LONDON MARKET CLOSE: Miners and banks rise as FTSE tops 7,000 again

(Alliance News) - London's FTSE 100 ended above the 7,000 points mark for the first time since the start of the pandemic, as banking stocks gained on the back of promising Wall Street earnings, and miners climbed following strong economic data from China.

"The UK market has been something of a laggard, compared to international markets on both sides of the Atlantic. But today the FTSE 100 has passed a big milestone, rising through 7,000 for the first time since the pandemic sent it tumbling a year ago. Investor confidence in economic recovery is rising as governments roll out stimulus packages and business confidence surveys are hitting highs," Hargreaves Lansdown Select Fund Manager Steve Clayton commented.

"Whether the FTSE can close the gap against US and European market indexes is another matter. The UK market has much bigger exposure to commodities and banking than Wall Street or Frankfurt, so the performance of those sectors will be key to the UK's relative performance in the years ahead. For now though, sentiment is on the up and the FTSE100 is having its day in the sunshine."

The FTSE 100 index rose 36.03 points, or 0.5%, to close at 7,019.53, gaining 1.5% over the week. The last time the blue-chip index closed above 7,000 points was in February of last year.

The mid-cap FTSE 250 ended the session 50.14 points higher, 0.2%, at 22,522.18. The mid-cap index managed to muscle in a few more gains during its recent rally to close at another record high. It gained 1.2% this week.

The AIM All-Share index closed 6.12 points higher, or 0.5%, at 1,254.25, rising 1.4% this week.

The Cboe UK 100 index ended up 0.3% at 698.06. The Cboe 250 closed up 0.1% at 20,113.17. The Cboe Small Companies closed down 0.4% at 14,508.52.

In Paris, the CAC 40 surged 0.9%, while the DAX 30 in Frankfurt jumped 1.3%.

In London, Barclays rose 2.8%, NatWest climbed 2.3% and HSBC ended 1.5% higher.

"Banks are among the top performers today with four of the high streets biggest banks appearing in the top 12 biggest risers," Clayton added. "This is demonstrating increased confidence in the UK recovery after the successful roll-out of the vaccines."

In addition, Morgan Stanley became the latest bank to wow Wall Street with strong first-quarter earnings. In the three months to March 31, New York-headquartered investment bank recorded net income USD4.12 billion, sharply higher from USD1.70 billion the year before.

Morgan booked a credit benefit in the first quarter of USD98 million compared to the USD407 million provision seen the year before. Net revenue hiked 61% to USD15.72 billion from USD9.78 billion.

The stock was down 1.4% in New York.

On Wall Street, the Dow Jones Industrial Average was up 0.3% at the time of the closing bell in London. The S&P 500 rose 0.2% but the Nasdaq Composite fell 0.1%.

Investment banks in Europe took heart from the Morgan Stanley update. UBS rose 1.9% in Zurich, while Deutsche Bank climbed 2.3% in Frankfurt.

Anglo American rose 0.7% and Rio Tinto climbed 1.2%. Miners were boosted from strong gross domestic product data from China overnight.

China's economy expanded at its fastest pace on record in the first quarter of 2021, data showed, in a sharp turnaround from the historic contraction caused by the coronavirus outbreak.

The 18% explosion in GDP from a year ago was the fastest pace since quarterly records began three decades ago, accelerating sharply from a 6.5% growth in the fourth quarter.

Carrier Wizz Air ended among the better FTSE 250 performers, rising 1.3%. Budget airline easyJet rose 0.6%.

"Airlines are a particular standout performer in early trade today, with investors preparing for a likely reopening of international travel in a month's time. Mondays loosening of restrictions in the UK is yet to herald a rise in Covid cases, and airlines are likely to outperform as long as those figures remain subdued," IG analyst Joshua Mahony commented.

Towards the other end of the mid-caps, AO World fell 3.2%. The online-only electricals retailer benefitted from a sales boom due to Covid-19 lockdowns. Just Eat Takeaway.com and Deliveroo, who also saw increased activity due to virus curbs, fell 1.1% and 3.5% on Friday.

The pound was quoted at USD1.3821 at the London equities close Friday, up from USD1.3788 on Thursday. The euro was priced at USD1.1981, up from USD1.1965. Against the Japanese yen, the dollar was quoted at JPY108.82, up from JPY108.71.

Brent oil was trading at USD66.70 a barrel late Friday, up from USD66.58 late Thursday.

Gold was trading at USD1,778.24 an ounce at the London equity market close on Friday up from USD1,766.35 on Thursday.

The early months of 2021 saw a litany of initial public offerings in London. On Friday, musicMagpie became the latest firm to announce plans for a listing on AIM. The used electronics e-commerce firm is to raise GBP15 million for the company and GBP95 million for selling shareholders in its initial public offering. Based on the placing price of 193 pence, it expects a market capitalisation of GBP208 million.

Elsewhere, Sky News reported on Thursday that investment bank Peel Hunt is considering an initial public offering in London and the Financial Times reported fintech firm Wise is in talks with UK regulators over going public via a direct listing.

Monday's economic calendar has Japan trade statistics overnight and eurozone construction output data at 1000 BST. The People's Bank of China's latest interest rate decision is reported on Tuesday, before UK inflation data on Wednesday and a slew of flash PMIs on Friday.

Monday's local corporate calendar has annual results from ceramic products maker Churchill China and oil and gas firm Energean.

By Eric Cunha; ericcunha@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.