FTSE at record high after Carney hurts the pound
THE FTSE 100 ended the day at a record high of 7560.35 points amid strong services sector figures and a fall in the pound after Thursday’s Bank of England announcement.
One day after the Old Lady raised interest rates, the market pushed past its previous record high of 7556 points on October 12, continuing an upward trend since mid-September.
The best economic news came from the services sector.
October’s purchasing managers’ index reading came in at 55.6, up from 53.6, when it had been forecast by economists to edge downward by a fraction.
Activity in the services industry, which accounts for around 80pc of UK economic output, rose at its fastest pace since April.
The FTSE also got a lift from equipment rental firm Ashtead
Group, which rose 2.2pc, or 43p, to 1977p as analysts talked up its prospects in the US if President Trump fulfils his promise to cut corporate taxes.
Analysts at Stifel, Investec and Citi Group this week all published ‘buy’ ratings on the firm, estimating US tax changes could boost earnings by more than 15pc. Investec noted the firm’s operations in the US were on track to be making £4.2bn by 2021.
One of the day’s biggest risers was UAE-based hospitals chain
NMC Health, up 4.3pc, or 127p, to 3089p, on the back of a price upgrade from Deutsche Bank.
Coca- Cola HBC was another star, up 2.7pc, or 70p, to 2638p. Design and engineering group
Avon Rubber was up 2.5pc, or 25.5p, to 1025p, as it revealed it had been picked as the preferred bidder to supply more respiratory masks to the Ministry of Defence.
Investors sold shares in British Airways owner IAG Group as it upped its revenue guidance. It said it hoped to be raking in £5.7bn each year between 2018 and 2022, compared to previous annual earnings goals of £4.7bn between 2016 and 2022.
The airlines group also upped its targets on capacity growth and capital spending, having last Friday said it expected profits to grow by nearly 20pc this year.
But the group, which also owns Iberia, Aer Lingus and Vueling, stuck to its 15pc target for return on invested capital, which one analyst said was disappointing.
During the summer the group posted bumper profits of £871m for the first six months of 2017 – despite a disastrous IT failure. Yesterday shares fell 1.5pc, or 9.5p, to 621.5p.
Smith & Nephew weighed on the markets as the hip and knee maker said hurricanes in the US had blown a £3.8m hole in its revenue. Reportedly being stalked by activist investor Elliott, which is pushing for a break-up, the firm made around £879m during the third quarter. Chief executive Olivier Bohuon insisted he was not thinking about asset disposal but refused to comment on speculation about Elliott.
Berenberg analysts, who have a ‘hold’ rating on the stock, said the results were in line with fairly low expectations. Shares rose 2.1pc, or 29p, to 1412p.
Investors fled South Africafocused platinum metals miner
Lonmin as it delayed its financial results saying an ongoing business review demanded management’s undivided attention.
The London and Johannesburg listed miner is reviewing the business to address uncertainties about its ability to continue as a going concern, with asset sales under consideration.
Although production is strong, the firm has been battling low – albeit recovering – platinum prices. It reported a 3.6pc increase in platinum sales over the fourth quarter, but said the average price had dropped 8.7pc and unit costs had risen 4.3pc. Shares fell 30.9pc, or 32.35p, to 72p.