The European Central Bank’s higher than expected €1.14tn bond buying programme sent UK shares to their best level for four months.
The FTSE 100 finished up 68.59 points or 1.02% at 6796.63, its highest since 19 September last year. European markets also gained ground, while the euro fell sharply as the ECB turned on the money taps. Chris Beauchamp, market analyst at IG, said:
Overall, the ECB has got away with it today, but with Greek elections looming there is still a big risk that the European rally in stock markets has run its course for now.
Among the risers Royal Mail gained 15.3p to 445.8p after a good Christmas performance from its parcels business, while Tullow Oil added 3.8p to 388.3p after reasonable results from exploration wells in Kenya, with exploration director Angus McCoss calling the news “highly encouraging.” Oriel said:
It is good to see that the appraisal of the two major discoveries in Kenya is going well, underpinning the already discovered gross 600m barrels of contingent resources and their potential development.
RSA Insurance rose 15p to 466.8p as Credit Suisse upgraded its recommendation from neutral to outperform.
Imperial Tobacco recovered from early losses following news the UK government intended to introduce a law forcing cigarette firms to use plain packets without branding, in an attempt to improve health and cut smoking. It closed 14p better at £30.20.
Wolseley climbed 106p to £39.45 after it said it was looking at options to exit its remaining building materials businesses in France. In the most recent figures to July last year, the businesses involved made trading profits of £7m on revenues of £577m. In a buy note Liberum said:
Net assets have already been written down to £130m so further write-offs should be manageable. Not big news either way, but improves the quality of the group.
But Associated British Foods dipped 13p to £29.85 after last week’s update. In a hold note, analyst Charles Pick at Numis said:
At the time of the November finals and AGM on 5 December guidance was that earnings before interest and tax this full year would be lower due to sharply reduced sugar profits offsetting advances elsewhere but with this negated by lower finance and tax charges leading to small-scale growth in earnings per share.
Revised guidance is that a marginal decline in adjusted earnings per share is expected. The swing factor is the strength of sterling – despite some offset via the dollar, this is set to cost £15m. Pretax profits projections for this full year and next have been reduced by 4.9% and 4.1% respectively, with the change this full year mainly due to a materially lowered earnings before interest and tax estimate for sugar. Earnings per share reductions are 4.1% and then 3.4% due to lower assumed tax rates.
SSE slipped 14p to £14.90 as its shares went ex-dividend, while Compass was down 5p at £11.30 for the same reason.
Lower down the market a hefty profit warning from Oxford Instruments saw its shares close 305p lower at 795p.
MySale, the online fashion retailer backed by Sir Philip Green and Mike Ashley which warned on profits before Christmas, slipped 1.5p to 61p. It said revenues accelerated in December so first half sales would be 8% higher in the first half of the financial year. But it also plans to close its websites in the US and South Korea, to focus on its key markets of Australia, New Zealand, south-east Asia and the UK.
