Positive mood in US provides market boost
EUROPEAN shares moved a leg higher yesterday as positive sentiment in the US acted as a tonic to investor confidence, driving the FTSE 100 into positive territory.
London’s premier index ended the day up 76.6 points, or 1.09 per cent, at 7,117.28.
It followed a mixed set of US midterm election results, which saw the Republicans lose control of the House of Representatives but keep control of the Senate.
David Madden, market analyst at CMC, said: “Stock markets are higher as the positive sentiment in the US has boosted investor confidence on this side of the Atlantic. The rally on the back of the mid-terms acts as a nice continuation to the bounce back that started last month.”
However, he cautioned: “The politics of the US acts as a nice distraction today, but it doesn’t change that fact that investors are still concerned about the budget situation in Italy and the US-China trade spat.”
In stocks, ITV ended the day bottom of the index after the broadcaster said advertising revenues were coming under pressure amid economic uncertainty as Brexit worries take their toll ( see Page 7).
Shares ended the day 4.25p down at 150p on the gloomier ad outlook.
Marks & Spencer shares also took a hit after the high street titan warned of a bleak outlook for sales
0.3 Percentage rise in the value of the
pound versus the US dollar
growth as it reported a decline in half-year revenue. The retailer surprised the market with a higher profit figure, but revenue dropped by 3.1 per cent to £4.96 billion, reflecting declining sales in both the food and clothing and home divisions.
M&S said it did not expect much improvement in sales in the near future as it dealt with “the growth of online competition and the march of the discounters”. The company’s stock closed down 1.6p at 300.9p.
The pound was in buoyant mood, gaining 0.3 per cent versus the US dollar at 1.314. Against the euro, sterling was flat at 1.146.
But Mr Madden said the gains were linked to a weaker dollar rather than any Brexit breakthrough.
“As per usual, Brexit chatter continues to do the rounds, but we are still none the wiser about the situation,” he said. “The pound has firmly moved beyond the 1.3000 mark, but it might find its gains will be limited as uncertainty lingers.”
A barrel of Brent crude was trading at 72 US dollars, up 0.7 per cent.
The biggest risers on the FTSE 100 were NMC health up 144p at 3,500p, Associated British Food up 105p at 2,565p, Melrose Industries up 6.5p at 174p and Fresnillo up 319p at 902p. The biggest fallers were ITV down 4.25p at 150p, Royal Mail down 5p at 348p, Direct Line down 4.1p at 318.6p and GVC down 8.5p at 883p.