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(Alliance News) - Stocks in London ended higher on Thursday, amid a broad-based rally in European equities, as the European Central Bank committed to accelerating asset purchases.
The FTSE 100 index closed up 11.36 points, or 0.2%, at 6,736.96. The FTSE 250 ended up 126.43 points, or 0.6%, at 21,533.10. The AIM All-Share ended up 14.82 points, or 1.3%, at 1,197.52.
The Cboe UK 100 ended flat at 670.60, the Cboe UK 250 closed up 0.6%, at 19,142.33, the Cboe Small Companies ended 0.6% higher at 13,799.92.
In Paris the CAC 40 ended up 0.7%, while the DAX 30 in Frankfurt ended up 0.3%.
Spreadex analyst Connor Campbell said: "The ECB's promise to ramp up its bond buying program allowed the markets to maintain the week's positive glow on Thursday.
"It really has been a sharp turnaround from the bond yield-fearing, inflationary pressures-panicking losses that opened the month."
The euro stood at USD1.1960 at the European equities close, up from USD1.1900 late Wednesday in the wake of the European Central Bank's interest rate decision.
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 also left the size of its pandemic emergency purchase programme, or PEPP, unchanged at EUR1.85 trillion.
The ECB said after its latest monetary policy meeting that it will ramp up the pace of its pandemic emergency bond buys, in a bid to soothe market jitters about a rise in government borrowing costs and inflation.
While the ECB did not increase the overall amount of bond purchases planned, the announcement came as investor nervousness has already pushed up yields and despite the central bank acknowledging that inflation will likely run higher than expected in the short term.
"Rising yields are clearly a central issue given recent concerns, with the ECB taking action to drive down yields across the region. However, while the decision to front-load asset purchases under the PEPP scheme may have been designed to bring down yields, traders have seen right through it after initial declines were erased," said IG Group's Josh Mahony.
"Until the ECB decides to increase the overall size of the programme, today's decision to front-load PEPP purchases simply raises the chance of the scheme running its course earlier than expected. The clear correlation between yields and EURUSD meant we did see some initial weakness come into play after the announcement. However, just like the subsequent rise in yields, we are seeing EURUSD continue its recent rise later in the day," Mahony added.
On the London Stock Exchange, gambling firm Flutter Entertainment ended the best blue-chip performer, up 5.5% as it tracked shares in US peer DraftKings higher. Shares in Boston, Massachusetts-based DraftKings were up 3.3% in New York, having surged 9% on Wednesday following its investor day.
DraftKings said at its presentation to investors and analysts that it forecasts the total US online sports betting market represents a USD22 billion opportunity at 100% legalisation, which bodes well for the firm and main rival FanDuel - which is owned by Flutter.
Broker Davy, which reiterated its Outperform rating on Flutter, said: "Flutter Entertainment's current momentum confirms it is best positioned to capitalise on a wide-ranging set of global gaming opportunities. A clear leadership position in the US and fast-growing businesses in other key geographies are delivering strong top line progress."
At the other end of the large-caps HSBC ended the worst performer, down 4.7%, after the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout. The Asia-focused bank also proposed to phase out all coal power financing by 2040 and affirmed its aim of committing up to USD1 trillion in green financing and investments.
Wm Morrison Supermarkets closed 1.8% lower after the grocer posted consensus-topping sales growth and profit, but noted it incurred GBP290 million in Covid-19-related costs.
In the financial year ended January 31, like-for-like sales growth, excluding both VAT and fuel, was up 8.6% annually. According to consensus compiled by Vuma, Morrisons was tipped to notch smaller like-for-like growth of 7.9%. In financial 2020, it posted a like-for-like sales fall of 0.8%, highlighting just how much the grocer's sales benefited from boosted demand amid Covid-19.
Annual revenue rose 0.4% to GBP17.60 billion from GBP17.54 billion. Pretax profit dropped 62% to GBP165 million from GBP435 million.
However, stripping out exceptional items, pretax profit beat forecasts. It came in at GBP201 million, down 51%, but marginally higher than the GBP200 million it was tipped to post, according to consensus.
Morrisons noted pretax profit before exceptional items would have been 5.6% higher year-on-year at GBP431 million, were it not for the GBP230 million of waived business relief rates it returned.
AstraZeneca closed down 2.5% after Danish health authorities suspended the use of the pharmaceutical group's Covid-19 vaccine as a precaution after some patients developed blood clots since receiving the jab. Norway later joined Denmark on putting the vaccine on hold.
Hikma Pharmaceuticals ended 1.9% lower after the generic drugmaker ended talks regarding the potential acquisition of GlaxoSmithKline's businesses in Egypt and Tunisia. GlaxoSmithKline closed down 0.6%.
In the FTSE 250, Marshalls closed up 8.2% after the concrete hard landscaping products maker said it made a strong start to 2021.
Marshalls reported a decline in 2020 revenue to GBP469.5 million from GBP541.8 million a year earlier, with pretax profit plummeting to GBP4.7 million from GBP69.9 million in 2019.
However, Marshalls said trading has started strongly in 2021, with sales at the end of February up 7% and orders up 12% compared to the same period in 2020.
At the other end of the midcaps, Helios Towers ended the worst performer, 6.0% lower. The telecom tower infrastructure company late Wednesday posted a rise in annual revenue against the backdrop of the global Covid-19 pandemic, but refrained from declaring a dividend.
The pound was quoted at USD1.3970 at the London equities close, up from USD1.3902 at the close Wednesday.
Against the yen, the dollar was trading at JPY108.51, down from JPY108.65 late Wednesday.
Stocks in New York were sharply higher at the London equities close as Congress passed US President Joe Biden's massive financial aid package and as jobs market improved.
The DJIA was up 0.9%, the S&P 500 index up 1.2% and the Nasdaq Composite up 2.1%.
US initial jobless claims decreased by 42,000 last week to 712,000 claims on the prior week's 754,000, both beating expectations and coming in at the lowest since November.
"The key takeaway from the initial jobless claims data is that initial claims are still high, but at least they are moving in a direction that suggests the economy is finding its growth stride again," said market analyst Patrick O'Hare at Briefing.com.
Brent oil quoted at USD69.32 a barrel at the equities close, up sharply from USD67.85 at the close Wednesday.
"Crude prices benefited from the broader risk-on rally and held onto gains after the monthly OPEC report showed a weaker demand outlook in the first half of the year due to Europe's restrictive measures to control COVID-19. Energy market traders are still expecting a tight oil market as OPEC+ will only raise output once the recovery in oil demand is clear," Oanda Markets analyst Edward Moya explained.
Gold was quoted at USD1,722.35 an ounce at the London equities close, slightly higher against USD1,719.15 late Wednesday.
The economic events calendar on Friday has the monthly UK GDP reading and industrial production data at 0700 GMT and US producer prices at 1330 GMT.
The UK corporate calendar on Friday has annual results from shopping centre operator Hammerson and a trading statement from housebuilder Berkeley Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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