LONDON (Alliance News) - UK stocks closed higher Monday, snapping a four-day losing streak, as investor sentiment improved in the wake of dovish comments by central bank chiefs in China and the US.
London-listed technology stocks bounced back after seeing some heavy selling last week, with the FTSE 350 Technology Hardware & Equipment sector index closing up 2.0%. FTSE 100-listed ARM Holdings ended 2.5% higher, while in the FTSE 250, Pace ended up 0.6%, Sage closed up 1.5% and Laird ended up 0.4%.
The FTSE 100 ended up 0.5% at 6,891.43, while the FTSE 250 closed up 0.3% at 17,208.10. The AIM All-Share index ended up 0.2% at 718.67.
European indices ended also higher, with the CAC 40 in Paris up 1.1% and the DAX 30 in Frankfurt up 1.8%.
Stocks across Europe opened higher Monday after a strong performance by indices in Asia overnight and in the US on Friday. Asian stocks were lifted as the People's Bank of China Governor Zhou Xiaochuan indicated that the central bank could ease its monetary policy further if required.
"We need to be vigilant to see if the disinflation trend will continue to reach some sort of deflation or not," Xiaochuan said adding China has room to act if inflation continues to fall.
US shares were trading higher again when the European markets closed, following on from Friday's gains after US Federal Reserve Chair Janet Yellen struck a cautious note on interest rates, saying a rate hike may be warranted later this year, but any increase in interest rates would be gradual and data dependent.
"Although she specifically didn’t say it, Yellen essentially said if the US economy rolls over, we could even move back to QE again. Markets are interpreting Chair Yellen’s statements as a win-win in a never-ending game of moving between economic expansion and Fed backstopping," said CMC Markets analyst Jasper Lawler. "So even if rates do rise later this year, we’ll still be data-watching because there is no predetermined path of rate hikes following it."
At London equity markets close, the DJIA was trading up 1.5% while the S&P 500 was up 1.0% and the Nasdaq Composite was up 0.9%.
The US Commerce Department said personal income rose by slightly more than expected in February. The Commerce Department said personal income climbed by 0.4%, matching the upwardly revised increase seen in January. Economists had been expecting income to rise by 0.3%, which would have matched the growth originally reported for the previous month.
Separately, the US National Association of Realtors said its pending home sales index jumped 3.1% to 106.9, its highest level in twenty months in February. Economists had expected the index to edge up by 0.3%.
Oil prices were down after a Saudi-led coalition intensified airstrikes against Houthi rebel military targets in Yemen on Sunday. The Shiite rebels have taken control of large parts of the impoverished country and are seen as being backed by Iran, Sunni-dominated Saudi Arabia's regional rival. When the London equity markets closed, Brent oil was quoted at USD55.71 a barrel and West Texas Intermediate was quoted at USD48.11 a barrel.
Constituents of the FTSE 350 Oil and Gas Producers sector index ended down except for BP, up 0.6% and Royal Dutch Shell 'A' and 'B' shares, up 1.1% and 0.9%, respectively.
Kingfisher was one of the best performers in the blue-chip index, closing up 2.0%, after the DIY retailer said will not proceed with a deal to acquire Mr Bricolage amid continued opposition to the deal from a key shareholder and the board of the French company. Kingfisher entered a deal in July last year to acquire Mr Bricolage for EUR275 million.
But the owner of stores including B&Q and Screwfix, said the deadline for gaining antitrust clearance for the deal in France was March 31 and, as a result of the opposition to the deal from ANPF and the Mr Bricolage board, that deadline is no longer viable.
In the FTSE 250, Al-Noor Hospitals Group was the worst performer, down 4.9%. The Abu Dhabi-based healthcare provider said its pretax profit and revenue both rose in 2014 as the group further expanded its operations, but shares in the company fell amid concern about the impact its expansion is having on margins.
Numis downgraded its rating on Al Noor following the results to Hold from Add, saying the consensus estimates for its margins remains too high. Numis analyst Charles Weston, said it expects margins for the company to deteriorate in 2015 and added shares in the company performed well in the lead up to the results, hence the downgrade.
In the corporate calendar Tuesday, Kingfisher, Chesnara, InternetQ and LiDCO Group will release full year results, while James Halstead will publish half-year results. Mitie, RPC Group, Thomas Cook Group and QinetiQ Group will issue trading updates.
In the economic calendar, German retails sales data is due at 0700 BST and German unemployment data is at 0855 BST. UK Current account and GDP are at 0930 BST, while eurozone's Consumer Price Index and Unemployment Rate are at 1000 BST. In the US, Chicago Purchasing Manager's Index is at 1445 BST, while US Consumer confidence is at 1500 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2015 Alliance News Limited. All Rights Reserved.
17 Feb 2015 09:03