising 0.37% as Deutsche Bank reinstated coverage of the stock at 'buy’.
Utilities firms were in the green, with Centrica up 2.25%, United Utilities adding 2.86% and Pennon ahead 1.98% after they were upgraded to 'buy' at Citi.
Pub group Mitchells & Butlers fizzed 0.4% higher as it reported a rise in full-year sales and backed its guidance for operating profit margin guidance.
On the downside, education publisher Pearson settled 14.03% in the red, as it warned that full-year profit will be at the lower end of its guidance range due to weak trading in the US.
Shares of Imperial Brands slumped 12.92% as it cut its full-year revenue guidance amid a challenging vaping and e-cigarette market in the US.
The tobacco giant also said it expects earnings per share to be broadly flat at constant currencies.
Shares of rival British American Tobacco recovered after a negative start to the day, however, ending the session 0.34% above the waterline.
“A string of deaths in the US linked to vaping products has hit demand for Imperial’s myblu,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.
“Vaping [is] only a small contributor to revenues and profits at the moment, which is why full year earnings per share look set to come in flat year-on-year, but hopes had been high that the vaping segment would drive growth as traditional tobacco declines.”
British Airways and Iberia parent IAG descended 3.98% after it said it expects full-year operating profit before exceptional items to be €215m lower, reflecting flight cancellations caused by the BA pilots' strike in September.
It also said that further action would increase the fall.
Market Movers
FTSE 100 (UKX) 7,351.08 0.84%
FTSE 250 (MCX) 19,818.61 0.22%
techMARK (TASX) 3,876.71 0.86%
FTSE 100 - Risers
Aveva Group (AVV) 3,734.00p 4.77%
Next (NXT) 6,028.00p 4.00%
JD Sports Fashion (JD.) 724.00p 3.22%
Severn Trent (SVT) 2,135.00p 3.09%
3i Group (III) 1,143.80p 2.91%
United Utilities Group (UU.) 813.40p 2.86%
National Grid (NG.) 887.00p 2.75%
Reckitt Benckiser Group (RB.) 6,577.00p 2.43%
Sage Group (SGE) 684.00p 2.40%
Compass Group (CPG) 2,070.00p 2.37%
FTSE 100 - Fallers
Pearson (PSON) 740.00p -14.03%
Imperial Brands (IMB) 1,798.20p -12.94%
Carnival (CCL) 3,389.00p -7.20%
International Consolidated Airlines Group SA (CDI) (IAG) 461.00p -3.98%
Evraz (EVR) 460.00p -1.18%
Morrison (Wm) Supermarkets (MRW) 199.90p -1.04%
Fresnillo (FRES) 730.20p -0.95%
NMC Health (NMC) 2,700.00p -0.70%
Barratt Developments (BDEV) 631.20p -0.57%
Ocado Group (OCDO) 1,292.50p -0.50%
FTSE 250 - Risers
Aston Martin Lagonda Global Holdings (AML) 582.20p 5.70%
AJ Bell (AJB) 416.00p 3.74%
Ultra Electronics Holdings (ULE) 2,078.00p 3.69%
Vivo Energy (VVO) 123.40p 3.52%
PureTech Health (PRTC) 237.00p 3.49%
TalkTalk Telecom Group (TALK) 103.80p 2.87%
Derwent London (DLN) 3,330.00p 2.84%
Pets at Home Group (PETS) 213.00p 2.70%
Safestore Holdings (SAFE) 661.50p 2.64%
Avast (AVST) 382.20p 2.63%
FTSE 250 - Fallers
SSP Group (SSPG) 608.00p -8.98%
Sirius Minerals (SXX) 3.71p -8.97%
Card Factory (CARD) 167.00p -6.29%
IG Group Holdings (IGG) 611.80p -4.26%
TBC Bank Group (TBCG) 1,234.00p -4.04%
Network International Holdings (NETW) 531.00p -3.45%
Cairn Energy (CNE) 187.50p -3.25%
Wood Group (John) (WG.) 386.20p -2.47%
Premier Oil (PMO) 77.36p -2.22%
BBA Aviation (BBA) 310.00p -2.08%