LONDON MARKET CLOSE: FTSE 100 Retakes 7,000 As Greece Meets Deadline

LONDON (Alliance News) - The FTSE 100 regained ground Thursday and ended above the 7,000 mark for the first time in April, with market participants relieved that Greece met a debt repayment deadline with the International Monetary Fund.

The FTSE 100 closed up 1.1% at 7,015.36, ending above the 7,000 mark for the first time since March 24. The FTSE 250 finished higher for a fifth consecutive session, up 0.9% to 17,715.54. The AIM All-Share closed up 0.9% at 732.36.

European indices also closed higher, with the CAC 40 in Paris up 1.4% and the DAX 30 in Frankfurt up 1.1%.

Greece repaid EUR450 million it owed to the International Monetary Fund on Thursday, the Financial Times reported, citing a central bank official. The Greek government also is due to pay EUR194 million to private bondholders on April 17, followed by a further EUR80 million payment to the European Central Bank on April 20.

“Next month is a different matter. We are going to run out of money unless reforms are legislated to make some bailout funds available,” the official said, according to the FT.

London equities were given a boost at the open after the minutes from the recent Federal Open Market Committee meeting showed members were split on whether the US central bank should raise rates in June.

The minutes of the two-day FOMC meeting, held in March, showed that several participants determined that the economic data and outlook were likely to warrant the beginning of the process of raising US interest rates in June. Others said conditions would not be appropriate to begin raising rates until later in the year due to the effects lower energy prices and the dollar's appreciation have on inflation.

However, the meeting was held before the release of the latest jobs data last Friday, which showed employment in the US rose by much less than expected in March.

Following those disappointing jobs figures, the US Labor Department released Thursday a report showing an increase in first-time claims for US unemployment benefits in the week ended April 4th.

The report said initial jobless claims climbed to 281,000, an increase of 14,000 from the previous week's revised level of 267,000. Economists had expected jobless claims to rise to 285,000 from the 268,000 originally reported for the previous week.

"The damage this does to the possibilities of a June rate hike, and the prevention of unneeded extra strength in the dollar this delay would provide, should have been a boon for the US markets after the bell. However, the greenback showed no sign of slowing down after the figure was released," said Spreadex analyst Connor Campbell.

The pound weakened against the dollar Thursday, trading at USD1.4744 at the close of London equity markets. The euro declined to USD1.0672.

At the close of London equity markets, Wall Street was mostly lower, with investors digesting both the FOMC minutes and the jobless claims, as well as first quarter results issued late Wednesday by aluminium company Alcoa. The DJIA was down 0.2%, the S&P 500 down 0.1, and the Nasdaq Composite down 0.2%.

Earlier Thursday, the pound already had suffered against the dollar after data from the Office for National Statistics showed the UK trade deficit in goods widened by more than expected in February to its biggest gap in seven months. The visible trade deficit increased to GBP10.34 billion from GBP9.17 billion in January. Economists had forecast a shortfall of GBP9 billion.

The data was followed by the last Bank of England's monetary policy decision before the UK general election in May. The BoE kept its key interest rate at 0.5% and the size of asset purchases at GBP375 billion at the end of the two-day rate setting meeting. The bank is set to release the minutes of the meeting on April 22.

Amongst individual stocks in London, Burberry Group was one of the biggest gainers in the FTSE 100, up 3.2% at 1,798.13 pence. JP Morgan raised its forecasts for Burberry's financial years 2016 and 2017 due to the sterling cost benefit of the luxury fashion retailer's sourcing in euros. The bank also raised its price target on the stock to 1,560.00p from 1,470.00p to reflect the changes, and maintained its Neutral rating.

Mondi also was amongst the best performers in the blue-chip index, up 2.7% at 1,397p. Barclays raised its price target on the stock to 1,270p from 1,185p.

Miners Anglo American, down 0.2%, and BHP Billiton, down 1.1%, were amongst the biggest losers in the blue-chip index after Credit Suisse downgrades. The bank cut Anglo American to Neutral from Outperform and downgraded BHP Billiton to Underperform from Neutral.

In the FTSE 250, Euromoney Institutional Investor was the best performer, up 4.5%, after it said it has appointed Andrew Rashbass as its new executive chairman. Rashbass is the chief executive of Reuters, part of US data and publishing company Thomson Reuters. He will take over from Richard Ensor, who will retire in September.

The companies involved in the Horse Hill prospect in Surrey, England on Thursday said they have made an oil discovery at the Horse Hill 1 well in the Weald basin that could be more than double the entire production from the North Sea over the past 40 years. However there remains a big question mark over how much of the oil can be recovered.

The news saw shares of all the companies involved jump. Shares of UK Oil & Gas Investments and Alba Mineral Resources more than doubled, Doriemus shares leapt 63%, Stellar Resources rose 53%, Solo Oil climbed 26%, and Evocutis shares added 20%. All were among the best performers in the AIM All-Share.

In the economic calendar Friday, China's Consumer Price Index is due at 0230 BST, while UK industrial and manufacturing production data are at 0930 BST. In the US, import and export price indices are at scheduled for 1330 BST.

In the corporate calendar, Vedanta Resources releases fourth-quarter production results, while Hays issues an interim management statement. XP Power publishes a first quarter interim management statement, while Huntsworth and Biofrontera release full-year results.

By Daniel Ruiz; danielruiz@alliancenews.com

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