LONDON MARKET CLOSE: FTSE 100 Recovers As Gold, Oil Stocks End Higher

(Alliance News) - The FTSE 100 recovered from an otherwise dreary session to end Friday in the green, thanks to bumper dealings in oil and gold stocks after the prices of the two commodities strengthened on a day where global tensions came to the fore again.

The FTSE 100 index closed up 18.1 points, or 0.2%, at 7,622.40 on Friday. The large-cap index ended the week down 0.3%, however.

"The FTSE, which started the session down 0.4%, completely erased its opening losses. That is almost solely thanks to the performance of Brent Crude which, as it tends to do, rose almost 4% in the face of more turmoil in the Middle East. This, in turn, lifted BP and Shell, the oil giants lifting the UK index up on their shoulders. It didn't hurt, of course, that the pound continued its 2020 decline," Spreadex market analyst Connor Campbell said.

The FTSE 250 closed down 120.10 points, or 0.5%, at 21,988.19, the index was down 0.3% for the week.

The AIM All-Share closed marginally higher at 963.45, and ended the week up 1.0%.

The Cboe UK 100 ended up 0.1% at 12,895.01 on Friday, the Cboe UK 250 closed down 0.6% at 19,869.66, and the Cboe Small Companies ended up 0.2% at 12,296.21.

In European equities on Friday, the CAC 40 in Paris closed marginally higher, recovering from heavier losses earlier in the day. In late trade, Frankfurt's DAX 30 was down 1.4%.

The pound was quoted at USD1.3092 at the London equities close, down compared to USD1.3155 at the close on Thursday.

Elsewhere in forex, the euro stood at USD1.1177 at the London equities close Thursday, down against USD1.1185 at the London close on Thursday. Against the yen, the dollar was trading at JPY107.93, soft compared to JPY108.33 late Thursday.

Iran's Supreme Leader Ayatollah Ali Khamenei has threatened the US with "harsh retaliation" after the killing of influential Iranian General Qassem Soleimani, Iranian state television reported on Friday.

Soleimani's path would continue without him, but the perpetrators would face severe revenge, Khamenei said.

The US Defense Department in Washington confirmed earlier that Soleimani was killed in an attack near Baghdad airport in the early hours of Friday, in what the US described as "defensive action" strikes.

In his first substantial comments on the operation, US President Donald Trump tweeted that Soleimani "should have been taken out many years ago!"

Soleimani "has killed or badly wounded thousands of Americans over an extended period of time, and was plotting to kill many more...but got caught!" Trump said. Trump also claimed that "Soleimani was both hated and feared within the country".

"The month long rally in gold and not least oil has extended further today following the U.S. strike against an Iranian general in Baghdad. Middle East tensions once again raise risk of supply disruptions while investors take shelter in gold as stocks falter and inflationary pressures emerge," Saxo Bank's Head of Commodity Strategy Ole Hansen said.

Gold was quoted at USD1,549.40 per ounce at the London close on Friday, surging from USD1,527.98 on Thursday. Brent oil was trading at USD68.11, up from USD65.76 late Thursday.

BP closed 2.8% higher, with Royal Dutch Shell's A shares rising 1.9% higher and the B shares closing 1.8% higher.

Precious metals miners in the blue-chip index got a boost, Fresnillo closed 2.5% higher, peer Polymetal International closed up 1.6%.

"Tensions with Iran have spread to Wall Street as traders are dumping stocks. The Dow Jones posted a record yesterday, so the fear factor surrounding Iran today has prompted traders to exit equities. For now it would seem the bullish run on the back of the Chinese trade deal has dropped off the radar," CMC Markets analyst David Madden said.

Wall Street was in the red. The Dow Jones Industrial Average was 0.9% lower at the London close, both the S&P 500 and Nasdaq Composite were 0.7% down.

It was again a quiet day for corporate news on the FTSE 100, as global tensions dominated the headlines.

One of the few companies updating the market on Friday however was British American Tobacco, which closed 2.5% higher, the second-best performing large-cap stock, eclipsed by only BP.

The US Food & Drug Administration said cartridge-based e-cigarettes in flavours other than tobacco or menthol will become illegal unless specifically authorised by the government. In September the White House had promised a full ban, but this was scuppered by industry pressure.

BAT said the FDA move shows vaping remains a credible alternative to smoking, and welcomed the clarity the new ruling gives.

The change will take effect in early February, outlawing cartridges with fruit, mint and candy flavours, which are particularly popular with young people. The ban will exempt large, tank-based rechargeable vaping devices, however, which are primarily sold in vape shops that cater to adults.

Drum tobacco and Rizla cigarette paper producer Imperial Brands, which also owns the blu vaping brand, closed 2.5% higher, third best-performer of the day on the FTSE 100.

Next ended the day in the red, down 0.2%, but upped its annual pretax profit guidance by GBP2 million to GBP727 million, which would represent 0.6% growth from last year. This was on the back of positive trading in the period from October 27 to December 28, a cycle which includes the crucial Christmas period.

Total full price sales - which include interest income - grew by 5.2% on a year before in the period. Next said the result was 1.1% ahead of its internal forecasts.

Housebuilder Bovis Homes, now Vistry Group, closed 1.4% lower in the FTSE 250.

The company said trading in its shares will commence under the new name and the new TIDM code 'VTY' with effect from the London market open on Monday.

The company also announced it completed the acquisition of Linden Homes and Partnerships & Regeneration units, two Galliford Try units. The deal, agreed in November, is worth a combined GBP1.14 billion.

This includes Bovis issuing 63.7 million new shares to Galliford plus GBP300 million in cash and the assumption of Galliford's GBP100 million 10-year private debt placement.

Finablr closed 3.7% lower on Friday. Late yesterday, its Travelex foreign currency service unit announced that it was victim of a software virus attack on New Year's Eve.

In a statement late Thursday, Finablr said: "There is no indication that any personal or customer data has been compromised and Travelex is working together with cyber experts to resolve the issue. Finablr's six other brands are not affected and are operating as normal. The company continues to monitor the situation closely and will update the market, if required."

Gambling firms GVC, the owner of the Ladbrokes Coral Group, and William Hill closed 1.5% and 4.7% lower, respectively.

British newspaper The Guardian on Thursday reported that the Gambling Commission, the industry regulator, is considering banning exclusive membership programmes which offer losing gamblers perks like free bets. The industry was hit last year when the government introduced stake limits on fixed-odds betting terminals.

In a busy day for economic news on Monday, there was a raft of services purchasing managers' index data, starting with China in the early hours, before the eurozone, the UK and the US follow over the course of the day.

"The eurozone continues to muddle along as demand is still weak and the recent decision to loosen monetary policy by the European Central Bank highlights the need to assist the region. The latest flash readings from the big eurozone economies point to minimal rates of expansion, and traders will be wondering whether that trend will continue. The uncertainty in relation to Brexit has caused the services industry to contract, which is worrying seeing as the sector accounts for approximately 80% of UK economic output," Madden said.

On the corporate front, wealth manager Mattioli Woods is scheduled to release a trading update.

By Eric Cunha; ericcunha@alliancenews.com

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