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17.25: The FTSE 100 closed up 35.81 points at 7013.55 as US bank results pleased traders while Tesco and Uniliver settled their Marmite spat.

The US Dow Jones rose 75.3 points to 18,174.30 while Germany’s DAX gained 166.3 points to 10,580.4 and France’s CAC 40 moved up 65.8 points to 4,470.9. The pound was back below $1.22 as the Brexit fallout continued and Brent crude was at $51.67.

‘Better than expected US bank earnings and higher than expected Chinese inflation data helped lift spirits in stock markets on Friday,’ Jasper Lawler of CMC Markets.

Market watch: US bank results pleased traders while Tesco and Uniliver settled their spat

Market watch: US bank results pleased traders while Tesco and Uniliver settled their spat

‘Signs of weak global growth and hawkish Federal Reserve minutes that stoked fears of a US rate rise this year have dogged markets for the majority of the week.

‘The FTSE 100 regained the 7,000 threshold led by gains in Tesco after it resolved its dispute with Unilever and bank stocks which benefited from a positive read-across from improved earnings at JP Morgan and Citigroup.

‘Tesco shares topped UK equity benchmark, while Unilever shares are near the bottom after the two firms reached an agreement over “Marmite-gate”. It seems that in the war that has erupted between supermarkets and their suppliers because of the weaker pound, Tesco has won its first battle.

‘Unilever seems to have caved in to limit the PR damage incurred by its popular products like Marmite and Hellman’s Mayonnaise not being available to customers.

‘The writing is on the wall though. Suppliers are clearly in the mood for renegotiation because of impact of the weaker pound on margins, and the supermarkets won’t win all the battles. It’s inevitable that while the pound remains weak, retail prices are headed higher, just as UK supermarkets were staging a fight back against discounters.’

Chris Beauchamp of IG said of the latest US earnings reports: ‘After Alcoa’s disappointing figures earlier in the week, investors had begun to fear that this season’s figures might not paint the improving trend that had been suggested by analysts.

‘Today’s numbers from Wells Fargo, JP Morgan and Citigroup have banished those fears, with US markets moving higher as a result. Admittedly it is Friday, so we’ll need to see these gains hold in the new week, but for now the fears of an October correction appear to have been banished.

‘Tesco is the big winner of the day in London, having emerged triumphant from its ‘David vs Goliath’ duel with Unilever. Perhaps investors feel more confident about backing Dave Lewis, knowing that he is evidently prepared to face down even his old employer.’

Tesco led the charge on the FTSE 100, closing 4.4 per cent or 8.6p higher at 203.7 points, after announcing that the head-to-head battle with Unilever was ‘successfully resolved’.

It comes after the grocery giant was left grappling with a shortage of store cupboard staples – Marmite, Pot Noodle and Persil – after reportedly refusing to bow to Unilever’s demands for a 10 per cent price hike amid a drop in sterling. Unilever dropped 1.4 per cent or 48.8p to 3,547.8p.

Shares in hedge fund firm Man Group topped the FTSE 250, closing 13.8 per cent or 15p higher at 123.7p after it reported stronger-than-expected investor inflows.

The biggest risers on the FTSE 100 were Tesco up 8.6p at 203.7p, Mediclinic up 29p to 914.5p, Informa up 16p at 663.5p, and Marks and Spencer up 7.8p at 327p.

The biggest losers on the FTSE 100 were Antofagasta down 19.5p at 520p, Randgold Resources down 2230p to 6800p, Fresnillo down 46p to 1620p, and Ashtead Group down 32p at 1315p.

17.01: The FTSE 100 closed up 35.81 points at 7013.55. More to come.

15.00: The Footsie held firm in late afternoon trading as US stocks opened with good gains after some upbeat US earnings and data and following bullish Chinese inflation data today, which balanced weak trade numbers from the country yesterday.

With an hour and a half of trading to go, the FTSE 100 index was up 73.3 points, or 1.0 per cent at 6,751.0, just below the day’s peak of 7,055.18, rallying after three sessions of declines after hitting an intra-day all-time high of 7,129.83 on Tuesday.

European markets were stronger, with France’s CAC 40 index up 1.9 per cent and Germany’s Dax 30 index ahead 1.8 per cent, after benign eurozone trade data today.

In early trading on Wall Street, the blue chip Dow Jones Industrial Average was up 138.5 points at 18,237.4, while the broader S&P 500 index gained 14.6 points at 2,147.2, and the tech-laden Nasdaq composite added 41.2 points at 5,154.5.

Global markets rallied after September producer prices in China unexpectedly rose for the first time in nearly five years, while consumer inflation also beat expectations.

