London close: FTSE lifted by gains in US, eyes on BoE, retail sales

21st May 2014 16:59

- FTSE closes up 19.04 points at 6,821.04- Retail figures, BoE in focus- April mortgage lending up by more than a thirdtechMARK 2,735.35 +1.07%FTSE 100 6,821.04 +0.28%FTSE 250 15,603.20 +1.06%A rise in stocks on the other side of the Pond helped drive blue chips into positive territory by today's close. The FTSE 100 ended the day up 19.04 points at 6,821.04."A sharp about-turn in US markets has dragged the FTSE 100 higher, although [...] it is sulkily refusing to take part enthusiastically in the rapid return of risk appetite," IG's Chief Market Strategist Brenda Kelly said today."The see-saw action in US markets goes on, as today sees indices bounce back from what seemed like cataclysmic falls yesterday. This type of market action produces much sound and fury, but ultimately signifies little beyond the realisation that the market is unable to make up its mind. Of course, it is Fed minutes day, so all price action should be taken with a pinch of salt."Here in the UK the focus was on retail sales, which came in significantly about expectations with a 1.3% month-on-month rise in April, and by 6.9% when compared to the same period a year earlier, according to the Office for National Statistics (ONS).The consensus estimate had been for an increase of 0.4% on the month (5.1% on the year).March's estimate was also revised higher, to show an increase of 0.5% over the month, instead of the 0.1% gain initially calculated."UK retail sales came in way above expectations on the late Easter and discounting in food from the top supermarkets competing with German rivals Aldi and Lidl causing food sales to rise 3.6% in the month while non-food sales dropped 0.4%," CMC Market's Jasper Lawler said. "This number really isn't what it's cracked up to be on the surface, in a growing economy you wouldn't really want to see discretionary spending contract while spending on basics increases because people are only willing to shop at discount food supermarkets. The small increases seen in investment spending would not be enough to offset a drop in consumer spending and could quite easily hamper the recovery."The impact of the figures was slightly counterbalanced by the latest Bank of England (BoE) minutes, with particular attention being paid to one comment, namely that "for some members, the monetary policy decision was becoming more balanced", which pushed sterling notably higher. Interestingly, a Reuters poll has found that the majority of experts believe BoE Govenor Mark Carney is right to use the Financial Policy Committee to deal with the growth in UK house prices, as opposed to interest rates. That comes after Carney at the weekend said the BoE was considering potential methods of controlling mortgage lending in the face of a shortage of house builds. In other macro news, mortgage lending was revealed to have risen by more than a third in April against a year ago.Gross mortgage advances increased 36% during the month to £16.6bn against the £12.2bn in April last year, monthly data from the Council of Mortgage Lenders showed. The figure was 8% higher than in March and represented the highest total for April since the £25.7bn it reached in 2008.Putin pulls troops back but Ukraine says bilateral talks still 'impossible'In the latest out from Eastern Europe, Russian troops have been ordered back to base in order to avoid speculation about their influence on looming elections in Ukraine on May 25th.President Vladimir Putin, quoted by Russia's RIA Novosti agency, said: "Our troops are no longer on the border, a while back I gave the command to deploy them to their permanent bases, now the Defense Ministry has received the order to pull them out of there."Putin said the decision to pull the troops away from the border was made to help facilitate "decent conditions for the elections" and avoiding "speculations".AstraZeneca rises on broker upgrade, hopes for revival of Pfizer bid AstraZeneca climbed after UBS raised its target price from 4,825p to 5,000p maintaining its 'buy' recommendation.IG's Kelly said: "AstraZeneca shares continue to be the prime mover in the market, rebounding today thanks to renewed talk that the Pfizer bid might not be dead. But with just five days to go until it must give up on the bid, it seems unlikely that Pfizer will return to the fray for another try while AstraZeneca's board is striking down bids out of hand. Far better to wait and let discontent build among shareholders, then take advantage in six months time."Petrofac climbed after Barclays raised its recommendation for the UK's largest oil and gas engineer. An increase in oil prices also boosted the sector with both Brent and West Texas Intermediate crude futures higher. Meanwhile, Morrison was in the bottom spot after Deutsche Bank lowered its target price from 200p to 190p downgrading to 'sell'. The broker said a rise in the British supermarket group's shares was unwarranted and a 275p takeover bid was unlikely.Copper giant Antofagasta faces a "more challenging short-term environment', the group told investors at its annual general meeting today. Chairman Jean-Paul Luksic said that following a 'difficult' 12 months in 2013, the group was now in a period of consolidation, but said the fundamentals for copper in the medium-term remained strong. On the second tier, Telecom Plus topped risers today after impressing with an increase in annual profit and revenue as the utility achieved a record increase in customer numbers.At the other end, Intermediate Capital plunged after it revealed a 25% decline in its loan book and a 13% fall in the profitability of its asset management arm. Numis Securities cut its target price for the stock and highlighed how the business only generates returns to shareholders of 9%, despite having leveraged exposure to assets that typically yield between 10-15%. The broker cut its forecasts for earnings per share for this year and next to 36.2p (from 41.8p) and 38.9 (from 44.1p), respectively.FTSE 100 - RisersSports Direct International (SPD) 751.00p +3.73%AstraZeneca (AZN) 4,420.00p +2.59%William Hill (WMH) 334.40p +2.58%Ashtead Group (AHT) 850.00p +2.41%Petrofac Ltd. (PFC) 1,220.00p +2.18%Hargreaves Lansdown (HL.) 1,179.00p +2.17%GKN (GKN) 383.00p +2.00%Whitbread (WTB) 4,072.00p +1.98%ARM Holdings (ARM) 861.00p +1.89%St James's Place (STJ) 767.00p +1.79%FTSE 100 - FallersMorrison (Wm) Supermarkets (MRW) 205.00p -2.15%Pearson (PSON) 1,132.00p -2.08%easyJet (EZJ) 1,550.00p -1.90%Antofagasta (ANTO) 771.00p -1.60%Associated British Foods (ABF) 3,023.00p -1.53%HSBC Holdings (HSBA) 618.50p -1.37%Intertek Group (ITRK) 2,891.00p -1.20%Compass Group (CPG) 986.00p -0.75%Tesco (TSCO) 303.80p -0.74%BG Group (BG.) 1,261.50p -0.71%FTSE 250 - RisersTelecom Plus (TEP) 1,519.00p +10.88%RPS Group (RPS) 295.30p +8.37%Britvic (BVIC) 749.00p +7.85%ITE Group (ITE) 236.60p +7.79%DCC (DCC) 3,340.00p +7.57%Greencore Group (GNC) 278.00p +7.34%Lonmin (LMI) 251.20p +6.44%Dixons Retail (DXNS) 46.01p +4.57%Bwin.party Digital Entertainment (BPTY) 119.10p +4.38%Merlin Entertainments (MERL) 347.50p +4.20%FTSE 250 - FallersIntermediate Capital Group (ICP) 400.00p -3.22%Redefine International (RDI) 55.30p -2.47%Big Yellow Group (BYG) 490.00p -2.39%Domino Printing Sciences (DNO) 744.00p -1.85%Polymetal International (POLY) 543.00p -1.81%Paragon Group Of Companies (PAG) 376.90p -1.75%Inmarsat (ISAT) 711.50p -1.39%HICL Infrastructure Company Ltd (HICL) 137.00p -1.23%Infinis Energy (INFI) 202.70p -1.12%Foxtons Group (FOXT) 301.70p -1.05%NR