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London close: Shares gain as pound slips on 'dovish' remarks from Carney
(WebFG News) - London stocks held onto gains made early on Friday, as investors mulled dovish comments from Bank of England Governor Mark Carney from the night before against a more hawkish tone from fellow rate-setter Michael Saunders, amid weakness in Sterling.
By session-end, the FTSE 100 was up 0.54% or 39.25 points at 7,368.17, while the pound reversed earlier losses against the euro to trade up 0.10% at 1.1422 and trimmed losses versus the US dollar, trading down just 0.41% at 1.40284.
Sterling had been under pressure after Carney cast doubt on another interest rate hike in May, but the currency managed to recover some of its poise following more hawkish comments from Saunders today.
Speaking to BBC News the previous evening, Carney highlighted recent mixed UK data and said he didn't want to be "too focused on the precise timing" of an interest rate hike.
"The biggest set of economic decisions over the course of the next few years are going to be taken in the Brexit negotiations and whatever deal we end up with. And then we will adjust to the impact of those decisions in order to keep the economy on a stable path," he said.
However, Michael Saunders - an external member of the Monetary Policy Committee who voted for a hike in March - pushed back against Carney's comments. In a speech in Glasgow on Friday morning, Saunders argued that interest rate hikes should be gradual, not glacial.
"'Gradual' does not imply that the MPC can only raise rates at a very low frequency, such as once per year. Nor does 'gradual' mean that the MPC cannot tighten faster than markets price in," he said in a speech at the University of Strathclyde.
Spreadex analyst Connor Campbell said: "The pound-boosting potential of these comments was tempered by the fact that a) this wasn't some dove-to-hawk switch given Saunders' stance last month, and b) he doesn't feel that 'the exact timing of rate changes must be totally predictable or signalled in advance'."
Analysts at TD Securities said what was now clear from the last 24 hours was that the distribution between a May and an August hike has shifted, "and we're likely to see a divided committee in May, regardless of which decision it takes".
In corporate news, building materials group CRH was the standout gainer after its chief executive told the Irish Times that the company was keeping the prospect of a full of partial New York listing of its key US division under review, having ruled it out in the past.
Barclays was in the black after it emerged that boss Jes Staley will be fined by UK regulators for attempting to uncover a whistleblower back in 2016, but that Staley would not be banned.
Housebuilder Taylor Wimpey edged higher after announcing that finance director Ryan Mangold was stepping down.
Hikma Pharmaceuticals surged after saying it has launched Dexrazoxane for injection, to reduce the incidence and severity of heart disease in women receiving a common chemotherapy treatment.
Meggitt ticked up as it secured a long-term agreement with Solar Turbines, while Fidessa gained as Ion Investment Group confirmed it has made a proposal to buy the financial technology for £38.703 per share in cash. Ion has until 1700 BST to make a firm bid or say it does not plan to make one.
Royal Mail finished lower after saying that chief executive officer Moya Greene will retire in September after more than eight years in the role. She will be succeeded by Rico Back.
Indivior gained after filing a new drug submission with Health Canada's Therapeutic Drug Directorate for an opium use disorder treatment.
Esure was a high riser after Peel Hunt upgraded the stock to 'buy', while Cineworld racked up healthy gains after Berenberg added the stock to its preference list, saying the market is being overly bearish on the prospects for a US rebuild after the significant Regal acquisition and associated rights issue.
On the downside, Shire retreated after Allergan has pulled out of its pursuit for the biopharmaceutical group only hours after saying it was pondering a possible takeover offer. The botox-maker confirmed in a statement on Friday morning that it "does not intend to make an offer for Shire". This came a day after Japan's Takeda said the company had rejected a £42.4bn takeover offer.
Durex and Dettol maker Reckitt Benckiser was under the cosh as like-for-like sales for the first quarter fell short of estimates, while housebuilder Countryside Properties was lower after US hedge fund Oaktree Capital sold its entire 8% stake in the company.
Pub group Greene King was under pressure as Berenberg cut its price target and estimates on the stock and reiterated its 'sell' rating.
Market Movers
FTSE 100 (UKX) 7,368.17 0.54%
FTSE 250 (MCX) 20,220.77 0.37%
techMARK (TASX) 3,420.93 0.29%
FTSE 100 - Risers
CRH (CRH) 2,525.00p 4.08%
Smiths Group (SMIN) 1,618.50p 2.96%
Standard Chartered (STAN) 764.40p 2.56%
NMC Health (NMC) 3,680.00p 2.56%
Mediclinic International (MDC) 690.60p 2.37%
Imperial Brands (IMB) 2,402.50p 2.02%
Experian (EXPN) 1,604.00p 2.00%
Just Eat (JE.) 741.60p 1.73%
Vodafone Group (VOD) 210.00p 1.62%
GlaxoSmithKline (GSK) 1,430.00p 1.61%
FTSE 100 - Fallers
Shire Plc (SHP) 3,821.50p -3.86%
Reckitt Benckiser Group (RB.) 5,625.00p -2.78%
GKN (GKN) 467.90p -2.03%
Smurfit Kappa Group (SKG) 3,136.00p -1.63%
Rolls-Royce Holdings (RR.) 866.20p -1.21%
Antofagasta (ANTO) 952.80p -0.98%
Anglo American (AAL) 1,767.20p -0.91%
WPP (WPP) 1,146.50p -0.82%
DCC (DCC) 6,825.00p -0.80%
G4S (GFS) 258.50p -0.69%
FTSE 250 - Risers
Ultra Electronics Holdings (ULE) 1,405.00p 6.20%
Capita (CPI) 159.80p 5.72%
On The Beach Group (OTB) 610.00p 4.27%
Intu Properties (INTU) 202.30p 4.09%
Hammerson (HMSO) 540.00p 3.97%
Inmarsat (ISAT) 375.80p 3.24%
TalkTalk Telecom Group (TALK) 126.10p 3.11%
JD Sports Fashion (JD.) 391.50p 3.08%
IP Group (IPO) 138.20p 2.98%
Petrofac Ltd. (PFC) 599.60p 2.92%
FTSE 250 - Fallers
Bakkavor Group (BAKK) 182.00p -3.19%
Greene King (GNK) 562.60p -3.13%
Melrose Industries (MRO) 229.20p -2.96%
Countryside Properties (CSP) 360.40p -2.86%
Weir Group (WEIR) 2,201.00p -2.18%
Hochschild Mining (HOC) 219.40p -2.05%
Diploma (DPLM) 1,193.00p -1.57%
Wetherspoon (J.D.) (JDW) 1,166.00p -1.52%
Alfa Financial Software Holdings (ALFA) 365.50p -1.50%
Sanne Group (SNN) 616.00p -1.44%