FTSE 100 rises on China economy hopes
London’s top flight was up 40 points, or 0.58%, at 6,895.02.
The FTSE 100 ended Tuesday in positive territory off the back of higher oil prices and moves by China aimed at strengthening its slowing economy.
London’s top flight was up 40 points, or 0.58%, at 6,895.02 at the close.
David Madden, analyst at CMC Markets, said: “The major equity benchmarks started off strong today after Beijing announced plans overnight to trim the tax rate for small businesses.
“It was the latest move by the Chinese government to try and encourage economic activity.
“The firmer oil price has helped BP and Royal Dutch Shell, which in turn has helped the FTSE 100.”
Brent crude was trading at 60 US dollars a barrel, an increase of 1.6%.
In stocks, Persimmon shares were under pressure, despite the housebuilder hiking full-year profit expectations thanks to a robust housing market in the UK.
But the Charles Church owner said it is also mindful of “market cycle risks and wider economic uncertainties”, including those related to Britain’s departure from the European Union, and it has therefore taken a selective approach when acquiring new land plots.
Shares closed down 28p at 2,201p.
On the FTSE 250, embattled doorstep lender Provident Financial saw shares tumble after it warned that 2018 profits will be at the lower end of expectations.
The group said it had seen a rise in bad debts at its Vanquis Bank arm and falling numbers of new accounts after clamping down on its lending.
Provident now expects full-year profits towards the lower end of the expected range of between £151 million and £166 million.
Shares were down 126p, or 19.5%, at 521p at the close.
The pound, meanwhile, took a turn for the worse as the clock ticked towards what looks like an inevitable Parliamentary defeat for Theresa May’s Brexit plan.
Having traded flat for most of the day, sterling was down 0.8% versus the US dollar at 1.276 at the London market close.
Against the euro, the pound shed 0.2% to end the session at 1.119.
As MPs gear up to vote on the Withdrawal Agreement, currency traders are readying for more volatility, depending on the scale of the defeat and what might happen next.
If Parliament rejects it with a large majority, City Index’s Fiona Cincotta believes that the pound could tank.
“Labour (will) look to call a vote of no confidence in Theresa May, pushing for a general election. Domestic political chaos, the prospect of a Labour government and on-going Brexit uncertainty would be a toxic combination for the pound, sending it back towards 1.20 US dollars and the post Brexit referendum lows,” she said.
“An extension of Article 50 seems almost inevitable at this stage. This would offer some support to the pound as investors see the risk of a no-deal fading. How the pound moves thereafter depends not only on what Plan B is, but also Labour’s reaction.”
The biggest risers on the FTSE 100 were Rolls Royce up 22.6p at 886p, 3i Group up 20.8p at 835.8p, Ocado up 18p at 869p and Sage up 12p at 604p.
The biggest fallers on the FTSE 100 were GVC down 19.5p at 675.5p, Barratt Developments down 9.3p at 498.5p, IAG down 9.2p at 595.2p and Pearson down 15p at 976.6p.