US stocks were also boosted after earnings from some of America’s biggest banks showed profit falls at JPMorgan Chase and Citigroup beat forecasts, while numbers from sales scandal-hit Wells Fargo also surpassed estimates.

A big batch of US data was also being digested, notably a bounce back by US retail sales, which were up 0.6 per cent last month, recovering after August’s decline – which had been the first fall in five months – although the rise was below economists’ forecasts of 0.7 per cent.

Dennis de Jong, managing director at UFX.com, ‘Following a disappointing August, Fed Chair Janet Yellen will be pleased to see retail sales rebound strongly in September.

‘A mixed bag of economic data in recent months has seen the US branded something of a Goldilocks economy, and has persuaded Yellen and her colleagues to stick with the status quo on interest rates.

‘It appears unlikely this will change at next month’s FOMC meeting – which comes just days before the presidential election – but observers are increasingly confident that December will finally bring the long-awaited interest rate hike.’

Other US data today saw the producer price index rise 0.3 per cent last month, above forecasts for a 0.2 per cent gain. 

But the University of Michigan consumer sentiment index’s preliminary reading for October disappointed, falling to 87.9, down from 91.2 last month and below expectations of a 92.0 reading. 

Consumer sentiment fell to a 13-month low as as uncertainty about next month’s US presidential election began to weigh. 

Meanwhile, Fed boss Janet Yellen will give a speech later today which will be scrutinised for hints on the next US rate hike.

Earlier today, Boston Fed President Eric Rosengren said in a media interview that the US central bank may have to be more aggressive in raising interest rates than the measured pace it currently projects.

His comments and the data saw the dollar push higher again this afternoon, with the pound slipping back from an earlier rally, losing 0.4 per cent at $1.2202, although sterling still remained modestly higher against the euro, up 0.1 per cent at €1.1084.

The pound came off earlier lows after Bank of England governor Mark Carney said the Bank was not indifferent to the level of the pound, now down almost 20 per cent since Britain voted to leave the EU in June.

Mr Carney repeated the bank’s traditional line that it did not target a particular exchange rate for the pound, but he added that the level of the pound ‘does matter’ for inflation and the conduct of monetary policy.

12.45: The Footsie pushed higher at lunchtime bolstered by gains from mining stocks thanks to some upbeat Chinese inflation data today, which balanced weak trade numbers from the country yesterday, with US earnings and data awaited.

Around midday, the FTSE 100 index was ahead 61.3 points, or 0.9 per cent at 6,739.1, just off the day’s high of 7,045.09, recovering from three sessions of declines after hitting an intra-day all-time peak of 7,129.83 on Tuesday.

European markets were even stronger, with France’s CAC 40 index up 1.8 per cent and Germany’s Dax 30 index ahead 1.6 per cent helped by some benign eurozone trade data today.

US stock index futures also pointed to a rally today on Wall Street as global markets gained after September producer prices in China unexpectedly rose for the first time in nearly five years, while consumer inflation also beat expectations.

Big news: New York investors will  be focused today on earnings from a trio of big US banks, some key US economic data, and a speech by Federal Reserve chief Janet Yellen

Big news: New York investors will  be focused today on earnings from a trio of big US banks, some key US economic data, and a speech by Federal Reserve chief Janet Yellen

New York investors will also be focused on earnings from a trio of big US banks – JPMorgan Chase, Citigroup, and Wells Fargo – as well some key US economic data – including retail sales and PPI – and a speech by Federal Reserve chief Janet Yellen for hints about the timing of the next US interest rate hike.

Today’s UK data showed construction output dropped by 1.5 per cent month-on-month in August, compared with July’s 0.5 per cent increase, below economists’ estimates for it to be flat.

The Office for National Statistics said year-on-year figures saw construction rise just 0.2 per cent, far below consensus forecasts for a 1.2 per cent jump.

On currency markets, the weak data and ‘Hard Brexit’ fears kept the pound subdued today, although it came off its lows after governor Mark Carney said the Bank of England was not indifferent to the level of the pound, now down almost 20 per cent since Britain voted to leave the EU in June.

Mr Carney repeated the bank’s traditional line that it did not target a particular exchange rate for the pound, but he added that the level of the pound ‘does matter’ for inflation and the conduct of monetary policy.

Against the dollar, sterling was down 0.1 per cent at $1.2242, holding off last week’s 31 year lows. Versus the euro, sterling ticked up 0.3 per cent at €1.1113.

