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(Alliance News) - Stocks in London ended higher on Thursday with miners boosting the FTSE 100, while the pound rose after a tumultuous few days in UK politics culminated in the resignation of Prime Minister Boris Johnson.
The FTSE 100 index closed up 81.31 points, or 1.1%, at 7,189.08. The FTSE 250 index closed up 281.05 points, or 1.5%, at 18,875.53. The AIM All-Share index closed up 5.88 points, or 0.7%, at 880.47.
The Cboe UK 100 index ended up 1.4% to 717.84. The Cboe 250 closed up 1.7% at 16,400.38, while the Cboe Small Companies finished 0.4% higher at 13,206.90.
In mainland Europe, the CAC 40 stock index in Paris closed up 1.6%, while the DAX 40 in Frankfurt rose 2.0%.
"It's been another solid day for European markets as they look to reverse the losses of last week, rising for the second day in succession. The gains of the past two days have come despite rising concerns over looming recession," CMC Markets analyst Michael Hewson said.
In London, mining stocks ended among the best blue-chip performers, boosting the FTSE 100. Anglo American rose 7.3%, Glencore added 6.0% and Rio Tinto climbed 3.7%.
"A strong rebound in copper prices from 18-month lows in the last 24 hours, is helping the basic resource sector, with strong gains for the likes of Antofagasta, Glencore and Anglo American, after reports out of China suggested that the Ministry of Finance was considering allowing local governments to bring forward about USD220 billion of infrastructure spending from 2023, into the second part of this year," Hewson added.
Shell closed up 3.3% after the oil major said it expects to book an impairment reversal of up to USD4.5 billion on an improving commodity price outlook. Shell also forecasts a boost between USD800 million and USD1.20 billion to its Products division due to an improving indicative refining margin.
At the other end of the large-caps, Persimmon was the worst performers, down 5.0%, after the housebuilder said half-year revenue and legal completions were lower.
Revenue was down 8.2% to GBP1.69 billion in the first half of 2022 from GBP1.84 billion a year earlier. Completions have fallen to 6,652 from 7,406. Completions were below expectations due to "further delays in the planning system and material and labour shortages".
Entain closed down 3.8% after the gambling firm lowered annual guidance, while Paddy Power operator Flutter lost 4.1% in a negative read-across.
For 2022, Entain now expects flat online net gaming revenue, excluding impacts from the upcoming UK Gambling Act Review. It had previously forecast mid-to-high single digit growth.
British American Tobacco shed 3.1% after the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.
In the FTSE 250, Currys ended the best performer, up 8.8%, after the electrical goods retailer said profit nearly quadrupled in its most recent financial year.
Currys reported that revenue was down 2% to GBP10.12 billion in the year to April 30, from GBP10.33 billion last year. It added that store sales increased by 24% as the company benefited from looser pandemic restrictions, although this was offset by online sales declining 29%.
Pretax profit almost quadrupled to GBP126 million, compared to GBP33 million in its financial year 2021.
Currys also said that it will pay a full-year dividend of 3.15p per share, up 5% on the year before.
At the other end of the midcaps, Baltic Classifieds Group ended the worst performer, down 8.8%, after the classified ad portal guided to a slower pace of revenue growth in the year ahead.
In the financial year that ended April 30, pretax profit rose 38% to EUR2.45 billion from EUR1.78 billion a year ago. Annual revenue topped initial public offering guidance, rising 21% to EUR50.96 billion from EUR42.27 billion the year prior.
The company is targeting 15% revenue growth in 2023 and expects to maintain its adjusted Ebitda margin despite rising costs and high inflation.
Sterling moved off two-year lows against the greenback after Johnson announced his resignation.
The pound was quoted at USD1.2002 at the London equities close, up from USD1.1917 at the close Wednesday.
Johnson on Thursday left little doubt that he believed his Cabinet colleagues and Tory critics made a big error in pushing him out of No 10. He blamed the "herd instinct" at Westminster and suggested that removing him from office was an affront to the millions of voters who gave him the landslide election victory in 2019.
Still, as he addressed the nation, Johnson said he was "immensely proud of the achievements of this Government", from getting Brexit done to getting the UK through the pandemic, and leading the West in standing up to Vladimir Putin's aggression in Ukraine.
He added: "I want you to know how sad I am to be giving up the best job in the world, but them's the breaks."
Johnson also said "the process of choosing a new leader should begin now", and that he will continue to serve until his successor is in place.
The embattled PM had been clinging on to power despite a wave of more than 50 government resignations, expressing defiance, sparked by high-profile resignations of Rishi Sunak and Sajid Javid as chancellor and health secretary respectively late Tuesday.
But Thursday's departure of education minister Michelle Donelan and a plea to quit from finance minister Nadhim Zahawi, only in their jobs for two days, appeared to tip the balance along with warnings of a new no-confidence vote by Tory MPs.
Johnson triumphed in 2019 with a vow to "get Brexit done" following Britain's shock referendum decision three years prior. But for many, the populist, convention-defying leader had outstayed his welcome.
The Conservative infighting erupted at a time when millions of Britons are battling the worst slump in living standards since the 1950s, fuelling by rocketing energy prices on back of the war in Ukraine.
Before the economic crisis, Johnson's popularity had already slumped over a series of lockdown-breaking parties in Downing Street, which saw him become the first prime minister to receive a police fine.
Johnson, late on Wednesday, had sacked minister Michael Gove, with a Downing Street source describing his former Brexit right-hand-man as a "snake" in the media. The move came after Johnson on Tuesday apologised for his February appointment of senior Conservative MP Chris Pincher as deputy chief whip.
Pincher was forced to step down following accusations he drunkenly groped two men.
Days of shifting explanations followed the resignation, before Downing Street finally conceded that Johnson had known about Pincher's behaviour as far back as 2019.
Tory critics said the Pincher affair had tipped many over the edge, angry at having to defend what they saw as more lies by Johnson over his appointment.
Alex Kuptsikevich, FxPro senior market analyst, commented: "Markets have taken the latest reports positively in hopes as it will reduce the degree of uncertainty and hope that the new cabinet will focus on dealing with economic hardship rather than the prime minister... It is unlikely that the change of the UK leader will fundamentally change the economic outlook, as so much now depends on external factors and the Bank of England's policies.
"Nevertheless, a 'relief rally' in British assets is likely. This could be especially true for the pound. The GBPUSD daily charts show an oversold and bullish divergence with the Relative Strength Index. Such a disposition suggests support among buyers closely monitoring the technical picture, of which quite a few are on the currency market."
The euro stood at USD1.0172 at the European equities close, down from USD1.0192. Against the yen, the dollar was trading at JPY135.91, higher against JPY135.56.
Stocks in New York were higher at the London equities close minutes from the latest Federal Reserve meeting showed that US central bankers are determined to fight inflation despite recession worries.
The DJIA was up 0.9%, the S&P 500 index up 1.0% and the Nasdaq Composite up 1.5%.
Brent oil was quoted at USD105.66 a barrel at the equities close, rebounding from USD99.67 late Wednesday.
Gold stood at USD1,742.44 an ounce at the London equities close, firm against USD1,738.77 late Wednesday.
The economic events calendar on Friday has the closely-watched US jobs report for June at 1330 BST.
The UK corporate calendar on Friday has a trading statement from housebuilder Vistry Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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