FTSE 100 closes up, boosted by miners and the pound – Proactive Investors UK

The footsie closed up over 64 points at 7,674 on the day and was around 1.15% up on the week

FTSE 100 index closed firmly higher on Friday as resource stocks and a weaker pound helped boost the mainly dollar-earning constituents of the benchmark index.

The footsie closed up over 64 points at 7,674 on the day and was around 1.15% up on the week.

The midcap FTSE 250 index finished the day over 164 points higher, at 21,886.

"The FTSE 100 has seen a sharp surge as we close out the week, with the growing prospect of a rate rise from the BoE helping drive the pound lower," noted Joshua Mahony, at London-based online trading group IG.

"Rounding off a week which has seen rate cut expectations soar, the release of a hugely disappointing retail sales number for December provided yet another reason to expect action from Carney and co."

Earlier, the Office for National Statistics revealed that sales fell by 0.6% in December compared to November - the fifth month in a row without growth. It topped off a week, which also showed UK GDP (gross domestic product) unexpectedly contracting in November and inflation hitting a three-year low.

Meanwhile, big cap miners helped boost FTSE today, with the US-China trade deal ramping up hopes of a resurgence after an uncertain period, also noted Mahony. BHP Billiton () added 2.3%, while Rio Tinto Ltd () added 1.78%.

"The push towards an environment with less tariff and more global trade can only be a good thing for commodities, with China showing signs it is ending a multiyear slide in economic data."

In the US, the Dow Jones Industrial Average added over 30 points at 29,327. The S&P 500 index gained nearly seven points and the tech-laden Nasdaq added 1.46 points.

US markets opened higher following a mini-spate of economic indicators being released.

The Dow Jones average was up 58 points (0.2%) at 29,356 and the S&P 500 was 6 points (0.2%) heavier at 3,323

Housing starts in the US in December jumped 16.9% to 1.61mln (annualised), which was well above the consensus forecast of 1.38mln; in contrast, the number of building permits issued fell 3.9% to 1.42mln, versus a consensus forecast of 1.46mln.

A 30% leap in multi-family starts, to a 33-year high, propelled the headline starts number, but single-family starts were strong too, up 11%. The much warmer-than-usual December weather likely boosted activity, but these are nonetheless very startling numbers, which will lift forecasts for Q4 residential investment, said Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

Berenberg Capital Markets noted that the improvement in housing starts in December was broad-based.

We have always been optimistic on the prospects for the housing sector and have long maintained that there is plenty room for improvement. While this seasonally-adjusted number for December was likely boosted by unseasonably warm weather so that the coming months data likely will give back some of the gain, we expect housing starts to be solid in 2020, averaging an impressive ~1.4mn compared to 1.3mn in 2019,the bank added.

US industrial production fell 0.3% in December; economists had pencilled in a fall of 0.2%.

In the UK, the FTSE 100 index looks to have sloped off early for the weekend and left a wax model in its place. The index was up 70 points (0.9%) at 7,680, not far from the level where it has been most of the afternoon.

After a solid morning of progress, the Footsie has moved into consolidation mode.

Londons index of leading shares was up 70 points (0.9%) at 7,680, some 10 points below its intra-day high.

The mid-cap FTSE 250, up 154 points (0.7%) at 21,875, was doing almost as well, led by pork products maker (), which was up 9.2% after it upgraded profits guidance.

Car insurer () had a prang after it updated the market, however; the shares shed 5.6% at 174.9p following a profit warning.

At its heart insurance is quite a simple business, the aim being to secure more in premiums than you pay out in claims, and it is a surge in claims that is behind the profit warning and dividend cut from motor and home insurer Hastings today, explained s Russ Mould.

A big challenge for the company is that motor insurance is a very competitive market and therefore, despite its best efforts to remain disciplined on pricing, it is very hard for premiums to keep pace with claims inflation. Regulatory changes havent helped either, he added.

Its another day and it looks like another new high for US indices as the US-China trade deal continues to underpin sentiment.

Spread betting quotes indicated the Dow Jones average, after surging 267 points yesterday, will add another 54 points or at 29,352 when it opens this afternoon.

The S&P 500, which jumped 28 points yesterday to finish at 3,317, is seen starting at around 3,317.

