Findel Share News (FDL)

LONDON (Alliance News) - UK equities ended the week which followed the Brexit vote substantially higher Friday, boosted by Bank of England Governor Mark Carney saying he expects the central bank to ease monetary policy this summer.

The UK's surprise vote to leave the European Union last week sent shockwaves through all asset classes, with stocks plunging in the immediate aftermath and then again on Monday. Following those declines, however, equities rebounded over the remainder of the week. The FTSE 100 and FTSE 250 have now chalked up four consecutive trading sessions of gains as investors pounced on cheap stocks.

London's blue-chip index has more than regained all of its referendum-induced losses, with the fall in sterling likely to support constituents' earnings, most of which is earned overseas. The mid-cap index remained below pre-referendum levels as FTSE 250 constituents have more of a domestic focus than their larger, more multi-national counterparts.

On Friday, the FTSE 100 closed up 1.1%, or 73.50 points, at 6,577.83, meaning it ended up 7.2% for the week as a whole. The blue-chip index closed at its highest level in 2016 so far.

The FTSE 250 index ended up 1.2%, or 194.42 points, at 16,465.49. That leaves the mid-cap index up 2.4% for the week. The AIM All-Share rose 0.8%, or 5.60 points, at 713.48. The AIM All-Share closed up 1.4% for the week.

UK stocks were boosted by comments from BoE Governor Carney late Thursday, which hinted at looser UK monetary policy post the Brexit vote.

Carney said the referendum outcome had created uncertainty and deteriorated the economic outlook for the UK, which may require "some monetary policy easing" over the summer.

The bank's rate-setting monetary policy committee will make an initial assessment for its next policy decision on July 14 and will complete a full assessment with new forecasts in the August Inflation Report, due on August 4.

At the London equities close on Friday, sterling traded at USD1.3268, lower than the USD1.3294 seen at the London stock market close on Thursday. The euro was trading at USD1.1145 at the London close, versus USD1.1032 at the same time on Thursday.

In mainland Europe, the CAC 40 in Paris closed up 0.9%, or 4.1% for the week, and the DAX 30 in Frankfurt ended up 1.0%, 2.3% for the week.

In New York at the London close, the DJIA was up 0.2%, the S&P 500 up 0.3% and the Nasdaq Composite up 0.5%.

Manufacturing activity in the US registered growth for the fourth consecutive month in June, according to a report by the Institute for Supply Management.

The ISM said its purchasing managers' index jumped to 53.2 in June from 51.3 in May, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 51.5. The ISM's manufacturing index is now at its highest level since reaching 53.3 in February of 2015.

"Today's report is clearly a positive development and suggests that the long-suffering manufacturing sector may finally be starting to recover. However, we would caution against expecting a major rebound any time soon," said Andrew Hunter, assistant economist at Capital Economics.

"Admittedly, the dollar remains well below its first-quarter peak, despite the small appreciation in the aftermath of the UK Brexit vote. The drag on exporters from its prior surge should therefore be starting to fade. But the latest international PMIs provide little evidence that global demand is set for a strong rebound," Hunter added.

Precious metals miner Fresnillo ended as the best performer in the FTSE 100, up 7.1%, tracking the price of gold and silver. At the London stock market close gold traded at USD1,337.16 an ounce, compared to USD1,318.96 at the close Thursday.

Silver outperformed, hitting its highest level since September 2014 earlier in the day at USD19.47 an ounce.

Brent oil dipped just below the USD50 a barrel line and at the London close traded at USD49.74 a barrel. At the close on Thursday Brent was quoted at USD50.32.

In the FTSE 250, Genus shares jumped 5.4% after Liberum upgraded the animal genetics company to Buy from Hold, arguing that while the UK's vote to leave the EU has hit the company's shares, Genus's business should be "fairly immune" to the challenges.

Liberum said only 10% of Genus sales come from the UK and a weaker pound should drive at least at 7.0% translation benefit to profit. In addition, current trading at the company looks solid, with robust hog markets in the US and China offsetting weaker conditions in Latin America and dairy markets.

Berenberg upgraded Dignity to Buy from Hold as the broker believes the "fundamental story" of the funeral services company remains unchanged despite the Brexit vote.

"Despite last week's referendum heralding a period of uncertainty in the UK economy, we believe the fundamental story at Dignity remains unchanged," said Berenberg analyst Sam England. "With strong pricing power, steady, non-cyclical demand and high margins, we believe the business offers investors steadily growing profits with scope for cash returns."

The analyst said that while Dignity is "100% exposed to the UK, its end-markets are not cyclical and it imports very little". Dignity closed up 6.0%.

Home shopping and education supplies business Findel surged higher after disclosing it was holding early stage talks with Sports Direct International, the sports clothing and equipment retailer, on a possible commercial supply agreement. The proposals would see Sports Direct founder Mike Ashley become Findel's new chairman and gained the support of Schroders and Toscafund Asset Management, two major Findel shareholders.

Findel then disclosed Sports Direct had increased its stake in the company to just shy of 30%, from 17% previously. Findel closed up 14%, while Sports Direct closed down 2.7%.

Animal pharmaceutical products company Eco Animal Health Group closed up 13% after it said its pretax profit and revenue both grew in the year to the end of March, prompting it to hike its dividend by a fifth.

Eco Animal Health said pretax profit for the year to March 31 grew 51% to GBP7.7 million from GBP5.1 million for the comparable period a year earlier, helped by a 21% rise in sales to GBP47.1 million from GBP17.5 million.

The company said it will pay a second interim dividend of 3.80 pence, up from 3.0p the year before, taking its total payout up to 5.7p from 4.75p, a 20% rise.

On Monday, Wall Street will be on holiday as the US celebrates Independence Day. The economic calendar is quite thin, with only UK construction PMI at 0930 BST, at the same time as the Sentix investor confidence survey for the eurozone. Eurozone producer price index is later at 1000 BST.

The highlight in the UK corporate calendar is a trading statement from FTSE 250 construction and support services company Kier Group. Educational IT and resources company RM publishes interim results.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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