Apple and China outlook give index strong gains

THE FTSE 100 enjoyed a day of strong gains yesterday as it was boosted by earnings from Apple and positive sentiment surrounding the Chinese economy.

London’s top flight index closed up 107.7 points, or 1.58 per cent, at 6,941.63.

“European bourses broadly moved higher. Markets breathed a sigh of relief over Apple’s results and encouraging China related news, which overshadowed rekindled Brexit nerves,” said Fiona Cincotta, senior market analyst at City Index.

In stocks, shares in London Stock Exchange Group ended higher after it picked up a near 5% stake in settlement house Euroclear for €278.5 million (£241.9m), as the bourse looks to expand its influence across the continent.

Belgian- based Euroclear provides settlement, custody and collateral management services across Europe and has more than € 28.2 trillion (£24.5tn) assets under custody.

The deal comes just two months before Brexit, which threatens to take business away from the LSE.

LSE shares closed up 60p at 4,590p.

Shares in CYBG slipped as the Clydesdale Bank and Yorkshire Bank owner suffered an investor backlash over bonuses for top bosses after more than one-third of voted shares went against its executive pay plans.

The group – which recently snapped up Virgin Money for £1.7 billion – said 34.2% of investor votes were made against its pay plans at its annual general meeting in Melbourne, Australia.

The rebellion comes after CYBG revealed plans to boost payouts and bonuses for chief executive David Duffy and chief financial officer Ian Smith. Shares closed down 1p at 183.9p

The pound was licking its wounds after falling late on Tuesday after another Brexit farce in Parliament, where Theresa May backed an amendment that rejected her own Brexit deal.

Sterling was flat versus the US dollar and euro at 1.306 and 1.144 respectively.

Lukman Otunuga, research analyst at FXTMM, said: “With less than two months until the official Brexit divorce date and Brussels warning the backstop is ‘not open for renegotiation’, the odds of an extension to Article 50 are rising.

“While this scenario has the potential to support the pound as investors completely discount fears of a no-deal Brexit, the continued uncertainty will most likely cloud the currency’s medium- to longer- term outlook.”

Across Europe, Germany’s DAX was down 0.33% and France’s CAC rose 0.95%.

A barrel of Brent crude was trading at $62.5, a rise of 2%.

The biggest risers on the FTSE 100 were British American Tobacco up 122p at 2,632p, Melrose up 6.75p at 170.45p, DS Smith up 13.7p at 348.1p and Hikma up 61p at 1,590p.

The biggest fallers on the FTSE 100 were Hargreaves Lansdown down 44p at 1,640.5p, Hiscox down 11p at 1,430p, Auto Trader down 2.4p at 452p and Centrica down 0.6p at 137.45p.

NEW YORK

US stocks surged yesterday after the Federal Reserve said it would be patient in lifting borrowing costs this year, reassuring investors worried about a slowing economy.

Along with better-than-feared quarterly results from Apple Inc, the Fed’s comments helped Wall Street reverse two down days triggered by profit warnings from bellwethers that signalled a bigger impact from a slowdown in China.

The central bank held interest rates steady, as widely expected.

While the Fed said continued economic and job growth were still “the most likely outcomes,” it removed language from its December policy statement that risks to the outlook were “roughly balanced” and struck language that projected “some further” rate hikes would be appropriate in 2019.

Investors in recent months have become more concerned about the global economy. U.S. corporate results have shown companies including Apple, Intel Corp and Caterpillar Inc are feeling pain from the slowing expansion of China’s economy.

Apple shares jumped 6.83 per cent after the company reported a sharp growth in services business.

Boeing Co gained 6.25% after the world’s largest plane-maker forecast full-year profit and cash flow above analysts’ estimates .

The Dow Jones rose 1.77% to 25,014.86 points, the S&P 500 gained 1.55% to 2,681.05 and The Nasdaq Composite surged 2.2% to 7,183.08.