The FTSE 100, which has operated all week in the shadow of the record-breaking US indices, is at least putting on a decent show at the end of the week and is up 74 points (1.0%) at 7,684.

Tool hire firm PLC (), London-listed but very much dependent on the US economy, rode the Transatlantic wave, rising 4% to 2,525p after moved to overweight from equal-weight.

In other broker action, upgraded both Company PLC () and Group PLC () to buy from neutral. The former was up 1.2% and the latter up 1.9% at 983.6p.

PLC () jumped 1.3% after Goldmans moved to a neutral position, having previously recommended selling the shares.

Oil stocks were underperforming the market despite the price of Brent crude heading higher on futures markets.

While the FTSE 100 was up 0.9% (69 points) at 7,678, integrated oil giants () and () were off the pace, with a gain of 0.3% and a fall of 0.1% respectively.

Brent crude rebounded almost 1% yesterday (16 January) to US$64.62/bl and continues to tick a little higher this morning, but still below the US$65/bl mark. The signing of the USChina trade deal has given optimism for a revival in global manufacturing and stronger oil demand growth, giving the oil price some vigour, suggested Bjarne Schieldrop, the chief commodities analyst at Nordic corporate bank, SEB.

It is very hard for OPEC to fight a war on two fronts with both rising non-OPEC supply and weakening global oil demand growth. A potential revival in global manufacturing (and oil demand growth) would be a great relief for OPEC and remove a lot of downside price risk. The oil prices current level is at the mercy of OPEC and its current strategy of price over volume. If global oil demand continues at 2019s weaker-than-normal 1% growth rate in 2020 and 2021, OPEC and its allies might be forced to switch strategy to volume over price once again, Schiedrop suggested.

Sticking with the oil sector, () dipped 1.7% to seven-eighths of a penny after it revealed it Eridge Capital wants to remove chief executive officer Matt Lofgran from the board.

Hopes of a base rate cut soon in the UK and some decent macro data from China overnight has got Londons blue-chips rising.

The FTSE 100 was up 62 points (0.8%) at 7,672, helped by a flagging pound, which is close to half a cent lower against the US dollar as forex traders bet on the cutting its key lending rate at its meeting at the end of the month a move that would make sterling-denominated deposits less attractive to investors.

China released some broadly positive economic reports, which has boosted sentiment around the globe. The industrial output and fixed asset investment levels were 8% and 5.4% respectively, both showed improvements on the previous reports as well as topping forecasts. Retail sales held steady at 8%, exceeding the consensus estimate. On an annual basis the economy grew by 6%, meeting forecasts. The largely positive data ties in nicely with the signing of the US-China trade deal during the week, remarked David Madden at CMC Markets.

Meanwhile, economists are still reeling from this morningss UK retail sales figures.

Retail sales volumes fell 1.0% quarter-on-quarter in the fourth quarter, which was the weakest performance since the first quarter of 2017. The ONS indicated that this would make a negative contribution of 0.05 percentage point to UK GDP in the fourth quarter, thereby increasing the risk that the economy contracted slightly, reported Howard Archer, the chief economist at the EY ITEM Club.

There had been speculation that the November performance had been adversely affected by the relatively late Black Friday, despite the ONS attempts to allow for this (it occurred on 29 November while the ONS reporting period for November retail sales was 27 October 23 November) and that this would be reflected in a bounce-back in December but this was clearly not the case and consumers were clearly very reluctant to spend over the crucial Christmas, Archer declared.

It remains to be seen what impact Decembers decisive General Election result and now certain UK exit from the EU on 31 January with Boris Johnson's deal has on consumer behaviour. There are signs that there was at least an initial lift to confidence with a Barclaycard survey showing a marked rise, he noted.

Following the underwhelming UK retail sales numbers for December pundits are speculating whether a base rate cut is now on the cards.

The FTSE 100 has perked up, advancing to 7,658 up 48 points (0.6%) - suggesting that the market is moving to the view that the will get out the paring knife at the next meeting of the Monetary Policy Committee (MPC).

Pantheon Macroeconomics said the December retail sales figures were shockingly weak, leaving the MPCs January meeting now finely balanced.