A rally by mining stocks as base metal prices rose on the China inflation data was the main boost for the FTSE 100 index, although weakness in the gold price weighed on precious metal players Fresnillo and Randgold Resources – down 37p at 1,629p and 95p at 6,935p, respectively.

BHP Billiton ahead 2.6 per cent, or 31p at 1,215p and Rio Tinto, up 2.4 per cent, or 62.5p at 2,638.5p, were among the biggest mining gainers having both been blighted yesterday by downgrades from Citigroup.

Insurers Prudential and Standard Life also recovered after falls on the back of broker downgrades yesterday – Pru shares gained 22p at 1,404p and Standard Life added 8.8p at 340.0p.

However, the biggest bounce after falls yesterday came from supermarket giant Tesco, which topped the FTSE 100 leader board with a 4.2 per cent, or 8.1p rise to 203.1p after it settled its pricing spat with household goods chain Unilever which had seen some major products such as Marmite removed from its shelves.

Unilever shares, however, stayed weak – losing 1.1 per cent, or 41.0p at 3,555.5p.

Sub-prime lender Provident Financial was also a blue chip faller, shedding 1.4 per cent, or 43p at 3,036p after it downgraded the current year guidance for its online, short-term loans business Satsuma. Liberum Capital said the Sasuma downgrade, while not material, was slightly disappointing nonetheless

Overall Provident Financial said its performance in the third quarter was in line with management expectations, and the group is confident of its ability to deliver ‘good’ full year results.

But FTSE 100-listed hospital operator Mediclinic jumped 3.8 per cent, or 33.5p to 919.0p after Deutsche Bank raised its rating for the stock to buy and increased its target price to 1,100p from 1,030p.

Meanwhile mid cap Tullow Oil gained 18.0p at 283.4p supported by an upgrade to overweight from Morgan Stanley as well as a firmer oil price – Brent crude was up 0.7 per cent at $52.40 a barrel.

10.15: The Footsie held firm as the morning session progressed as heavyweight mining stocks bounced back thanks to some upbeat Chinese inflation data today, having fallen yesterday after some weak trade numbers from the same country.

Around mid morning, the FTSE 100 index was up 40.0 points, or 0.6 per cent at 6,717.7, just below the session peak of 7,029.36, having closed 46.27 points lower yesterday.

European markets were even stronger, with France’s CAC 40 index up 1.2 per cent and Germany’s Dax 30 index ahead 1.3 per cent helped by benign eurozone trade data.

Bounce back: Around mid morning, the FTSE 100 index was up 40.0 points, or 0.6 per cent at 6,717.7, just below the session peak of 7,029.36, having closed 46.27 points lower yesterday

Bounce back: Around mid morning, the FTSE 100 index was up 40.0 points, or 0.6 per cent at 6,717.7, just below the session peak of 7,029.36, having closed 46.27 points lower yesterday

US stocks ended lower overnight on the China trade data and Federal Reserve rate hike uncertainties, with financial stocks also weak ahead of third quarter earnings today from a trio of banks – Citigroup, JPMorgan Chase, and Wells Fargo.

But Asian stocks bounced higher today, erasing some of the previous session’s losses, as stronger-than-expected Chinese inflation data eased some concerns about the health of the world’s second-biggest economy.

September producer prices in China unexpectedly rose for the first time in nearly five years, while consumer inflation also beat expectations.

Lukman Otunuga, Research Analyst at FXTM, said: ‘Global markets received a pleasant surprise during early trading on Friday following the sharp rise in China’s inflation for September which somewhat countered the anxiety from the dismal trade data.

‘Consumer prices lurched to 1.9 per cent y/y in September suggesting that consumer demand was gaining momentum in China which is supportive of GDP growth. With the developments in China gripping the global economy, there could be an increasing focus on China data as the nation transitions away from manufacturing towards services.’

Investors will also have some key US economic indicators to digest later today, including retail sales and PPI data and the preliminary University of Michigan consumer sentiment report.

Today’s UK data showed that Britain’s construction industry was pummelled in August, as an infrastructure slowdown added further pain to the struggling sector in the wake of the Brexit vote.

The Office for National Statistics said construction output dropped 1.5 per cent month-on-month in August, compared with July’s 0.5 per cent increase, below economists’ estimates for it to be flat.

Year-on-year figures also painted a bleak picture for the sector, with construction only up 0.2 per cent compared with August 2015, far below consensus forecasts for a 1.2 per cent jump.

Meanwhile, Britain’s banks expect muted borrowing demand from businesses in the fourth quarter of the year, the Bank of England’s latest credit conditions survey showed today, as a consequence of the UK vote to leave the European Union in June.

