LONDON MARKET CLOSE: FTSE 250 flies ahead as stocks make up ground

Thu, 22nd Apr 2021 17:02

(Alliance News) - The rebound continued on Thursday, with the FTSE 100 adding over 40 points and the FTSE 250 surging ahead after mid-cap Morgan Sindall raised its full-year outlook.

The FTSE 100 index closed up 42.95 points, or 0.6%, at 6,938.24 - though remains 1.2% lower since the week.

The FTSE 250 ended up 279.14 points, or 1.3%, at 22,364.87, and the AIM All-Share closed up 18.06 points, or 1.5%, at 1,263.69.

The Cboe UK 100 ended up 0.5% at 690.58, the Cboe UK 250 closed up 1.2% at 19,985.95, and the Cboe Small Companies ended up 0.1% at 14,410.93.

In European equities on Thursday, the CAC 40 in Paris ended 0.9% higher, while the DAX 30 in Frankfurt ended up 0.8%.

"European markets have been cheered by the continued dovish stance of the ECB and their decision to 'significantly' increase the pace of bond purchases for the second quarter. This has, unsurprisingly, put pressure on the euro, which has edged back against the US dollar, but overall the continued support for the eurozone economy has bolstered investor enthusiasm for eurozone assets," said Chris Beauchamp, chief market analyst at IG, adding that this good mood spilled over to London.

The European Central Bank on Thursday made no change to monetary policy and pushed back on suggestions it was thinking about scaling back stimulus.

The Frankfurt-based central bank kept the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively.

The ECB also left the size of its pandemic emergency purchase programme, or PEPP, unchanged at EUR1.85 trillion until at least the end of March 2022 and, "until it judges that the coronavirus crisis phase is over". However, the ECB expected purchases under the PEPP over the current quarter to continue to be conducted at a "significantly higher pace than during the first months of the year".

At the subsequent press conference, ECB President Christine Lagarde reiterated the message that there will be no premature end to "favourable financing conditions" until the Covid-19 crisis is deemed over and the rebound is firmly on track.

The ECB head was repeatedly quizzed on the timing in the reduction of asset purchases after the Bank of Canada became the first major central bank to signal an exit from stimulus, as it hailed a stronger-than-expected recovery from the pandemic.

Lagarde confirmed that the Governing Council did not discuss any phasing out of PEPP and said it was premature to discuss tapering, despite noting that medium-term risks for the economy are balanced.

The euro stood at USD1.2014 at the European equities close Thursday, lower against USD1.2034 at the same time on Wednesday.

Michael Hewson at CMC Markets put the euro's slip on Thursday down to a stronger dollar on the back of improved US jobless claims rather than as a result of a "routine" ECB press conference with Lagarde.

US initial jobless claims hit their lowest level in over a year, figures showed on Thursday.

For the week ending April 17, the advance figure for seasonally adjusted initial claims was 547,000, a decrease of 39,000 from the previous week's revised level. The latest reading was well below market expectations of 617,000. This is the lowest level for initial claims since March 14, 2020 when it was 256,000.

The figures came just a day after US President Joe Biden hailed his government's "stunning" achievement in administering 200 million Covid-19 vaccine shots across the US ahead of schedule.

While the US leads the world in reported Covid-19 deaths, its vaccination programme has raced ahead of other countries, outperforming some major European countries and neighbouring Canada.

Biden said the country was still "on track" to being able to celebrate the July 4th Independence Day holiday in relative normality.

ING commented: "With the economy opening up more and more each day we are anticipating a series of one million plus monthly payrolls gains that could be enough for the Federal Reserve to call "substantial further progress" and start the tapering process before the end of the year."

As well as the euro, the dollar also rose against the pound and the yen.

The pound was quoted at USD1.3838 at the London equities close Thursday, falling from USD1.3937 at the close on Wednesday. Against the yen, the dollar rose to JPY108.11 compared to JPY108.08 late Wednesday.

The mood was tepid in New York at the London equities close, with the Dow Jones down 0.1%, the S&P 500 index flat, and the Nasdaq Composite up 0.3%.

Brent oil was quoted at USD65.58 a barrel at the London equities close Thursday, down from USD65.90 late Wednesday. Gold was quoted at USD1,782.29 an ounce, down against USD1,792.76 at the close on Wednesday.

In London, the FTSE 250 powered ahead of its blue-chip counterpart as shares in Morgan Sindall rocketed 20%. The construction and regeneration firm said it is on track to beat annual expectations as it has made progress across the board so far in 2021.

"On the basis of the performance to date, the group's operational delivery capabilities and the current visibility of future workload for delivery in the remainder of the year, the group is now on track to deliver a full-year performance which is significantly ahead of its previous expectations," Morgan Sindall said.

The company noted its Construction & Infrastructure division has made a healthy start to the year. The Fit Out unit's order book at the end of March was 18% higher annually.

Travel stocks rallied on reopening hopes, with easyJet closing up 4.7% while WH Smith, which operates shops in places such as airports and train stations, rose 4.5%. In the FTSE 100, British Airways parent International Consolidated Airlines rose 3.4%.

Elsewhere in the large-cap index, Polymetal International shares rose 3.5% after the precious metals miner said revenue and output grew in its first-quarter.

Gold production rose 4% annually in three months to March 31 to 337,000 ounces, from 324,000 ounces. Gold equivalent production rose 3% to 375,000 ounces from 365,000 ounces a year earlier. Polymetal affirmed its full-year target of gold equivalent production of 1.5 million ounces.

Informa fell 2.1% as it swung to an annual loss due to event cancellations, but pointed to a recovery as global vaccination programmes continue.

The London-based publishing, business information, and exhibitions company swung to a 2020 pretax loss of GBP1.14 billion after posting a profit of GBP318.7 million in 2019. Revenue slumped 43% to GBP1.66 billion from GBP2.89 billion, in line with market forecasts.

Friday's UK corporate calendar has trading statements from Record and XPS Pensions Group.

The economic calendar on Friday has Japanese inflation at 0030 BST, UK retail sales at 0700 BST and then a raft of PMIs, with Germany at 0830 BST, the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.

By Lucy Heming; lucyheming@alliancenews.com