- FTSE 100 rises after hitting lowest since April 17th
- Tobacco stocks lead gains after four-day sell-off
- UK construction output declines
techMARK 2,777.53 +0.27%
FTSE 100 6,684.40 +0.18%
FTSE 250 15,487.07 +0.31%
Equity and bond markets across Europe were calmer on Friday morning after concerns about Portugal's banking sector sparked a sell-off the day before.
The FTSE 100 dropped to its lowest in nearly three months on Thursday on fears of contagion linked to a missed debt payment by the parent company of Banco Espirito Santo (BES), the largest listed lender in Portugal. However, BES attempted to assure investors this morning, saying it has limited exposure to the Espirito Santo holding company.
London's benchmark index was up 0.2% at 6,684 by midday today, led by strong gains in the tobacco sector. A scaling back of risk appetite saw the Footsie fall to 6,672.37 by the close yesterday, its lowest finish since April 17th.
"The four-day sell-off that the markets have been subjected to gives the distinct feeling the FTSE is being oversold and a combination of shorts profit-taking and buy-on-dip traders should see considerably less red on the screens today," said Alastair McCaig, Market Analyst at IG.
Economic data was thin on the ground today, though investors were likely focusing on figures which showed that UK construction output unexpected contracted in May in a sign that economic growth could have lost pace in the second quarter. Output fell by 1.1% month-on-month after rising by 1.2% in April. Economists had expected to see 0.9% growth.
However on positive note, Chris Williamson, Chief Economist at Markit, said the weak figures, along with the disappointing manufacturing output in May, "suggest that policymakers will be encouraged to err on the side of caution about hiking interest rates too early in what looks to be a still-fragile recovery".
M&A lights up tobacco stocks
Shares in Imperial Tobacco rose strongly after the company confirmed it is discussions with US rivals Reynolds American and Lorillard about the potential acquisition of some of their assets and brands. It is thought that Reynolds and Lorillard, the second- and third-largest cigarette makers in the States respectively, are looking to sell assets in a bid to win over competition authorities ahead of their rumoured merger.
The potential deal also gave UK-listed peer British American Tobacco (BAT) a boost today, given that it owns a 42% stake in Reynolds. There had been speculation earlier in the week that BAT could move to buy up the rest of Reynolds after a standstill agreement expires at the end of the month.
Housebuilding and construction-related stocks were performing well with Ashtead, Persimmon, Barratt Developments and Berkeley putting in decent gains.
Heading the other way were the miners with Randgold, Fresnillo, Antofagasta and Anglo American all trading in the red.
Bottling firm Coca-Cola HBC was a high riser this morning after analysts at Goldman Sachs upgraded their rating on the stock to 'buy'. Meanwhile, Dairy Crest was lower after Societe Generale cut its stance on the diary food products group to 'sell'.
FTSE 100 - Risers
Imperial Tobacco Group (IMT) 2,738.00p +2.97%
Coca-Cola HBC AG (CDI) (CCH) 1,351.00p +2.97%
easyJet (EZJ) 1,297.00p +1.97%
Mondi (MNDI) 1,029.00p +1.88%
ITV (ITV) 176.80p +1.78%
Shire Plc (SHP) 4,665.00p +1.41%
Experian (EXPN) 1,016.00p +1.30%
Friends Life Group Limited (FLG) 324.10p +1.22%
BT Group (BT.A) 385.90p +1.15%
Royal Bank of Scotland Group (RBS) 318.50p +1.14%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 5,055.00p -3.44%
Fresnillo (FRES) 925.00p -2.12%
Antofagasta (ANTO) 797.50p -1.79%
Anglo American (AAL) 1,469.50p -1.34%
Morrison (Wm) Supermarkets (MRW) 171.90p -1.09%
Tesco (TSCO) 277.80p -1.03%
Tullow Oil (TLW) 782.00p -1.01%
Rexam (REX) 519.50p -0.95%
Sage Group (SGE) 369.90p -0.83%
Intertek Group (ITRK) 2,677.00p -0.82%
FTSE 250 - Risers
Pace (PIC) 350.40p +4.19%
Alent (ALNT) 351.40p +4.18%
Kier Group (KIE) 1,771.00p +3.27%
NMC Health (NMC) 452.90p +2.70%
Barr (A.G.) (BAG) 627.00p +2.62%
Telecom Plus (TEP) 1,209.00p +2.54%
Renishaw (RSW) 1,611.00p +2.35%
Northgate (NTG) 523.00p +2.35%
Imagination Technologies Group (IMG) 204.10p +2.31%
Senior (SNR) 260.50p +2.24%
FTSE 250 - Fallers
Kazakhmys (KAZ) 314.00p -3.09%
Dairy Crest Group (DCG) 442.50p -2.83%
Centamin (DI) (CEY) 67.60p -2.45%
Vedanta Resources (VED) 1,082.00p -2.35%
Synthomer (SYNT) 213.40p -2.33%
Polymetal International (POLY) 568.00p -2.24%
African Barrick Gold (ABG) 227.40p -2.19%
ICAP (IAP) 351.10p -1.87%
Elementis (ELM) 255.40p -1.50%
Hochschild Mining (HOC) 166.10p -1.42%