Closed US markets keep FTSE 100 calm despite Davos warnings

The US markets are usually one of the major influences on how the London Stock Exchange closes out a day of trading.

But on Monday there was no guidance to be had, as US exchanges remained closed for the Martin Luther King Jr Day holiday.

Instead, traders took their feet off the gas and watched as the FTSE 100 slowly ticked down, closing out the day off by 23.12 points at 7651.44.

On European markets, the CAC 40 in Paris ended down 0.4%, while the DAX 30 in Frankfurt ended up 0.2%.

Cabinet meeting
Cabinet meeting

There was little in the way of economic news either, although there was a slight wobble as the International Monetary Fund (IMF) told the World Economic Forum in Davos that its analysts now expect the global economy to grow by 3.3% this year – a downward revision from 3.4% predicted three months ago.

In 2021, the prediction for growth was also reduced from 3.6% to 3.4%.

Connor Campbell, financial analyst at SpreadEx, said: “Though investors didn’t react strongly to this update, it also served to prevent any real turnaround.”

Currency traders also appeared to shrug at an interview given by Chancellor Sajid Javid over the weekend in which he said the UK would not be aligning with EU rules after the transition period ends – although precise details were not given.

The pound was flat against the dollar as markets closed, with a pound worth 1.299 dollars.

Against the euro it ticked up less than 0.1% to be worth 1.173 euros.

There was slightly more excitement for oil traders, as the price of a barrel of the black stuff ticked up steadily following political unrest in Iraq and Libya.

A barrel of Brent crude was up 0.51% at 65.18 dollars as markets closed in Europe.

David Madden, market analyst at CMC Markets UK, said: “The fact there are output issues in two oil producers has been a double whammy for the energy market, but then again oil dealers have seen huge volatility in recent weeks, and if anything, today’s upward move is relatively small when compared with the moves witnessed during the Iranian tensions.”

In company news, there were boosts to housebuilders as a new report from Rightmove suggested house prices rose in December.

Barratt Developments, Berkeley Group and Persimmon were all big risers, up 17p at 816.4p, 102p at 5,142p and 57p at 2,948p respectively.

But shooting the lights out was BAE Systems, which saw its shares close out the day up 23p, or 3.7%, at 647.6p as bosses revealed they had splashed out 2.2 billion dollars (£1.7 billion) on a new GPS and radio business.

Elsewhere, shopping centre owner Intu confirmed it plans to tap up shareholders as it attempts to pay down its £5 billion debt pile. Rumours had been around previously and investors were unmoved, with shares closing down just 0.23p, or 1%, at 22.63p.

Anglo American said it will save the Sirius Minerals Yorkshire mining project, as it tabled a £405 million bid.

Shares in Sirius closed up 0.14p at 5.54p – slightly above the bid of 5.5p a share by Anglo American, which closed down 5p at 2240.5p.

The biggest risers on the FTSE 100 were BAE Systems up 23p at 647.6p; Barratt Developments up 17p at 816.4p; Berkeley Group up 102p at 5,142p; Persimmon up 57p at 2,948p; and Auto Trader up 10.2p at 583.6p.

The biggest fallers were NMC Health down 57.5p at 1,500p; Burberry down 52p at 2,277p; IAG down 13.8p at 657.2p; EasyJet down 27.5p at 1,450p; and BT down 3.28p at 180.84p.