Footsie gains ahead of US rate decision

Market report Perry Gourley

The London market edged into positive territory as investors remained cautious over Brexit and braced themselves for a potential interest rate hike from the US Federal Reserve.

The FTSE 100 index closed up 10.79 points at 7,368.64, with Fed chairwoman Janet Yellen expected to push up the cost of borrowing for only the third time since the financial crisis, increasing it by a quarter of a percentage point to 1.25 per cent.

Despite a subdued day’s trading, energy stocks gave the top-flight some uplift thanks to a rebound in the price of Brent crude. Jasper Lawler, senior market analyst of London Capital Group, said the oil price rise had helped boost the UK’S premier index, as European markets also paused ahead of the Dutch elections result.

“A ‘dead cat bounce’ in the price of oil after a string of sharp daily declines came to the aid of stock markets with energy the top rising sector,” he said.

“Having sold off during earnings season when oil prices were flat, energy stocks have outshone the underlying commodity in the recent decline.”

Lloyds Banking Group rose 0.4p to 68.2p following the announcement that the government had sold off another slice of its shareholding.

UK Financial Investments, which manages the stake in Lloyds, cut its holding by around 1 per cent to 2.95 per cent, seeing the bank edge another step closer to full private ownership.

Hikma Pharmaceuticals was at the summit of the biggest risers, as the firm hiked up its 2016 dividend by 3 per cent despite flagging revenues and profits. Shares were up 171p to 2,297p The landscaping products firm revealed that pretax profits surged by 31 per cent to £46m in its last financial year on the back of strong margins. The energy firm said it had agreed a £1.1m capital raising by issuing shares to fund development work at its Cambay oil field in India.