LONDON MARKET CLOSE: Travel and oil stocks send FTSE 100 higher

(Alliance News) - Stocks in London ended higher on Friday, with the FTSE 100 boosted by travel companies and oil majors, while US equity markets were higher as bank earnings from Goldman Sachs failed to disappoint.

The FTSE 100 index closed up 26.32 points, or 0.3%, at 7,234.03 on Friday - registering a rise of 2.2% for the week overall.

The FTSE 250 ended up 123.85 points, or 0.5%, at 22,984.24 ending the week up 1.8%. The AIM All-Share closed up 4.02 points, or 0.3%, at 1,229.10, ending the week up 1.6%.

The Cboe UK 100 ended up 0.2% at 717.40, the Cboe UK 250 closed up 0.4% at 20,742.60, and the Cboe Small Companies ended flat at 15,583.90.

In Paris, the CAC 40 stock index ended up 0.6%, while the DAX 40 in Frankfurt ended up 0.8%.

"The FTSE 100 has managed to sustain the gains from yesterday, consolidating at 18-month highs, helped by strong performances across a number of key sectors, with energy, financials and basic resource stocks all seeing strong gains, not to mention the outperformance of companies like Rolls Royce, which is up over 25% from its September lows," said CMC Market analyst Michael Hewson.

"The UK benchmark is also the one major market that hasn't been able to recover its post pandemic highs so clearly has room to play catch up, and open up a move towards 7,400, towards the 2019 highs of 7,727," Hewson added.

In the FTSE 100, Evraz ended the best performer, up 3.8%, after UBS upgraded the Russian steelmaker to Neutral from Sell.

Travel stocks were higher after the US said that it will allow entry to foreign travellers who are fully vaccinated against Covid-19, by both land and air, starting November 8.

"This policy is guided by public health, stringent, and consistent," tweeted White House Assistant Press Secretary Kevin Munoz in announcing the news.

In an effort to slow the spread of the coronavirus, US borders were closed after March 2020 to travellers from much of the globe, including the EU, Britain and China, India and Brazil. Overland visitors from Mexico and Canada were also banned.

Transatlantic carrier International Consolidated Airlines closed up 3.3% and hotel operator InterContinental Hotels Group, which counts the US as its largest market, up 2.6%.

Antofagasta closed up 2.1% after RBC Capital raised the Chilean copper miner to Sector Perform from Underperform.

Shares in oil majors BP, Royal Dutch Shell 'A' and 'B' closed up 1.7%, 1.6% and 1.9% respectively as Brent crude topped USD85 a barrel. In addition, Berenberg raised BP to Buy from Hold.

Brent oil was quoted at USD84.73 a barrel at the equities close, up sharply from USD83.75 at the close Thursday. The North Sea benchmark hit an intraday high of USD85.10 in early trade - its highest level since October 2018.

Languishing at the end of the large-caps, Pearson lost 15% after the education publisher backed full-year forecasts but said a further slump in Higher Education sales held back underlying sales growth across the group.

For the nine months to the end of September, total sales were up 10% on an underlying basis.

All segments saw growth except for Higher Education, where sales fell 7% as growth in international courseware, including Canada and the UK, was more than offset by a 9% decline in US Higher Education Courseware. Pearson pointed to a decline in US enrolments, particularly in community colleges.

Pearson said it remains on track to deliver full-year adjusted operating profit in line with market expectations, which it placed at GBP377 million. This would be up from GBP313 million in 2020, but still far lower than the GBP581 million achieved in 2019.

Hargreaves Lansdown closed down 1.7% after the fund supermarket reported a slight dip in revenue as it said the "normalisation" of trends post-pandemic has been in line with its expectations.

The Bristol-based firm ended September 30 with assets under administration stood at GBP138.0 billion at the end of September, up 1.8% since June 30 when they stood at GBP135.5 billion and up 29% from GBP106.9 billion at the same point a year before.

The largest growth was seen in HL's Fund assets, growing to GBP67.8 billion from GBP66.6 billion over the quarter.

Revenue slipped to GBP142.2 million from GBP143.7 million a year ago. Asset-based revenue was higher, but this was more than offset by a drop in interest on client money and a reduction in share-dealing revenue.

In the FTSE 250, Mediclinic International ended the star performer, up 12%, after the private hospital operator said its revenue in the first half of its current financial year was ahead of pre-pandemic levels across all three divisions.

The Stellenbosch, South Africa-based firm delivered 12% revenue growth to GBP1.58 billion in the six months to September 30. Its performance was driven by a recovery in patient activity across all three divisions.

When compared with pre-pandemic, revenue was up 4% at the group, with Hirslanden and Mediclinic Middle East delivering volumes in excess of pre-virus levels.

Elsewhere, Go-Ahead Group ended up 1.1% after RBC raised the transport operator to Outperform from Sector Perform.

The pound was quoted at USD1.3780 at the London equities close, up sharply from USD1.3680 at the close Thursday.

The euro stood at USD1.1603 at the European equities close, up from USD1.1587 late Thursday. Against the yen, the dollar was trading at JPY114.17, up from JPY113.63 - trading at fresh three-year highs.

Stocks in New York were higher at the London equities close following upbeat US retail sales figures, as bank earnings season drew to a close.

The DJIA was up 0.7%, the S&P 500 index up 0.8% and the Nasdaq Composite up 0.3%.

US retail sales surprised with a September increase, data from the Census Bureau showed. Month-on-month, retail & food services sales were up 0.7% in September, growth moderating from 0.9% in August but beating expectations, cited by FXStreet, for a 0.2% fall.

"A strong performance from retail sales coupled with surging spending on travel and leisure suggests that the economy is re-accelerating after the recent Covid-related slowdown. This should help cement expectations for a November 3 QE taper announcement from the Federal Reserve," said ING.

Goldman Sachs advanced 2.5% after reporting a jump in third-quarter profit on robust gains in its financial advisory and trading divisions.

In the three months to September 30, the New York-headquartered investment bank and financial services firm recorded net income of USD5.38 billion, up from USD3.37 billion a year before.

Diluted earnings per share surged to USD14.93 from USD8.98.

Gold stood at USD1,773.75 an ounce at the London equities close, lower against USD1,797.11 late Thursday.

The economic events calendar on Monday has China economic growth figures and retail sales overnight.

The UK corporate calendar on Monday has a trading statement from fund manager Schroders.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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