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London stocks recover after Wednesday's £52bn losses

Published 21/01/2016

The FTSE 100 Index was up 17.1 points to 5691.1
The FTSE 100 Index was up 17.1 points to 5691.1

The London market bounced back, after the turmoil of Wednesday's sell-off which saw £52 billion wiped off the value of top-flight shares.

The FTSE 100 Index was up 100.2 points to 5773.8, after European Central Bank (ECB) President Mario Draghi assured rattled investors there was "no limit" to measures it would take to steady the Eurozone area.

The ECB left its key interest rates untouched today and did not ramp up its existing 1.5 trillion-euro (£1.1 trillion) monetary stimulus programme, but held out the prospect of action in March which buoyed markets.

Germany's Dax and the Cac 40 in France were both up by around 2%. In New York the Dow Jones Industrial Average jumped almost 200 points in early trading.

Top-flight shares fell more than 3%, or 203.2 points, on Wednesday, hitting their lowest level since November 2012 and officially slumping into bear market territory.

The pound was a cent up against the euro at 1.32, after Mr Draghi's comments. Sterling was slightly up against the US dollar at 1.42.

In stocks, education giant Pearson was the biggest riser in the top flight - up more than 17%, or 114.5p at 772p, after it said it would axe around 4,000 jobs as part of a group-wide cost-cutting plan.

The firm cut its full-year earnings guidance, pencilling in around £720 million in underlying operating profits for 2015, and warned that earnings were set to fall further in 2016, to between £580 million and £620 million before restructuring costs.

But the group hopes its turnaround efforts will cut annual costs by around £350 million and return operating profits to at least £800 million a year in 2018.

Royal Mail lifted 17.2p to 438.7p, after it said it delivered 130 million parcels across the UK over Christmas, up 6% on a year ago.

In the nine months to December 27, it said parcel volumes rose 4%, although price pressure from rivals saw revenues grow by just 1%.

Barclays was up 4.1p to 186.2p, after around 1,200 investment banking jobs are to be axed at the bank under plans to pull out of Russia and shut offices across a raft of countries in the Asia Pacific region.

Recently hired boss Jes Staley is kicking off another wave of job losses in the investment banking arm, on top of 7,000 cuts made since 2014.

Elsewhere, Halfords said a rebound in bike sales helped offset the impact of a mild winter on its car parts business.

The FTSE 250 firm said like-for-like bike sales lifted 1.1% in the 15 weeks to January 15 - marking a turnaround after a disappointing drop of 7.6% over the summer.

Shares jumped more than 12%, or 40.4p to 365.4p.

The biggest risers in the FTSE 100 Index were Pearson up 114.5p at 772p, Glencore up 11.1p at 82.3p, Anglo American up 27p at 248p and BHP Billiton up 61.9p at 642.8p.

The biggest fallers in the FTSE 100 Index were Compass Group down 46p at 1088p, SSE down 40p at 1345p, BAE Systems down 10.8p at 479.2p and Sports Direct International down 6.1p at 397.8p.

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