LONDON (Alliance News) - The FTSE 100 reached a new intraday record high Monday, led by banking stocks Standard Chartered and HSBC Holdings, after Greek Prime Minister Alexis Tsipras reshuffled its bailout-negotiating team, sidelining Finance Minister Yanis Varoufakis.
The FTSE 100 closed up 0.5% at 7,103.98, having reached a new record high of 7,122.37 during the afternoon session. The mid-cap FTSE 250 ended up 0.3% at 17,784.67 and the AIM All-Share up 0.3% at 755.57.
European indices also ended higher, with the CAC 40 in Paris up 1.3% and the DAX 30 in Frankurt up 1.9%. At European equity markets close, Wall Street was higher, with the DJIA up 0.3% and the S&P 500 and Nasdaq Composite both up 0.2%.
"Stalled Greek bailout negotiations have left stocks below record highs, but there was a bit more optimism on Monday with Athens seemingly having sidelined its trouble-making finance minister, Yanis Varoufakis," said CMC Markets UK analyst Jasper Lawler.
Prime Minister Alexis Tsipras appeared to bypass his finance minister in favour of a new "political negotiation team", giving more responsibility to Euclid Tsakalotos, the government's chief economics spokesman.
The Oxford-educated economist and professor will now head the bailout group, while a separate coordination team - led by the Finance Ministry's general secretary, Nikos Theocharakis - will oversee technical talks with the heads of the country's international creditors, known as the Brussels Group.
"If the Syriza-led government of Alexis Tsipras want to progress in negotiations and avoid default, it’s probably the right move to put its finance minister on the proverbial chopping block," added Lawler.
Also Monday, Greece scrambled to find enough cash to pay pensions and public employees after eurozone ministers insisted that the country should not expect any more aid until all bailout terms are met. Over the weekend, mayors and the heads of local governments agreed to hand over their cash reserves to the state after initially balking at the request made by Prime Minister Tsipras.
Greece is scheduled to pay the International Monetary Fund around EUR200 million on Friday, before another payment of EUR745 million is due on May 12.
On the London Stock Exchange, Standard Chartered, up 4.3%, was the best performer in the blue-chip index ahead of issuing a first-quarter interim management statement due at 0915 BST on Tuesday.
HSBC Holdings was the second best performer, up 3.0%. The bank already had added 2.9% on Friday, when it announced a review of the possibility of moving its headquarters outside the UK. Over the weekend, the Sunday Times reported that HSBC also is mulling the spin-off of its UK retail bank into a separate business for about GBP20 billion.
"HSBC investors are warming to reports that the UK domiciled and London listed bank is mulling a spin-off of its UK retail banking operations to ensure it remains flexible to any changes to the UK's membership in the EU," said Will Hedden, a dealer at London Capital Group.
Outside banking stocks, Centrica closed up 1.7% as it reiterated its full-year guidance, after the cold winter boosted energy consumption in its British Gas business despite a broadly flat number of residential accounts and lower numbers of business customers. However, the company noted its outlook is clouded by the upcoming General Election and the regulatory review of the UK gas and electricity market.
The FTSE 100-listed company said residential gas consumption through British Gas was 10% higher in the first three months of 2015 than a year earlier with electricity consumption increasing by 2%.
Analysts have raised concerns about the impact that the General Election could have on Centrica and its utilities peers. The two main parties, Conservatives and Labour, are running neck-and-neck in the polls, and Labour has pledged to cap energy prices and to force companies to split energy supply and distribution arms if it forms the next government.
Sports Direct International ended up 2.0% after RBC Capital Markets upgraded the sports retailer to Sector Perform from Underperform. RBC said online sales are improving again and it feels the valuation for the sports retailer is now more reasonable.
RBC also upgraded FTSE 250-listed SuperGroup to Outperform from Sector Perform, saying the fashion retailer's valuation is undemanding, and it should deliver double-digit top and bottom line growth. SuperGroup finished as the best performer in the mid-cap index, up 4.9%.
On the flip-side, Tullow Oil traded higher initially Monday but eventually ended down 0.5%. Tullow had said its flagship TEN project can continue to be developed, despite an international tribunal ordering the suspension of all new exploration for oil and gas in a disputed offshore area between Ghana and the Ivory Coast.
Other oil-related stocks also declined, as the Brent oil price slipped to USD65.00 a barrel in the day after having reached on Friday its highest level since December 10 at USD65.75 a barrel. BP closed down 0.1% and Ophir Energy closed down 1.2%.
In the corporate calendar Tuesday, BP releases first-quarter results, while St James's Place and Segro issue first quarter interim management statements. Whitbread publishes its full-year results, while Rexam also provides an interim management statement. Aseana and Avocet Mining release full-year results and AB Dyanamics half-year results.
In the economic calendar, UK GDP is due at 0930 BST, while in the US, the Redbook index is due at 1355 BST and consumer confidence is at 1500 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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31 Mar 2016 15:15
