Market steps back up despite ‘uncertainty’

THE London market stepped up after the Bank of England said the UK showed “no clear signs” of a sharp economic slowdown following the Brexit vote.

The FTSE 100 Index closed above the 6,700 mark, up 31.62 points to 6728.99, after a report by the Bank’s agents said there was little sign of employment and investment being hit in the short term by Britain’s exit from the European Union, but added that uncertainty had “risen markedly”.

The rise on London’s top flight came as sterling regained some ground thanks to a strong set of employment figures for the UK.

The pound was 0.5% higher against the dollar at 1.317 US dollars following another fall in unemployment.

The employment rate reached a record high of 74.4%, with 31.7 million people in work in the three months to May – 176,000 more than the previous quarter.

A total of 1.65 million people are unemployed, a fall of 54,000 over the quarter, giving a jobless rate of 4.9%.

But the claimant count, including those on Jobseeker’s Allowance, increased by 400 last month to 759,100, the fourth consecutive monthly rise.

The pound also rose against the euro, up 0.6% to 1.196 euros.

European markets were enjoying a strong session, with Germany’s Dax surging 1.6% and the Cac 40 in France lifting 1.1%.

The price of oil was up 0.8% to 47.05 US dollars a barrel after the American government reported declines in crude inventory.

In stocks, financial firms and housebuilders made gains after taking a battering in the aftermath of the referendum result.

Standard Chartered was up 2% or 15.7p to 617.5p and Charles Church builder Persimmon rallied 39p higher to 1650p. However, miners were left languishing in the red after Anglo American slashed its guidance for copper and iron ore output in an update for the second quarter.

The London-listed firm was at the top of the biggest fallers, with shares down 4% or 39.2p to 774.4p, while Glencore slipped 3.7p to 176.2p.

Away from the top tier, Talk Talk slid 3% or 6.7p to 216p after saying its broadband customer base remains 9,000 lower despite halting the exodus from the firm following last year’s cyber attack.

The FTSE 250 company said revenues held largely firm, edging 0.4% lower in its first quarter.

Travel stocks were under pressure after budget airline Wizz Air became the latest firm to reveal a blow from the Brexit-hit pound as it cut plans to expand flights from Britain.

The Eastern and Central European carrier, which is listed in London, had aimed to boost its routes from the UK with more services, but said it would now halve these growth plans due to the recent plunge in the value of the pound.

Shares in Wizz Air were down 18p to 1525p, while British Airways-owner IAG slipped 2.8p to 420.7p.

The biggest risers on the FTSE 100 Index were St James’s Place up 39p to 898p, Legal & General up 5.9p to 197.3p, Sage Group up 20.5p to 697p, Admiral Group up 58p to 2103p. The biggest fallers were Anglo American down 39.2p to 774.4p, Fresnillo down 58p to 1819p, Randgold Resources down 230p to 8710p, BHP Billiton down 22.1p to 926.4p.

NEW YORK

UPBEAT company earnings lifted US and European stock prices yesterday, with the Dow and S&P

500 setting record highs, while the dollar reached a four-month peak on bets the US Federal Reserve may raise interest rates by year-end.

The impressive run in major equity markets around the globe led investors to reduce their safe-haven positions in US and German government debt, sending their yields higher.

Oil prices recovered from a two-month low after US data showed a further drawdown in crude inventories, reducing worries about a domestic supply glut.

The Dow Jones industrial average unofficially closed up 36.02 points, or 0.19 per cent, at 18,595.03, the S&P 500 ended up 9.24 points, or 0.43 per cent, at 2,173.02 and the Nasdaq Composite finished 53.56 points, or 1.06 per cent, higher at 5,089.93. The Dow and S&P 500 reached intraday record highs at 18,622.01 and 2,175.63, respectively, while Nasdaq touched its highest since December 30. Microsoft and Morgan Stanley were the latest US companies whose quarterly results topped analyst estimates. Microsoft shares rose 5.3 per cent while Morgan Stanley stock gained 2.1 per cent.

The dollar hit its strongest level in four months against a basket of currencies as lofty stock prices and encouraging economic data revived wagers the Fed would raise interest rates later this year.

The dollar index was last up fractionally at 97.095, trimming its earlier modest gains.