Decembers fall in retail sales volumes comes as a major shock and suggests that consumers retrenched severely at the end of last year amid heightened political uncertainty. Five months now have passed without a month-to-month increase in sales, the longest spell without growth since record begin in 1970, Pantheons chief UK economist, Samuel Tombs, said.

The 1.0% quarter-on-quarter decline in sales volumes in Q4 is the worst result since Q1 2017. We had thought that seasonal adjustment issues relating to the later-than-usual timing of Black Friday were to blame for Novembers fall and that sales would rebound in December; these data clearly rebut our theory, he admitted.

Revisions might brighten the picture eventually, but in the near-term, these data undoubtedly strengthen the case for the MPC to cut Bank Rate on January 30. That said, the December general election has led to a dramatic reduction in political uncertainty, and we can see from labour market and money supply data that households disposable incomes continued to increase at a solid pace in Q4, he added.

Holger Schmieding, the chief economist at Berenberg Bank, made the case for a rate cut. In a low-interest-rate environment, central banks should err on the side of caution when downside risks emerge. With more power to lower inflation than to raise it, monetary policymakers might be inclined to overreact with too much stimulus and, if needed, hike rates later to correct course, Schmieding said.

Being an economist, however, he also made the case for standing pat.

The big win for Boris Johnson and the Conservative Party on 12 December and the recent phase one US-China trade deal have drastically reduced uncertainty and the downside risks to the outlook. Key surveys taken after the election, such as the CFO survey and the RICS residential market survey, show a sharp bounce in confidence and expected economic activity, he noted.

All of which brings to mind the quote of former US president, Harry Truman.

Give me a one-handed Economist. All my economists say 'on hand...', then 'but on the other ...

Turning to corporate news, () and () are vying to sit atop the Footsie leader-board.

The latter is currently winning the battle, with a 5.6% gain versus a 5.5% advance for NMC.

British Airways owner IAG ascended to the top of the leader-board are scrapping its self-imposed cap on the number of shares non-EU shareholders could own in the company.

As for NMC, the hospitals owner that operates in the Gulf Cooperation Council states, it has evidently made a good choice in the appointment of a firm to conduct an independent assessment of the charges made against it by the hedge fund Muddy Waters.

Tt has retained Louis Freeh, a former federal judge and FBI director, and his firm Freeh Group International Solutions, to poke around and see if there is any merit in the assertion made by Muddy Waters.

UK retail sales volumes fell by 0.6% in December, the Office for National Statistics (ONS) revealed.

The quantity bought in food stores fell by 1.3%, which was the largest fall since December 2016, also at 1.3%.

Online sales as a proportion of all retailing was 19.0% in December 2019, compared with the 18.6% reported in November 2019.

In the three months to December 2019, both the amount spent and the quantity bought in the retail industry, fell by 0.9% and 1.0% respectively when compared with the previous three months.

"The longer-term picture is still one of growth, although it has slowed considerably in recent months," according to ONS statistician, Rhian Murphy.

The FTSE 100 was up 28 points (0.4%) at 7,638 after the in-line retail sales figures.

Supermarket stocks shrugged off the dismal data relating to food stores; Wm Morrison Supermarkets PLC () was the sectors top performer, up 1.1%, followed by (), up 0.8%; () was up 0.6%.

The FTSE 100 index made a positive start on a quiet day for corporate news, receiving a leg up from Wall Street, which once again ended in record territory.

The index of UK blue-chips opened 37 points to the good at 7,646.91 ahead of UK retail sales figures later that are expected to reveal rather anaemic growth on the High Street and in shopping centres.

Broker comment provided the main corporate interest. got busy in the property sector upgrading to buy from neutral stock in (), Big Yellow () and (), lifting the share prices respectively by 1.5%, 2.6% and 1.1%.

s upgrade to overweight of Ashtead () boosted the value of the US-focused plant hire group 3.3% early on.

On the news front, NMC Health (), laid low by a bear raid, sprang back 5% early on as itappointed a former US federal judge to look into allegations made against the company.

But a cautious trading update from care insurer Hastings Group (), wiped 9% from the value of the business and led to a 3.3% fall in Footsie rival Admiral ().

