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Market buzz: Shares cheapest versus bonds since WWII, Bank Rate a 'talking point'
1700:Close Stocks bounced back sharply on the back of gains for the Metals and Mining sector, as global trade tensions ebbed and metals' prices moved higher again.
Economic data was quite weak, although economists dismissed a drop in the key IHS Markit service sector purchasing managers' index for March to a 20-month low.
That, they said, was mainly attributable to the cold snap that hit the UK that month.
Perhaps so, although the pound did fall back on the news. On a related note, analysts at Oxford Economics told clients to expect a "marked" decline in CPI in 2018, to below 2.0% by the autumn.
No, that would not keep the MPC from hiking Bank Rate twice in 2018, they said, "but it could temper its hawkishness in 2019".
For the most part, sell-side analysts in the City continued to sound a confident note, with those at Citi recommending clients buy into the recent weakness in shares worldwide and upgrading their view on UK equities to 'overweight' - due to their recent underperformance and cheap valuations.
FTSE 100 up by 165.49 points to 7,199.50.
1546: On the back of their "significant" de-rating, with the worst performance out of 67 markets year-to-date, Citi analysts say UK shares now offer an attractive value proposition, cushioned by an equity risk premium of roughly 6%.
Indeed, during the last 20 years, UK shares' dividend yield, now at 4%, has only been higher in 2008-09 and the gap between the dividend and bond yield has only been wider on two prior occasions, they said, during WWI and WWII.
1504: Some market commentary is calling attention to an AP report from Wednesday regarding a possible decision by the White House, next month, to pull-out from the Iran arms control deal.
"Anticipating an unpredictable president's next moves, US officials have started actively planning for the likelihood that Donald Trump will announce next month that the US is withdrawing from the Iran nuclear deal. But no one knows exactly what would happen next or how Iran would respond."
1436: Boohoo is now entering a new phase in its strategic development as it continues to build out its infrastructure to help facilitate future growth, says analyst Clive Black at Shore Capital as he downgrade his recommendation to 'hold' from 'buy'.
Given management's plans to significantly step up capital expenditure on warehousing etc over the next few years from £31m in 2017 to £106m in the 2019 financial year, Black reckons "a phase of lower returns on investment" is dawning.
Whilst he agrees the company is "doing the right thing" by scaling up to achieve future growth, "the valuation looks up with events for now, as we struggle to see how earnings will be upgraded in the short term".
1350: Global equities should rise 8% by year-end, according to Citi strategits.
"We would buy into this dip," the bank said. "We think that markets have entered Phase 3 of the credit/equity clock. This is the period later in the cycle when credit spreads turn upwards. Equities keep making new highs but with increased volatility."
Citi is 'overweight' EM equities where valuations and earnings momentum look attractive and upgraded the UK to 'overweight' given recent underperformance and cheap valuations.
"We prefer cyclical to defensive stocks. Our pro-cyclical strategy is vulnerable to a slowdown in the global economy. This could be triggered by excessive monetary tightening or an escalation in trade wars."
1329: Credit Suisse reiterates its 'outperform' recommendation (and 700p target price) for Sophos, highlighting the shares' "attractive" free cash flow yield of 7% based on the company's own FCF target for March 2020.
In a separate note, the Swiss broker has started coverage of Global Energy at 'overweight' with a preference for UK energy shares, says forward prices (which are below spot) for crude oil should pick-up from here, with the consensus year-end 2018 forecast of $64 per barrel being "too pessimistic".
1323: In his annual letter to shareholders, JP Morgan boss Jamie Dimon warns that markets are facing a situation they have never encountered before, reversing the quantitative easing that they put in place in the wake of the financial crisis.
"Since QE has never been done on this scale and we don't completely know the myriad effects it has had on asset prices, confidence, capital expenditures and other factors, we cannot possibly know all of the effects of its reversal.
"We have to deal with the possibility that at one point, the Federal Reserve and other central banks may have to take more drastic action than they currently anticipate - reacting to the markets, not guiding the markets. A simple scenario under which this could happen is if inflation and wages grow more than people expect.
"I believe that many people underestimate the possibility of higher inflation and wages, which means they might be underestimating the chance that the Federal Reserve may have to raise rates faster than we all think."
1033: Three-month LME copper futures are edging higher from $6,772 per metric tonne at Wednesday's close to $6,786.
0948: Shire was was the standout gainer on the FTSE 100 as Credit Suisse said the overnight analyst call regarding Japanese drug maker Takeda suggested that CEO Christophe Weber is strongly committed to making an offer for the group.
"Feedback yesterday was that investors were worried the meeting might be vague and ambiguous, but from the initial feedback the tone was anything but," CS said.
Takeda confirmed at the end of March that it was considering making an approach to Shire regarding a possible offer.
"Takeda's consideration of such an offer is at a preliminary and exploratory stage and no approach has been made to the board of Shire," it said at the time, adding that there could be no certainty that an approach, if made, would lead to any transaction.
0931: Analysts at RBC see risks to BTG's stock following its latest trading update, telling clients they prefer "to wait on the sidelines, for now [...] given the current market environment for share prices to react negatively to mixed results (especially when highly valued)."
More specifically, they see risks for both Licensing and Pharma products. Nevertheless, and supporting the outfit's long-term growth prospects, they also see "quality" in the company's IO and Ekosonic assets, together with a "strong" balance sheet to support non-organic growth.
Even so, they add: "we think the disappointing sales growth from earlier-stage IM assets and risks to established brands could see revenue and profit growth stall."
0930: IHS Markit's service sector purchasing managers' index dropped like a stone last month, retreating from the 54.5 point level to a reading of 51.7 (consensus: 54.1) its weakest reading since July 2016.
Despite the weak reading, according to Chris Williamson: "[...] The indications of solid employment growth and stubbornly high price pressures therefore leave a widely-touted May rate hike very much in play.
"A strong rebound is nevertheless likely to be needed to ensure the majority of policymakers feel the economy is ready for another hike in interest rates."
0900: Shares are climbing, boosted by the somewhat less strident tone out from multiple top US officials overnight, which appeared to underpin risk appetite on Wall Street on Wednesday evening.
Nevertheless, in a late Wednesday tweet the US president continued to stress that the US international trade deficit was still too large, so big in fact that the country "could not lose", even as he stressed that America and China were not in a trade war.
For his part, White House economic adviser Larry Kudlow emphasised that no tariffs had yet actually been put in place by either side and that they were only proposals. However, neither did he provide any timeline on possible negotiations between Beijing and Washington, nor any detail on what form they might take.
Leading the early bounce on the Footsie are steel bashers and miners, including Evraz, Anglo American and Glencore.
Out on the second-tier index, a surge in shares of Sophos Group is helping to offset steep losses in Rank Group and BTG.
Pulling the rug out from underneath Rank's share price, management has cautioned about the outlook for UK consumer demand this year.
BTG on the other hand has told investors to expect a £150m impairment on the fair value of its PneumRx Coils for treating emphysema.