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FTSE 100 movers: EasyJet flies on technical flag, Berkeley rant misfires
London's FTSE 100 was lifted by financials and commodity stocks on Friday, with the index up 0.62% to 7,183.99.
Bank shares led the gains after the Bank of England's Financial Policy Committee said lenders would not need to boost capital reserves, which mostly seemed to relieve Royal Bank of Scotland and Barclays.
The BoE said it will set the same stress tests in 2018 as in 2017, partly to ensure lenders had sufficient spare resources to respond to Brexit and to restructure and ring-fence their UK banks to comply with new rules.
"Lower reserves means more funds for more lending or for putting directly in the pocket of shareholders via dividends or buybacks," said market analyst Jasper Lawler at London Capital Group.
This year's test will have with a twist that tougher pass rate have been set for the largest lenders judged to be "systemically important", which some commentators said could potentially put more pressure on RBS and Barclays as both failed to pass the higher systemic hurdles set for them last year, though both have pushed up their capital buffers since.
Miners were on the rise early in the session, helped by copper prices coming off their lows, but with Glencore the only one to keep hold of its gains by the late afternoon. BP and Shell were lifted at Brent crude rose 1.8%.
But beating both the banks and the miners was EasyJet, with the budget airline taking off as traders jumped onto a technical signal.
Analyst Mike van Dulken at Accendo Markets said there had, last week, been a bullish flag pattern towards February highs. A 'flag' is a signal that a stock should soon move in a particular direction. A bullish flag, van Dulken explains, will see a stock's initial rally form the 'flagpole', then a drop-off in the shares forms the 'flag' itself and "represents a pause to consolidate, retracing a small part of the initial rally within a tight channel'.
"A breakout from this channel is the first hint that a Bullish flag could be in the making," he says, which is what technically-minded traders use as a timing tool to make an investment.
Housebuilder Berkeley Group led the fallers and dragged down much of the sector with it. The London and South East-focused builder reported a resilient level of home sales over the past four months and was confident enough about the "compelling" fundamentals of the region to maintain profit and dividend guidance, but gave a rather aggressive defence of why it cannot raise its build rate. The FTSE 100 housebuilder, seemingly reacting to a government investigation into builders 'sitting on land', blamed "market constraints" on it being "unable" to increase production, which sent ripples of uncertainty though to peers including Taylor Wimpey, Barratt and Persimmon.
Russian steel maker Evraz was lower, perhaps with investors fearing frosty relations and potential sanctions due to the Salisbury poisoning incident. Rising political tensions between the United Kingdom and Russia clicked up a notch as Moscow said it would retaliate against London's move to expel 23 Russian diplomats over a nerve toxic attack on a Russian former double agent in Britain.
Market Movers
FTSE 100 (UKX) 7,183.99 0.62%
FTSE 250 (MCX) 19,826.28 -0.01%
techMARK (TASX) 3,343.70 0.33%
FTSE 100 - Risers
easyJet (EZJ) 1,663.00p 2.34%
BP (BP.) 473.60p 1.95%
Royal Bank of Scotland Group (RBS) 262.00p 1.75%
Barclays (BARC) 210.40p 1.64%
AstraZeneca (AZN) 4,877.50p 1.64%
Smurfit Kappa Group (SKG) 3,179.33p 1.58%
Glencore (GLEN) 384.95p 1.53%
Royal Dutch Shell 'B' (RDSB) 2,253.50p 1.49%
HSBC Holdings (HSBA) 709.50p 1.47%
National Grid (NG.) 781.00p 1.43%
FTSE 100 - Fallers
Berkeley Group Holdings (The) (BKG) 3,750.00p -4.41%
Evraz (EVR) 426.00p -2.85%
Kingfisher (KGF) 344.00p -1.80%
GKN (GKN) 424.50p -1.32%
Micro Focus International (MCRO) 1,896.50p -1.30%
Prudential (PRU) 1,918.50p -1.29%
Barratt Developments (BDEV) 530.80p -1.04%
Taylor Wimpey (TW.) 184.77p -1.03%
Next (NXT) 4,781.00p -0.99%
Tesco (TSCO) 211.91p -0.97%