() said it was mulling a stock market listing on NASDAQ as it provided revenue guidance for its last financial year and said it hoped to reach profitability in 2020. It has tasked adviser goetzpartners securities to assess the potential of a dual UK-US quote. Given high investor and consumer interest in the microbiome in the USA and growing sales the board OptiBiotix has commissioned advisors to explore the potential of a dual NASDAQ listing," said chief executive Stephen OHara.

() has told investors that it expects to finalise power tariffnegotiations in the first half of 2020 for the integrated Ncondezi coal-fired power project and coal mine in Tete, Mozambique. "The process to finalise a tariff offer for submission to EDM is well underway and on track for submission in Q1 2020, said Hanno Pengilly, Ncondezi's chief executive in a statement. The company continues to work closely with its strategic partners and tariff financial advisor to achieve a competitive firm tariff offer in line with the latest agreed tariff rates in Mozambique, he added.

() is targeting an expansion of its BRICKLIVE brand in 2020 as it kicked off the year with higher contracted revenues. The media firm said in a trading update for the year ended 31 December that it has secured 3mln in recognised revenues for the coming year, over 50% higher than 2019, while it is also aiming to build up to 16 BRICKLIVE themed tours before the end of 2020.

() and Nouryon have agreed to terminate their agreement for Nouryon to exclusively distribute Itaconix polymers with chelating properties worldwide for detergent applications. The parties signed a supply agreement in January 2019 after conducting encouraging joint technical assessments of Itaconix's polymers in detergent applications. An initial marketing trial by Nouryon indicated, however, that the agreement was not mutually attractive for accessing available customer opportunities, Itaconix said.

Landore Resources Limited () has appointed Glenn Featherby as a non-executive director with immediate effect. The group pointed out that Featherby has over 35 years' experience in corporate advisory work, and an extensive background in the resources sector, having begun his career with KPMG in Perth and London, before establishing his own accounting practice in Perth in 1997. It noted that he has previously served as a non-executive director of and as non-executive chairman of Forte Energy NL.

(), the technology commercialisation company focused solely on cyber security and risk, said it has received a notice exercising options to acquire 13,333 ordinary shares in the company at a price of 280p each.

The FTSE 100 index looks set to start higher on Friday with US markets continuing to break more records than a clumsy disc jockey.

The UK benchmark, which fell 33 points to close at 7,610 yesterday, is expected to head higher at the outset, ahead of Decembers UK retail sales figures, with spread betters calling the index to open at around 7,623, up 13 points.

Pantheon Macroeconomics is above the market consensus in expecting a 1.5% month-on-month increase in retail sales volumes; the consensus forecast is for a 0.6% increase.

We don't buy the popular narrative that the 0.6% month-to-month fall in retail sales volumes in Novemberthe fourth consecutive month without growthwas due to heightened Brexit concerns, the forecasting unit explained.

Volumes rose by 1.5% quarter-on-quarter in Q1, when concerns about a no-deal Brexit peaked. In Q4, consumers' confidence was only slightly below its long-run average. Money supply data indicate that growth in households' real disposable incomes picked up in the second half of last year, it added.

If Pantheon is correct in its forecast, it should dampen speculation that the is poised to cut interest rates which got a boost earlier this week following weaker than expected inflation data.

US markets had another storming day yesterday, with the Dow Jones surging 267 points to close at 29,298 and the S&P 500 advancing 28 points to finish at 3,317.

Asian markets have not exactly picked up the baton this morning; in Tokyo, the Nikkei is up 105 points at 24,038 but in Hong Kong, the Hang Seng index is off 23 points at 28,860.

Back to UK matters and the days corporate agenda will seecredit checking firm PLC () concludethe week with its latest quarterly update.

Analysts expect to read about consumer borrowing in the UK and the US, which are key drivers of revenue for the firm.

Consumer credit is a cyclical business though, and more important in the long run is the progress the companys making in its newer segments, analysts at Hargreaves Lansdown said in a note, adding the new markets are key to s premium valuation.

Recent history has led the market to expect further strong growth, but if the group trips up the knock-on effect on the share price could be very unpleasant.

Finals: PLC ()

Trading announcements: PLC (), ()

AGMs: ()

GM: ()

Economic data: UK retail sales, China GDP, China retail sales, China industrial production

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FTSE 100 closes up, boosted by miners and the pound - Proactive Investors UK