UPDATE 2-FTSE 100 up as miners, banks rally; easyJet warning tugs airlines

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* FTSE 100 up 0.5 pct, FTSE 250 up 0.6 pct

* EasyJet slumps on weak trading update

* IAG, Ryanair, Wizz Air all fall in response

* Miners, banks top boosts to main index
(Adds company news items, updates to closing prices)

By Muvija M

April 1 (Reuters) – Gains in miners and banks propelled
London’s main bourse higher on Monday, as sentiment picked up
after surprisingly upbeat data from China and progress in
U.S.-China trade talks, while easyJet’s bleak forecast triggered
a sell-off in airline stocks.

The FTSE 100 ended 0.5 percent higher after rallying
as much as 1 percent with gains capped due to investors shunning
defensive stocks, and the midcaps added 0.6 percent.

UK markets joined a global rally sparked by data showing
Chinese factory activity grew for the first time in four months
in March, as well as hopes of a resolution to a prolonged trade
dispute between Washington and Beijing.

Also driving sentiment was a survey that showed UK
manufacturing growth at an unexpected 13-month high last month
as the country stockpiles for Brexit.

Miners jumped 2.5 percent to a 10-month high as
base metals prices rose, including nickel after data suggested
stimulus measures in China, the world’s biggest nickel consumer,
were boosting the economy.

Trade progress and reassurance about the Chinese economy
also helped Asia-exposed stocks such as HSBC and
StanChart.

“The trade deal is going very well,” U.S. President Donald
Trump said on Friday, with talks between the world’s two largest
economies set to resume this week.

The Brexit conundrum continued, with parliament set to vote
on different options, and sterling firmed on hopes that the
uncertainty will end in a softer Brexit than Prime Minister
Theresa May’s defeated withdrawal agreement.

The default remains for the UK to fall out of the European
Union without a deal on April 12.

CAUTIOUS TONE

All but two sectors in the FTSE 100 were in positive
territory, with easyJet’s weak trading update the
biggest negative.

WPP, the world’s biggest advertising group, added 3
percent on its best day in a month after a Deutsche Bank rating
upgrade.

EasyJet, by contrast, suffered a 10 percent slump on
its worst day in nearly three years after it flagged soft ticket
pricing, partly due to Brexit uncertainties.

EasyJet’s cautious tone brought down shares in British
Airways-owner IAG, Wizz Air and the
London-listed shares of Ryanair by between 2 and 4.3
percent.

Defensive stocks, which are deemed safer at times of
uncertainty, underperformed. British American Tobacco
and Imperial Brands were among the worst fallers, while
United Utilities, SSE and National Grid
also weakened.

Among midcaps, iron ore pellet producer Ferrexpo
jumped 6.3 percent as higher iron ore prices took precedence
over the company delaying annual results again, with charity
investigation continuing.

Babcock edged 3 percent higher after a media report
that Rolls-Royce director and former Shell
executive Ruth Cairnie would take over as chairman of the
defence contractor.
(Reporting by Yadarisa Shabong and Muvija M, Editing by David
Holmes and Ed Osmond)

(c) Copyright Thomson Reuters 2019. Click For Restrictions – https://agency.reuters.com/en/copyright.html





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