London close: Stocks extend gains on quiet day



LONDON (ShareCast) - With Wall Street closed for Martin Luther King Day on Monday, the UK stock market took advantage of low volumes to push London's benchmark index close to levels not seen in five years.

"European stock markets benefitted from the lack of news, earnings and economic data released today with the major indices higher by around 0.5%," said Market Analyst Craig Erlam from Alpari this afternoon.

"The FTSE 100 moved ever closer to May 2008 highs as the stock market bubble continued to rise supported by monetary stimulus measures from all over the globe, a lack of bad news out of the Eurozone and extremely low earnings expectations," he said.

Worth noting, technical analysts at Cantor Capital believe that the S&P 500's close last week above its 2012 highs (on a weekly basis) serves to confirm the Footsie (FTSE: ^FTSE - news) 's own break of resistance at 6,100 points. Technical analysts at Charles Stanley (LSE: CAY.L - news) take a similar writing today to clients that: "the magnitude of the break strongly suggests that this leg of the rally still has further to go."

Eurozone finance ministers (the Eurogroup) are meeting in Brussels today, where they are expected to elect the a new head with Jean-Claude Juncker stepping down from the post after having served for eight years. Holland's Finance Minister Jeroen Dijsselbloem is expected to take the helm.

Stocks also made gains as a two-day Bank of Japan meeting commenced, with expectations high for bond-buying announcements. According to a Bloomberg survey, most analysts expect a 10tn-yen increase in asset purchases.

Downing Street has announced that Prime Minister David Cameron will give his speech on European Union membership next Wednesday.

FTSE 100: Admiral (LSE: ADM.L - news) , IAG and RBS (LSE: RBS.L - news) provide a lift

Insurance giant Admiral surged today after Goldman Sachs (NYSE: GS-PB - news) upped its view on the shares from 'neutral' to 'buy' and hiked its price target from 1,160p to 1,500p. Admiral was followed closely by sector peer Aviva (LSE: AV.L - news) .

Airline operator IAG was performing well after Credit Suisse (NYSE: CRP - news) lifted its recommendation from 'neutral' to 'outperform', citing "expected progress" at Spanish unit Iberia. "The market has begun to price in Iberia progress. However resolution of labour challenges would likely drive significantly greater confidence in management's ability to achieve 2015 targets", the broker said.

Royal Bank of Scotland (RBS) rose on reports it is planning to divide its investment bank into two separate divisions. The transformation would see RBS's markets business split from its international banking division.

Gold miner Randgold also gained after saying that production has returned to normal at its Tongon mine after a fire in the mills section of plant three weeks ago.

Leading the downside was publishing and education company Pearson (NYSE: PSO - news) after its cutting its full-year profit guidance slightly. Meanwhile, the company said that the tough market conditions and structural industry changes seen at the end of 2012 have continued into 2013.

Shares in aerospace engineer Meggitt (Other OTC: MEGGF - news) were weighed down by concerns that one of the group's subsidiaries' products could be linked to the grounding of Boeing (NYSE: BA - news) 787 Dreamliners.

Aggreko (LSE: AGK.L - news) was hit by a downgrade from analysts at Bank of America (Other OTC: BACYL - news) to 'neutral', while luxury brand Burberry fell after sector peer Richemont after missed revenue forecasts.

Drinks group Diageo (LSE: DGE.L - news) was lower after UBS (Berlin: UBRA.BE - news) cut its recommendation to 'neutral'. Rival SABMiller (LSE: SAB.L - news) was also down after saying that it is to sell its Panama-based milk and juice business to narrow the focus of the Cerveceria Nacional division. SAB is to present its third-quarter trading update tomorrow.

FTSE 250 (FTSE: ^FTMC - news) : Afren (LSE: AFR.L - news) up after record performance

Oil and gas group Afren was a high riser after saying that production levels last year hit a record-high as it labelled its exploration and appraisal campaign a "significant success". Net production in 2012 totalled 42,830 barrels of oil equivalents per day (boepd), in line with the guidance range of 42,000-46,000 boepd given at the half-year results statement in August.

Transport and logistics group Stobart also rose after saying that Non-Executive Chairman Rodney Baker-Bates is to retire.

easyJet finished lower after founder Sir Stelios Haji-Ioannou warned directors he will sell his 37% family stake in the airline if they enforce plans to buy new aircraft, according to reports. He voiced his concern over the company's expansion plans in an open letter published today, accusing directors of "squandering" cash on new planes.

FTSE 100 - Risers
Admiral Group (ADM) 1,211.00p +4.94%
Aviva (AV.) 374.90p +2.38%
Weir Group (Other OTC: WEIGY - news) (WEIR) 1,950.00p +2.31%
Royal Bank of Scotland Group (RBS) 366.90p +2.26%
GlaxoSmithKline (LSE: GSK.L - news) (GSK) 1,405.00p +2.11%
International Consolidated Airlines Group SA (CDI) (IAG) 212.50p +1.97%
GKN (GKN (LSE: GKN.L - news) ) 248.10p +1.97%
Smith & Nephew (LSE: SN.L - news) (SN.) 710.00p +1.79%
National Grid (LSE: NG.L - news) (NG.) 695.00p +1.68%
British American Tobacco (LSE: BATS.L - news) (BATS) 3,223.50p +1.67%

FTSE 100 - Fallers
Pearson (LSE: PSON.L - news) (PSON) 1,202.00p -2.91%
Meggitt (MGGT) 429.40p -1.78%
Kingfisher (KGF) 268.90p -1.47%
Burberry Group (Other OTC: BBRYF - news) (BRBY) 1,367.00p -1.37%
Aggreko (AGK) 1,806.00p -1.31%
Diageo (DGE) 1,819.50p -1.28%
Shire Plc (LSE: SHP.L - news) (SHP) 2,071.00p -0.96%
Tullow Oil (LSE: TLW.L - news) (TLW) 1,154.00p -0.94%
Rexam (REX) 459.70p -0.91%
SABMiller (SAB) 2,960.50p -0.80%

FTSE 250 - Risers
Ocado Group (Other OTC: OCDGF - news) (OCDO) 95.05p +9.25%
Brewin Dolphin Holdings (BRW) 222.00p +5.46%
WH Smith (LSE: SMWH.L - news) (SMWH) 646.00p +4.96%
Henderson Group (LSE: HGG.L - news) (HGG) 158.70p +4.96%
Centamin (DI (KSE: 003160.KS - news) ) (CEY) 57.80p +4.24%
Stobart Group Ltd. (STOB) 95.00p +3.83%
Ferrexpo (FXPO) 271.20p +3.47%
ITE Group (LSE: ITE.L - news) (ITE) 255.20p +3.40%
Drax Group (LSE: DRX.L - news) (DRX) 580.50p +3.20%
Lonmin (LMI) 342.90p +3.07%

FTSE 250 - Fallers
Pace (PIC) 213.60p -2.24%
Wetherspoon (J.D.) (JDW) 500.00p -1.96%
Telecom Plus (TEP) 962.00p -1.89% Digital Entertainment (BPTY) 101.70p -1.74%
Informa (INF) 482.90p -1.69%
easyJet (EZJ) 857.50p -1.66%
Workspace Group (LSE: WKP.L - news) (WKP) 330.00p -1.64%
Computacenter (CCC) 445.80p -1.57%
EnQuest (ENQ) 123.20p -1.44%
Domino Printing Sciences (Other OTC: DMIPY - news) (DNO) 649.00p -1.37%