Britain's top shares charged ahead for a fifth straight day, with mining companies, including BHP Billiton and Xstrata, in the driving seat as investors reckoned recent falls had been overdone, while British Airways gained on bullish traffic figures. The broader market was unruffled by news of small explosions outside the building that houses the British consulate in New York and remained watchful as Britons voted in an election likely to hand Prime Minister Tony Blair a third term in office. Although the stock market is unlikely to move significantly unless the Labour Party wins with either a much bigger or a much smaller majority than expected, several retail companies were on the back foot.
"If Labour gets in you will have more tax and spend policies, the pressure will be on the Monetary Policy Committee to keep interest rates higher than they would otherwise be. Consequently we will be living with slower economic growth" said Edward Menashy, economist and strategist at stockbrokers Charles Stanley. "You have seen the retailers screaming in pain recently "
Among blue chips, Next fell 2 percent and Marks & Spencer dropped 0.6 percent, while among mid-caps Carpetright shed 2.8 percent, Matalan dipped 1.1 percent and WH Smith fell 1.6 percent.
But the FTSE 100 share index ended the session up 19.8 points, or 0.4 percent, at 4,902.3 after hitting 4,917, its highest level since April 15. The index has climbed 2.4 percent in the past week to bounce back from a 3-month low.
Deutsche Bank strategists were bullish for the outlook for equity markets.
"Worries about global growth were always likely to emerge at some point this year, as growth was bound to slow given that last year's near 5 percent pace was unsustainable," they said in a note, adding that easing oil prices would provide support.
"If that oil price rise continues to unwind, as we suspect it will, then we should see some of the growth indicators pick up and the market will be able to relax once more."
Energy stocks themselves lent support to the FTSE 100 index, with gains in BP, Shell and BG accounting for just under half of its gains.
Mining stocks were also back in demand once more, recovering from a sell-off triggered by concerns that demand for metals may have peaked.
Xstrata was the top FTSE gainer, sporting a 2.8 percent rise, while BHP Billiton and Rio Tinto each added more than 2 percent.
Shares in ICI led blue chip fallers to nurse a fall of more than 6 percent after a cautious outlook from the chemicals firm and as signs of slowing sales growth outweighed an expected 33 percent rise in quarterly profits.
Meanwhile medical devices firm Smith & Nephew fell 1 percent, rattled by news of lower-than-expected sales in the first quarter.
Stockbroker Cazenove cut its stance on the stock in response.
But shares in defence firm BAE Systems shares rose 1.6 percent after the Financial Times said it was nearing a deal with unions that will knock 1.7 billion pounds off its 2.8-billion-pound UK pension liability.
Flag carrier British Airways added 2.6 percent after it reported that high-margin first-class and business-class passengers rose in April.
Mid-cap serviced-offices firm Regus was among the heaviest traded stocks with more than 100 million shares changing hands. The shares added 1.5 percent after tumbling 10 percent on Wednesday due to derivatives-related selling.
Dealers said a sell-off in Regus, Innovation, Regal Petroleum, Eidos and several other small-cap stocks on Wednesday was related to contracts for differences (CFDs) positions said to be held by entrepreneur Robert Bonnier.
Most of the stocks bounced back on Thursday, but Innovation fell another 4.6 percent on hefty volume of 68 million shares.
Comments
Comments are closed.