FTSE 100 higher on Lloyds boost and trade optimism
The FTSE 100 ended higher on Wednesday as a strong set of results from Lloyds helped the index shake off a bleak day for Sainsbury’s shares.
London’s top flight closed the day up 49.45 points, or 0.69%, at 7,228.62, also aided by optimism over ongoing trade tensions between the US and China.
Fiona Cincotta, analyst at City Index, said: “President (Donald) Trump seems for the time being to have softened his stance on the deadline for a deal on the Sino-US trade talks, infusing global markets with a light helping of optimism.”
Lloyds was flying higher after posting an increase in annual profits as it delivered a bumper £4 billion pay-out for shareholders and said it will meet cost targets earlier than expected.
The banking giant also shrugged off concerns about the impact of Britain’s departure from the European Union.
Lloyds booked pre-tax profits of £5.96 billion for 2018 compared with £5.28 billion the previous year, helped by lower charges for payment protection insurance (PPI) compensation.
Shares rose towards the top of the FTSE 100, closing up 2.76p, or 4.75%, at 61.13p.
At the other end of the spectrum, Sainsbury’s shares were pummelled after the competition watchdog all but killed its proposed £12 billion merger with rival Asda.
The Competition & Markets Authority said it could block the deal unless the pair sell off significant stores or even one of the brands.
It found “extensive” concerns over their planned tie-up, warning it could lead to higher prices and reduce quality and choice for shoppers across the UK.
Shares in Sainsbury’s closed down 53.4p, or 18.6%, at 234.5p.
On the second tier, Intu came in for a hammering after the shopping centre giant swung to an annual loss as it suffered a collapse in the value of its properties.
The company, which owns Manchester’s Trafford Centre and Gateshead’s Metrocentre, made a £1.17 billion loss in 2018 compared with £227.2 million pre-tax profit the previous year.
This came as the company saw £1.4 billion wiped off the value of its property portfolio to £9.2 billion.
Shares closed down 9.2p at 108.95p, a fall of over 7%.
The pound, meanwhile, was trading flat versus the US dollar at 1.306 at the London market close.
Against the euro, sterling was also flat at 1.150.
The British currency was once again slave to Brexit and political machinations, with three MPs quitting the Conservatives and signing up to the new Remain leaning Independent Group.
Heidi Allen, Anna Soubry and Sarah Wollaston joined eight Labour MPs in another twist ahead of March 29.
David Madden, market analyst at CMC, said: “The splits in both Labour and Conservative parties this week has shaken British politics, and that fear factor is playing out in the currency markets.”
In Europe, Germany’s DAX was up 0.9% and France’s CAC 40 was up 0.68%.
A barrel of Brent crude was changing hand at 67 US dollars, an increase of 1%.
The biggest risers on the FTSE 100 were Wood Group up 29.8p at 542.8p, GVC up 34p at 649p, Kingfisher up 12.4p at 241.6p and Antofagasta up 45.4p at 935.4p.
The biggest fallers on the FTSE 100 were Sainsbury’s down 53.4p at 234.5p, Morrisons down 12.8p at 227.25p, Hikma down 41.5p at 1,673.5p and London Stock Exchange down 95p at 4,508p.