London close: Stocks hit fresh record high
The top flight index notched up a fresh record high on Thursday as investors digested the passing of the US tax reform bill and the latest readings on UK consumer confidence and public finances, although trading volumes were much thinner than usual in the run-up to Christmas.
The FTSE 100 jumped 1.05% or 78.76 points to 7,603.98. Meanwhile, the pound was flat versus the euro at 1.1263 and off 0.1% against the dollar at 1.3369
David Madden, Market Analyst at CMC Markets UK, said: "The FTSE 100 is the standout performer in Europe as it reached a fresh all-time high. The market has cleared the 7600 mark, for the first time ever. Since consumer goods like Reckitt Benckiser, Diageo and Tesco are some of the biggest risers on the day, the Santa rally is certainly underway.
"The FTSE 100’s relatively high proportion of commodity stocks is also giving it a boost as BP, Royal Dutch Shell, BHP Billiton and Rio Tinto are all higher on the day."
Overnight, the US House of Representatives and the Senate passed a $1.5trn tax reform bill, sending it to President Trump for his signature.
The bill, which Trump hailed as a “historic victory for the American people", will see corporate tax cut to 21% from 35%, while income tax rates will be reduced across all seven individual tax brackets. It will give individuals and married couples who fall into the highest income bracket of $500,000 and over the largest tax cut, to 37% from 39.6%.
"I promised the American people a big, beautiful tax cut for Christmas. With final passage of this legislation, that is exactly what they are getting,” Trump said.
Closer to home, a survey released on UK consumer confidence fell to a four-year low in December.
GfK's consumer confidence index declined to -13 this month from -12 in November, missing expectations for it to remain unchanged and surpassing the post-Brexit lows to fall to its lowest level since December 2013.
Investors were also digesting news that UK public finances improved slightly in November as the government reaped the rewards of rising income tax revenue.
Public sector net borrowing, excluding state-owned banks, was £8.7bn in November, a 1.9% decline from a year earlier, the Office for National Statistics said. The figure was slightly below the average economist's forecast of £8.9bn.
November's result took borrowing since the start of the financial year in April to £48.1bn, down 6.1% from a year earlier and the lowest figure for this point in the year since 2007. It kept the chancellor, Philip Hammond, on track to meet a borrowing target revised down at November's Budget.
Revenue from income and capital gains tax rose 6.2% in November from a year earlier and 3.4% for the year to date. Sales tax revenues were 4.1% higher so far this year, tracking a rise in inflation. Corporation tax revenues were flat.
In corporate news, infrastructure group Balfour Beatty rallied as it announced the sale of a 12.5% stake in Connect Plus, the company which operates the M25 orbital motorway, for £103m, and lifted its 2017 profit expectations.
Holiday Inn owner InterContinental Hotels rose after it commented on the impact of US President Donald Trump's tax reform bill. Based on initial estimates, the Republican tax reforms are expected to reduce IHG's group effective tax rate "by mid to high single digit percentage points" from 1 January 2018. For 2017, IHG's group effective tax rate is still expected to be in the low 30s.
Kaz Minerals was on the front foot as it said that the expansion of its Aktogay copper mine has been approved.
On the downside, housebuilders were weaker, with Berkeley, Persimmon, Barratt Developments and Taylor Wimpey all down after the Department for Communities and Local Government's proposal to set all ground rents to zero. Retirement housebuilder McCarthy & Stone was sharply lower as it protested about its being lumped in with the rest of the residential sector.
Greencoat Renewables fell after agreeing to buy the Dromadda More wind farm from Impax Asset Management for €88.4m funded by a €250m credit facility, while outsourcer Capita retreated despite saying it had won an internet network contract with Transport for London.
Home furnishings retailer Dunelm was in the red too after saying it has appointed Nick Wilkinson - a former chief executive of Evans Cycles - as it new CEO.
Market Movers
FTSE 100 (UKX) 7,603.98 1.05%
FTSE 250 (MCX) 20,422.73 0.36%
techMARK (TASX) 3,517.54 0.72%
FTSE 100 - Risers
Mediclinic International (MDC) 630.00p 7.33%
NMC Health (NMC) 2,817.00p 2.89%
Next (NXT) 4,411.50p 2.84%
Standard Life Aberdeen (SLA) 428.70p 2.54%
G4S (GFS) 264.30p 2.48%
BHP Billiton (BLT) 1,469.00p 2.41%
GKN (GKN) 311.50p 2.33%
BP (BP.) 519.50p 2.12%
InterContinental Hotels Group (IHG) 4,703.00p 2.11%
Reckitt Benckiser Group (RB.) 6,720.00p 2.07%
FTSE 100 - Fallers
Carnival (CCL) 4,878.00p -1.73%
United Utilities Group (UU.) 815.00p -1.33%
Berkeley Group Holdings (The) (BKG) 4,170.00p -0.95%
WPP (WPP) 1,342.00p -0.81%
Persimmon (PSN) 2,701.00p -0.77%
Rentokil Initial (RTO) 310.90p -0.73%
Centrica (CNA) 137.70p -0.43%
DCC (DCC) 7,350.00p -0.41%
National Grid (NG.) 867.10p -0.36%
Taylor Wimpey (TW.) 205.40p -0.29%
FTSE 250 - Risers
Sirius Minerals (SXX) 23.64p 6.91%
Tullow Oil (TLW) 202.10p 4.77%
Inmarsat (ISAT) 485.40p 3.63%
TI Fluid Systems (TIFS) 248.90p 3.28%
Beazley (BEZ) 505.00p 3.25%
IG Group Holdings (IGG) 703.50p 3.15%
Hansteen Holdings (HSTN) 141.60p 2.68%
Kaz Minerals (KAZ) 820.00p 2.50%
UDG Healthcare Public Limited Company (UDG) 848.00p 2.48%
Card Factory (CARD) 287.40p 2.42%
FTSE 250 - Fallers
McCarthy & Stone (MCS) 153.60p -9.49%
Capita (CPI) 392.90p -3.20%
Barr (A.G.) (BAG) 625.00p -3.18%
Fidessa Group (FDSA) 2,464.00p -2.99%
Hikma Pharmaceuticals (HIK) 1,098.00p -2.40%
Greencore Group (GNC) 222.50p -2.37%
Crest Nicholson Holdings (CRST) 516.50p -2.36%
RHI Magnesita N.V. (DI) (RHIM) 3,980.00p -2.21%
Countryside Properties (CSP) 343.80p -2.13%
Vectura Group (VEC) 103.20p -2.09%