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(Alliance News) - The FTSE 100 outperformed on Thursday, aided by a Brexit-stricken pound and the price of Brent oil topping USD50 a barrel for the first time since early March.

The FTSE 100 index closed up 35.47 points, or 0.5%, at 6,599.76. The FTSE 250 ended down 127.79 points, or 0.6%, at 19,756.10, and the AIM All-Share closed down 8.07 points, or 0.8%, at 1,069.78.

The Cboe UK 100 ended up 0.6% at 658.81, the Cboe UK 250 closed down 1.0% at 17,075.61, and the Cboe Small Companies ended down 1.3% at 11,344.58.

In European equities on Thursday, the CAC 40 in Paris ended up 0.1%, while the DAX 30 in Frankfurt ended down 0.3%.

Oil majors ended amongst the top performers in the FTSE 100 on Thursday, bolstered as the price of a barrel of Brent broke through the USD50 barrier for the first time in nine months.

Brent oil was quoted at USD50.83 a barrel at the London equities close Thursday from USD48.72 late Wednesday. Brent started the year trading around the USD66 level, rising to just over USD70 in early January before getting thumped by the Covid-19 pandemic.

However, the outlook has turned brighter in recent weeks amid vaccine progress, with the UK this week embarking on a mass vaccination programme following its approval of Pfizer's Covid-19 jab.

"If [Brent] can hold on above this level, it could be a major psychological breakout after an incredible run for crude since the start of November. The next major resistance for Brent is USD53.50 so we could even see it establish a new range," said Craig Erlam at Oanda.

Oil major BP ended the session at the top of the FTSE 100, up 4.5%, while Royal Dutch Shell 'A' and 'B' shares rallied 3.7% and 3.8% respectively.

As well as oil, a weaker pound was helping the internationally-exposed FTSE 100 index climb on Thursday.

Sterling was dented after a three-hour dinner between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen left the two sides "far apart". The two agreed that a decision on the future of the negotiations will be taken by the end of the weekend.

With the prospect of a no-deal outcome, Brussels has stepped up its preparations and held out the prospect of emergency agreements aimed at keeping planes flying and lorries crossing to the continent.

UK chief negotiator David Frost and his EU counterpart, Michel Barnier, will reconvene in Brussels on Thursday to begin their final push to salvage what has been almost a year of wrangling over a trade deal.

The pound was quoted at USD1.3285 at the London equities close Thursday, falling from USD1.3382 at the close on Wednesday.

The euro, meanwhile, rose after the European Central Bank expanded its asset buying programme and kept interest rates unchanged.

The Frankfurt-based central bank kept its interest rates on main refinancing operations, the marginal lending facility, and the deposit facility all unchanged at 0.00%, 0.25% and negative 0.50%, respectively.

The ECB decided to increase the envelope of the pandemic emergency purchase programme by EUR500 billion to a total of EUR1.85 trillion. The bank also extended the horizon for net purchases under the PEPP to at least the end of March 2022.

Connor Campbell at Spreadex commented: "The central bank also failed to take issue with the euro's recent gains, something that in and of itself spurred the currency on even further."

The euro stood at USD1.2119 at the European equities close Thursday, up against USD1.2080 at the same time on Wednesday.

Safe havens, the Japanese yen and gold, fell back on Thursday. Against the yen, the dollar was trading at JPY104.38, compared to JPY104.27 late Wednesday, and gold was quoted at USD1,836.95 an ounce at the London equities close against USD1,849.10.

Stocks in New York were mixed at the London equities close, with the DJIA down 0.1%, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.7%.

Turning back to London, Ocado shares closed down 7.2% despite reporting "exceptional" demand in the fourth quarter of its financial year for its Ocado Retail joint venture.

Ocado Retail is an equal joint venture between Hatfield, Hertfordshire-based Ocado Group and London-based food, clothing and homewares retailer Marks & Spencer Group PLC.

In the 13 weeks to November 29, Ocado Retail reported revenue of GBP579.6 million, up 35% from the prior year's GBP429.7 million. Average orders per week increased 3.0% to 360,000 from 350,000.

For the financial year that ended November 30, Ocado Group now expects to report earnings before interest, tax, depreciation and amortisation of over GBP70 million, up from GBP43.3 million a year prior. It said growth in financial 2021 will be determined by the extent to which Ocado Retail returns to a "normalised" trading week and the timing of additional capacity going live.

"Seeing as a Covid-19 vaccine is now be administered in the UK, there is chatter that normal life will resume at some point in 2021, so that might take some of the shine off Ocado," said David Madden, market analyst at CMC Markets.

DS Smith closed up 3.8%. The packaging firm reported a steep profit decline in the first half of its financial year, though resumed dividends given the resilience of its performance in a challenging environment.

For the six months ended October 31, the FTSE 100 firm's pretax profit plunged 54% to GBP97 million from GBP213 million with revenue down 9.4% at GBP2.89 billion from GBP3.19 billion a year before.

London-headquartered DS Smith said that, over the half-year period, there was an initial further reduction in paper prices as European corrugated demand fell during lockdowns and a temporary but sharp peak in old corrugated cases prices. This combined with other Covid-19 costs to hurt margins in the first quarter.

However, old corrugated cases prices mostly normalised toward the end of the second quarter and European paper prices are higher amid strong domestic demand. DS resumed dividend payments, declaring an interim payout of 4.0 pence after nothing the year before.

Frasers Group rallied 13% in the FTSE 250 after reporting interim profit growth despite the retailer seeing revenue fall as it was forced to temporarily close its stores throughout the period.

"Our results in this half year have been pleasing, particularly given the fact our stores in the UK were virtually all closed until mid-June. In an industry sector blighted by the decline of the High Street we are really proud of our performance and our people who helped us get there," Chair David Daly said.

For the 26 weeks to October 25, Frasers - which owns Sports Direct and House of Fraser - recorded pretax profit of GBP106.1 million, up 18% from GBP90.2 million the year before. Group revenue slipped 7.4% year on year to GBP1.89 billion from GBP2.04 billion. Frasers blamed the drop in revenue on the pandemic forcing national lockdowns across the globe, resulting in the temporary closure of its stores.

Amid the store closures, Daly said the firm's online business has remained "resilient".

Inchcape rose 5.7% after the automotive retailer said it is now expecting its annual profit to be materially ahead of market consensus and it will consider resuming dividend payments after a better than expected November performance.

Given that the company has performed better than expected in November, and the limited restrictions in place at present, it expects to post a pretax profit before exceptional items "materially ahead of the published market consensus" of GBP108 million.

Friday's UK corporate calendar has a trading statement from jet engine maker Rolls-Royce and housebuilder Bellway.

In the economic calendar for Friday, there is German inflation at 0700 GMT and US producer prices at 1330 GMT.

By Lucy Heming; lucyheming@alliancenews.com

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