Hot Features
Premium
Trade smarter, not harder: Unleash your inner pro with our toolkit and live discussions.
London open: Stocks gain as banks and oil recover
London stocks edged up on Friday as finance stocks recovered and oil prices bounced back from declines throughout most of the week.
“Of course as those pre-referendum fears really ramp up next week that could change, but for now the FTSE appears to be settling into that 100 point range,” said Connor Campbell, financial analyst at Spreadex.
Morgan Stanley said the probability of a vote to Remain in next Thursday’s EU referendum stands at 55%, based on the expectation of a late swing in the polls. In this event, which is the bank’s base case, it expects to see a stock rally that could push the FTSE 100 up 14% from its current level.
Meanwhile, banks rebounded from a slump the previous day when worries about the impact of a possible vote by Britain to leave the EU weighed on the sector. Lloyds Banking Group, Barclays, Royal Bank of Scotland and Standard Chartered were the top risers on the FTSE 100 in morning trade.
Oil prices also regained strength with Brent crude up 1.5% to $47.92 per barrel and West Texas Intermediate up 1.13% to $46.73 per barrel at 0856 BST.
Investors’ spirits were also lifted by news that Greece’s eurozone creditors have agreed to release a much-needed €7.5bn tranche of funding. European Commissioner Pierre Moscovici said the agreement was a “a welcome breath of oxygen for the Greek economy”.
On the economic data front, there is little on the calendar with US housing starts, US building permits and the US Baker Hughes Rig Count the only notable releases due.
European Central Bank president Mario Draghi is due to speak at 1600 BST in Munich. The market will be looking out for any remarks on ECB policy and the looming European Union referendum in Britain on 23 June.
Fellow ECB board member Benoit Couere speaks in Berlin at 1245 BST.
On the corporate front, HSBC shares climbed even as it said it will pay $1.57bn to end a class action lawsuit over its 2003 purchase of Household International that could have exposed it to $3.6bn in payouts. The bank said it would take a pre-tax charge of around $585m in the second quarter.
Tesco gained as it confirmed the sale of its Dobbies Garden Centres chain to an investor group led by Midlothian Capital Partners and Hattington Capital.
JD Sports Fashion advanced as it said it is well placed to deliver an “excellent” first-half result on the back of the UEFA Euro 2016 tournament.
Aerospace and defence firm Cobham rallied after saying its one-for-two rights issue had been 97.21% subscribed. The 89p-a-share issue announced earlier this month will raise £506.7m to reduce debt.
