(Alliance News) - Stock prices in Europe closed higher on Thursday, with investors taking heart from dovish updates from both the Bank of England and the US Federal Reserve.
London's large-cap index shook off an improved session for the pound, share price declines for grocer and technology firm Ocado Group as well as oil majors. In the US, rising bond yields battered big tech stocks, hurting the Nasdaq Composite.
"Last night, the Federal Reserve maintained its dovish stance and that triggered the bullish moves seen in European stocks today. Several hours ago the Bank of England kept their policy unchanged too, so that contributed to the positive move also," CMC Markets analyst David Madden commented.
The FTSE 100 index closed up 17.01 points, or 0.3%, at 6,779.68. The FTSE 250 rose 10.01 points to 21,568.56. The AIM All-Share fell 2.20 points, or 0.2%, at 1,199.08.
The Cboe UK 100 ended up 0.2% at 676.04, the Cboe UK 250 also closed up 0.2%, at 19,247.61. The Cboe Small Companies rose 0.1% to 13,957.80.
In Paris, the CAC 40 ended 0.1% higher, while Frankfurt's DAX 30 climbed 1.2%. The DAX hit an all-time high of 14,804.01 points earlier in the session.
The Bank of England on Thursday decided against tightening monetary policy, despite a backdrop of rising sovereign bond yields and inflationary concerns in recent weeks.
The Bank of England's Monetary Policy Committee voted unanimously to keep the bank rate at 0.1%. The nine-strong committee also voted to maintain the total target stock of asset purchases at GBP895 billion.
The BoE's announcement followed the US Federal Reserve on Wednesday, which similarly kept monetary policy loose, despite grappling with the same inflation and yield worries.
"Despite a more upbeat assessment of near-term trends, the MPC reiterated its commitment not to tighten monetary policy until there is 'clear evidence' that the recovery is eliminating much of the spare capacity in the economy," Lloyds analyst Nikesh Sawjani said.
The pound was trading at USD1.3949 at the London equity market close on Thursday, up from USD1.3873 on Wednesday. During Thursday's session, cable had hit USD1.40 for the first time since last Friday.
The euro fetched USD1.1935 at the European equities close on Thursday, up from USD1.1900 on Wednesday. Against the yen, the dollar was trading at JPY108.95, down from JPY109.29.
The stronger session for the pound hurt the FTSE 100's dollar earners. Experian fell 1.0% and Intertek lost 1.8%.
Ocado fell 4.9%. Ocado Retail, a joint venture between Ocado Group and Marks & Spencer, said retail revenue grew 40% in the 13 weeks to February 28, reflecting strong demand for online grocery during the latest lockdown.
The average order size was GBP147 in the period, as a result of seasonal strength over the Christmas holiday and "a temporary reversal of the trend towards normalised shopping behaviour in response to further national lockdown measures in the UK".
The joint-venture will soon begin to see tougher comparatives, however.
"The pandemic provided a forceful tailwind for the online grocer, and its equal partner M&S. As we start the slow journey out of lockdown though, the hard work begins. Comparisons compared to this time last year when people were stockpiling will be a lot tougher. As such, retail revenue and profits are expected to grow at a slower rate. That's to be expected, but Ocado's banking on the pandemic having triggered a long-term increase in demand for online groceries," Hargreaves Lansdown analyst Sophie Lund-Yates said.
Among mid-caps, 888 Holdings rose 4.5%. It offered an additional payout to shareholders, as revenue jumped by more than 50% in 2020 and adjusted profit doubled, as lockdowns to combat the spread of coronavirus created a boom on online gaming.
Revenue rose by 52% to USD849.7 million from USD560.3 million. Pretax profit in 2020 fell to USD26.7 million in 2020 from USD45.3 million in 2019, due to USD78.2 million in exceptional charges, up from just USD2.3 million in such charges in 2019.
888's annual dividend of 18.0 cents for 2020 was triple the 6.0 cents paid for 2019.
On AIM, Fevertree Drinks shed 12% as the premium tonic water maker reported a drop in annual profit as lockdown restrictions took the fizz out of sales.
For 2020, revenue was GBP252.1 million, down 3% from GBP260.5 million in 2019, and pretax profit was GBP51.6 million, down 29% from GBP72.5 million. It also reported adjusted earnings before interest, tax, depreciation and amortisation margin of 22.6%, down from 29.6%.
BP fell 0.6% and Royal Dutch Shell 'A' shares and 'B' stock fell 0.9% and 1.2%.
"Crude prices are declining for a fifth consecutive day as concerns grow that Europe won't have a regular summer. The crude demand outlook for the US appears to be the complete opposite for the eurozone. Europe is seeing a third straight week of rising of Covid cases and with vaccination hurdles remaining in place, the outlook does not seem it will be getting better anytime soon," OANDA analyst Edward Moya said.
Brent oil was quoted at USD65.14 a barrel at the London equities close on Thursday, down from USD67.64 on Wednesday. An ounce of gold fetched USD1,735.34, up from USD1,727.63.
Rising bond yields put US technology stocks under pressure. Amazon shares were 1.4% lower, while Google owner Alphabet's 'A' stock was down 1.2%.
The Nasdaq Composite was down 1.2% at the time of the London equities close. The S&P 500 was 0.2% lower but the Dow Jones Industrial Average was 0.6% higher.
The international economic calendar on Friday has an interest rate decision overnight from the Bank of Japan and German producer prices at 0700 GMT.
Friday's local corporate calendar has interim results from pub firm JD Wetherspoon and a trading statement from financial services firm Investec.
By Eric Cunha; ericcunha@alliancenews.com
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