London stocks were back into positive territory by the close on Thursday, as investors digested the latest policy announcement from the European Central Bank, while ex-dividend stocks kept a lid on the gains.
The FTSE 100 ended the session up 0.17% at 6,736.96, and the FTSE 250 was ahead 0.59% at 21,533.10.
Sterling was in a mixed state, last gaining 0.25% on the dollar to trade at $1.3967, but remaining flat against the euro at 1.1681.
“The ECB’s promise to ramp up its bond buying program allowed the markets to maintain the week’s positive glow on Thursday,” said Spreadex financial analyst Connor Campbell.
“Though ECB decisions are rather peripheral to the Dow Jones, the largely market-calming update from Christine Lagarde and company was the perfect backdrop for the index to hit new heights.
“Adding close to 300 points, the Dow found itself within touching distance of 32,600, hitting a fresh record peak with every point gained.”
Campbell said it had been a sharp turnaround from the “bond yield-fearing, inflationary pressures-panicking” losses that opened the month, and with those worries still lingering, the Dow had still made strides in the last week.
“Though not quite as emphatic as the Dow, the DAX still found its way to a new all-time high of its own, [while] the CAC was more energetic, sitting at a one-year-plus peak.
“As has repeatedly been the case of late, the FTSE struggled to keep up.
“Not only is the FTSE missing out on the kind of daily growth seen by its peers, it’s nowhere near the all-time records of the DAX and Dow, or even the one-year highs of the CAC.”
Campbell said it still needed to add around 70 points to clear the spike seen in mid-February.
Earlier in the afternoon, the European Central Bank announced it would hasten its emergency bond-buying programme in a bid to keep bond yields under control.
The central bank to the euro area said in its policy announcement said it would continue its pandemic emergency purchase programme (PEPP) to the tune of 1.85trn until at least March 2022.
“Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year,” the ECB said.
It also elected to keep eurozone interest rates at their current record lows, with the headline rate remaining at 0%.
“Despite some verbal interventions against the sell-off in bond markets, the ECB had not raised its net asset purchases in the last few weeks,” said Berenberg senior European economist Florian Hense.
“Financial markets were thus on the tip of their toes ahead of the ECB meeting.
“The ECB did not disappoint them. Instead, the clearly worded outright commitment to pump up the volume over the next three months was somewhat a dovish surprise.”
Hense said Berenberg and a number of other financial market participants had expected the central bank to simply raise the prospect as a possibility, conditional on a further tightening in financing conditions.
Closer to home, Rolls-Royce managed gains of 0.71% after the engine maker said it expected to turn cash flow positive in the second half of 2021, as it reported a £4bn annual loss inflicted by the pandemic.
The company swung to a £4bn underlying pre-tax loss in the year to the end of December from a £583m profit a year earlier as underlying revenue fell to £11.8bn from £15.5bn.
Spirent Communications gained 6.95% after it reported a rise in full-year profit and declared a special dividend despite “a challenging environment” due to the Covid-19 pandemic.
IG Group rallied 4.87% as the online trading platform said third-quarter revenues surged 65% thanks to “exceptional” levels of trading activity throughout the quarter.
Landscape products company Marshalls surged 7.49% as it posted a decline in full-year profit and revenue as it took a hit from the Covid-19 pandemic, but lifted its expectations for 2021 following a strong start to trading.
The top-flight index’s gains were held back, however, as HSBC shares fell 4.73% and Evraz lost 0.96%, as their stocks traded without entitlement to the dividend.
Morrisons turned negative late in the session to close down 0.99%, after the supermarket chain reported a halving of annual profits, as it was impacted by extra Covid costs, but also declared a special dividend alongside a final payout.
In broker note action, Aviva slipped 1.14% and IWG was off 2.13%, after downgrades to ‘hold’ at Jefferies and Berenberg, respectively.
Market Movers
FTSE 100 (UKX) 6,736.96 0.17%
FTSE 250 (MCX) 21,533.10 0.59%
techMARK (TASX) 4,146.28 1.20%
FTSE 100 – Risers
Flutter Entertainment (FLTR) 15,765.00p 5.50%
Anglo American (AAL) 2,989.50p 4.64%
International Consolidated Airlines Group SA (CDI) (IAG) 211.30p 3.16%
Scottish Mortgage Inv Trust (SMT) 1,168.00p 3.09%
Fresnillo (FRES) 956.60p 2.73%
SSE (SSE) 1,385.00p 2.71%
Antofagasta (ANTO) 1,731.00p 2.55%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,446.00p 2.53%
Smith (DS) (SMDS) 403.20p 2.36%
Rio Tinto (RIO) 5,781.00p 2.34%
FTSE 100 – Fallers
HSBC Holdings (HSBA) 425.65p -4.72%
Persimmon (PSN) 2,986.00p -3.83%
AstraZeneca (AZN) 6,995.00p -2.52%
Standard Chartered (STAN) 484.50p -1.92%
Hikma Pharmaceuticals (HIK) 2,231.00p -1.85%
M&G (MNG) 219.30p -1.62%
BAE Systems (BA.) 493.50p -1.38%
Johnson Matthey (JMAT) 3,160.00p -1.34%
Melrose Industries (MRO) 178.10p -1.30%
Informa (INF) 571.80p -1.28%
FTSE 250 – Risers
CMC Markets (CMCX) 415.00p 8.38%
Marshalls (MSLH) 755.50p 8.24%
Savills (SVS) 1,145.00p 8.12%
Watches of Switzerland Group (WOSG) 674.00p 8.01%
Spirent Communications (SPT) 254.00p 6.95%
Gamesys Group (GYS) 1,540.00p 6.34%
Ferrexpo (FXPO) 357.80p 6.11%
Kainos Group (KNOS) 1,348.00p 5.31%
IG Group Holdings (IGG) 850.50p 4.87%
Babcock International Group (BAB) 253.40p 4.80%
FTSE 250 – Fallers
Helios Towers (HTWS) 158.60p -5.95%
Energean (ENOG) 887.40p -4.67%
Indivior (INDV) 120.00p -3.15%
Playtech (PTEC) 496.30p -2.91%
Ibstock (IBST) 235.60p -2.81%
Elementis (ELM) 124.80p -2.65%
Moneysupermarket.com Group (MONY) 278.20p -2.52%
Airtel Africa (AAF) 79.40p -2.34%
Apax Global Alpha Limited (APAX) 217.00p -2.27%
IWG (IWG) 349.20p -2.13%
