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European markets rise as ECB flags ‘clear signs of economic improvement’

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PA City Staff
·3-min read
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The European markets made further progress as the European Central Bank said there were “clear signs of improvement” in the Eurozone economy.

Christine Lagarde helped to buoy sentiment, although the central bank still cited uncertainty on the horizon and global traders still have concerns over virus rates in Asia.

Nevertheless, London traders were hopeful as positive company announcements from the start of the annual earnings season helped to keep the FTSE higher.

The FTSE 100 closed 42.95 points, or 0.62%, higher at 6,938.24 on Thursday.

Elsewhere, the German Dax increased by 0.82% and the French Cac moved 0.91% higher.

Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have managed to consolidate the gains we saw yesterday, though there’s been a slightly more defensive bias than was the case yesterday, with utilities amongst the better performers, while energy has once again lagged due to lower oil prices.

“Airlines seem to be performing quite well this side of the Atlantic, although there does appear to be a bit of a domestic bias, with EasyJet and Ryanair outperforming IAG, probably down to the fact that the smaller airlines don’t have exposure to international travel.”

Across the Atlantic, trading was more cautious and the main markets dipped on the opening bell as they struggled for direction following strong gains on Wednesday.

Meanwhile, sterling lost steam against a Euro buoyed by the ECB’s comments and a dollar which pushed higher on improved weekly jobs figures.

The pound decreased by 0.56% versus the US dollar to 1.385 and was down 0.37% against the euro at 1.153.

In company news, Morgan Sindall shares jumped to a record high after the construction group told investors that its profits for the year will be “significantly ahead” of expectations.

Bosses said that all of its business operations had a “positive” start to the year, with a particularly strong performance by its office fitting arm Overbury.

Shares in the company were 367p higher at 2,235p at the close of play.

BAE Systems slid in value on Thursday after it went ex-dividend, meaning new shareholders will now miss out on its next dividend payment.

It also came amid reports of a potential investor revolt as Sky News revealed that advisory group ISS criticised a 13% salary hike and £2 million long-term share award for its chief Charles Woodburn. It closed 26.5p lower at 499.9p.

Takeaway firm Dominos Pizza Group finished 4p lower at 363p as it revealed a slow down in its recently-strong sales growth.

The price of oil nudged a touch higher after two days of significant slumps, as concerns over the impact of the latest coronavirus wave in Asia on oil demand continue to linger.

The price of Brent crude oil increased by 0.23% to 6547 dollars per barrel.

The biggest risers on the FTSE 100 were Scottish Mortgage Investment Trust, up 44.5p at 1,251.5p, Polymetal International, up 55.5p at 1,634.5p, SSE, up 50.5p at 1,509p, and IAG, up 6.56p at 200.5p.

The biggest fallers of the day were BAE Systems, down 26.5p at 499.9p, Fresnillo, down 20.6p at 908.6p, Informa, down 11.6p at 552.6p, and Antofagasta, down 36p at 1,805p.