London close: Stocks positive ahead of Federal Reserve decision
London stocks closed in the green on Wednesday, as concerns about embattled Chinese property giant Evergrande eased, and investors turned their attention to the latest policy announcement from the US Federal Reserve due later in the global day.
The FTSE 100 ended the session up 1.47% at 7,083.37, and the FTSE 250 was 0.73% firmer at 23,784.54.
Sterling was in a mixed state, last trading 0.07% stronger on the dollar at $1.3669, while it weakened 0.04% against the euro to change hands at €1.1644.
“Dip buyers have thrown caution to the wind it seems this afternoon, discarding any pre-Fed nerves and plunging back into stocks as the Evergrande situation seems to diminish in importance just as quickly as it appeared,” said IG chief market analyst Chris Beauchamp.
“The urge to buy the dip is alive and well it seems, and equities are back on an upward footing as risk appetite flows back into financial markets.
“This rebound is not confined to stocks; oil prices, silver and non-dollar currencies are on the up, as the VIX takes an early bath, falling sharply throughout the session.”
Beauchamp said it was certainly a broad-based move to the upside in London, providing “plenty of foundation” for further gains beyond 7,100 as the FTSE 100 enjoyed a triple-digit up day.
“Other European markets are on the up too, but after their spectacular day yesterday a slightly more muted tone prevails.
“A move back above 34,000 for the Dow has reassured anxious investors too, as the losses of earlier in the week are slowly clawed back.”
On the economic front stateside, existing home sales fell in August, with supply remaining constrained and prices accelerating further.
According to the National Association of Realtors, existing home sales dropped 2.0% to a seasonally adjusted annual rate of 5.88m units last month as sales fell in all four regions.
Home resales, which account for the majority of US home sales, were down 1.5% year-on-year, while the average cost of an existing house increased 14.9% year-on-year to $356,700.
Back in Europe, the Ifo Institute slashed its economic growth forecasts for Germany after a hoped-for summer recovery failed to emerge.
Publishing its autumn economic forecast, the institute cut its GDP growth expectations for 2021 by 0.8 percentage points to 2.5%, and raised them by the same amount for 2022, to 5.1%.
“The strong post-pandemic recovery that was originally expected in the summer has yet to materialise,” said Timo Wollmershauser, head of forecasts at Ifo.
“Currently, industrial output is shrinking due to supply bottlenecks for key intermediate products.
“At the same time, service providers are seeing a strong recovery from the coronavirus crisis - the economy is divided.”
In equity markets back in London, Ladbrokes owner Entain racked up gains of 5.13% after saying that DraftKings had made a £16.4bn offer for the sports betting company.
Peer 888 Holdings rose 6.7%, with traders pointing to positive read-across from the Entain news.
Flutter Entertainment advanced 4.06% after the Paddy Power Betfair owner said it had settled in full a legal dispute with the Commonwealth of Kentucky.
Covid-19 vaccine producer Oxford Biomedica pushed 10.55% higher after saying it swung to a profit in the half year on the back of a surge in revenues.
In terms of sectors, miners put in a strong performance as copper prices rallied, with Anglo American up 3.56%, Antofagasta ahead 6.88%, BHP rising 2.15%, Glencore 3.91% firmer, and Rio Tinto 2.85% higher.
On the downside, Imperial Leather maker PZ Cussons slumped 4.56% after it posted higher full-year profits as sales of hygiene products soared, but said first-quarter sales had fallen against tough comparators during the height of the Covid pandemic.
B&Q owner Kingfisher was on the back foot for the second day in a row, losing 1.4% after it said on Tuesday that third-quarter like-for-like sales to 18 September were down 0.6% year-on-year.
National Express was also in the red, losing 3.17% after gaining a day earlier on news that it and fellow transport operator Stagecoach were in talks about a possible merger.
Stagecoach itself was 5.09% weaker by the close on Wednesday.
FTSE 100 - Risers
Antofagasta (ANTO) 1,423.50p 7.11%
Entain (ENT) 2,391.00p 5.75%
Standard Chartered (STAN) 429.90p 4.85%
HSBC Holdings (HSBA) 375.45p 4.36%
Prudential (PRU) 1,421.00p 4.22%
Glencore (GLEN) 324.20p 3.91%
Flutter Entertainment (CDI) (FLTR) 15,855.00p 3.83%
Anglo American (AAL) 2,562.00p 3.56%
Barclays (BARC) 181.22p 3.54%
Lloyds Banking Group (LLOY) 43.97p 3.53%
FTSE 100 - Fallers
Kingfisher (KGF) 345.00p -1.40%
National Grid (NG.) 944.80p -1.35%
Severn Trent (SVT) 2,780.00p -1.31%
AstraZeneca (AZN) 8,615.00p -1.09%
United Utilities Group (UU.) 1,033.50p -1.01%
SSE (SSE) 1,651.50p -0.57%
Hikma Pharmaceuticals (HIK) 2,380.00p -0.46%
Reckitt Benckiser Group (RKT) 5,892.00p -0.46%
Auto Trader Group (AUTO) 613.80p -0.39%
London Stock Exchange Group (LSEG) 7,966.00p -0.10%
FTSE 250 - Risers
Oxford Biomedica (OXB) 1,634.00p 10.55%
888 Holdings (888) 479.00p 6.92%
Wood Group (John) (WG.) 219.40p 6.76%
Harbour Energy (HBR) 381.80p 5.41%
Investec (INVP) 292.30p 5.14%
Weir Group (WEIR) 1,740.50p 4.72%
Energean (ENOG) 847.00p 4.31%
Telecom Plus (TEP) 1,100.00p 4.17%
Cairn Energy (CNE) 181.60p 4.01%
Hammerson (HMSO) 33.70p 3.53%
FTSE 250 - Fallers
JTC (JTC) 746.00p -6.75%
PZ Cussons (PZC) 220.00p -4.56%
Oxford Instruments (OXIG) 2,350.00p -3.69%
Restaurant Group (RTN) 109.00p -3.37%
Bridgepoint Group (Reg S) (BPT) 550.00p -3.34%
National Express Group (NEX) 232.40p -3.17%
Trustpilot Group (TRST) 357.00p -2.67%
Drax Group (DRX) 491.40p -2.31%
SSP Group (SSPG) 272.20p -2.26%
XP Power Ltd. (DI) (XPP) 5,300.00p -1.85%