On currency markets, ‘Hard Brexit’ fears kept the UK currency subdued today, with the pound off another 0.2 per cent against the dollar at $1.2223, not far from last week’s 31 year lows. Versus the euro, sterling was flat at €1.1090.

A rally by oil prices provided support for London shares, with Brent crude adding 0.7 per cent at $52.39 a barrel in morning trading after a US government report yesterday showed hefty draws in diesel and gasoline.

Among energy stocks, blue chips Royal Dutch Shell took on 7.5p at 2,184.0p and BP was up 3.4p at 488.4p. Meanwhile mid cap Tullow Oil gained 12.3p at 277.7p, also supported by an upgrade to overweight from Morgan Stanley.

A rally by mining stocks as metal prices rose on the China inflation data was the main boost for the FTSE 100 index.

Rio Tinto, up 2.3 per cent, or 59p at 2.635p, and BHP Billiton ahead 1,9 per cent, or 23p at 1,207p were the best off having both been blighted yesterday by downgrades from Citigroup.

Insurers Prudential and Standard Life also recovered after falls on the back of broker downgrades yesterday – Pru shares gained 25.5p at 1,407.5p and Standard Life added 6.1p at 337.3p.

However, the biggest bounce after falls yesterday came from supermarket giant Tesco, which topped the FTSE 100 leader board with a 3 per cent, or 6.1p rise to 201.1p after it settled its pricing spat with household goods chain Unilever, which had seen some major products such as Marmite removed from its shelves.

Unilever shares, however, stayed weak – losing 1 per cent, or 38.5p at 3,558.0p.

Recently-promoted sub-prime lender Provident Financial was also a FTSE 100 faller, shedding 1.9 per cent, or 58p at 3,021p after it downgraded the current year guidance for its online, short-term loans business Satsuma. Liberum Capital said the Sasuma downgrade, while not material, was slightly disappointing nonetheless.

Overall Provident Financial said its performance in the third quarter was in line with management expectations, and the group is confident of its ability to deliver ‘good’ full year results.

On the second line, hedge fund manager Man Group was the biggest FTSE 350 gainer, jumping 14 per cent, or 15.7p higher to 124.4p after its third quarter asset growth beat estimates and the firm also announced the purchase of US real estate asset manager Aalto Invest Holding.

Man Group also announced plans for a share buyback of up to $100million over the next year and said it will continue to explore more acquisition opportunities. 

08.15: The Footsie pushed higher in opening deals, recovering from a two-session losing streak as Asian markets bounced back thanks to some upbeat Chinese inflation data, which countered weak trade numbers from the country yesterday.

In opening deals, the FTSE 100 index was up 46.0 points, or 0.7 per cent at 6,723.70, having closed 46.27 points lower yesterday as weak China trade data and US rate hike worries weighed on commodity stocks.

US stocks ended lower overnight on the China trade data and Federal Reserve rate hike uncertainties, with financial stocks also weak ahead of third quarter earnings today from a trio of banks – Citigroup, JPMorgan Chase, and Wells Fargo.

But Asian stocks bounced higher today, erasing some of the previous session’s losses, as stronger-than-expected Chinese inflation data eased some concerns about the health of the world’s second-biggest economy.

Rally: Asian stocks bounced higher today, erasing some of the previous session’s losses, as stronger-than-expected Chinese inflation data eased some concerns about the economy

Rally: Asian stocks bounced higher today, erasing some of the previous session’s losses, as stronger-than-expected Chinese inflation data eased some concerns about the economy

September producer prices in China unexpectedly rose for the first time in nearly five years, while consumer inflation also beat expectations.

Naeem Aslam, Chief Market Analyst at ThinkMarkets UK Ltd, said: ‘Chinese inflation data released overnight is gaining a lot of momentum amid traders. This stamps that the deflation period may have come to an end.

‘Rising prices for both consumer and producers was something that the PBOC was trying to trigger for a while because it shows that the economy is fostering.

‘This is a positive sign for commodities, as it confirms a sign of stability for the global demand also. Although if we combine this data with yesterday’s export and import number for China, it paints a cloudy picture. ‘

Investors will also have some key US economic indicators to digest later today, including retail sales and PPI data and the preliminary University of Michigan consumer sentiment report.

The markets will also tune into speeches by Fed Chair Janet Yellen and Boston Federal Reserve President Eric Rosengren for hints about the timing of the next US interest rate hike.

On the domestic front, UK construction output and the latest Bank of England credit conditions survey will be unveiled this morning, although neither are likely to provide any relief for the embattled pound.

On currency markets today, sterling was lower again versus the dollar, down another 0.4 per cent to $1.2199, and was off 0.1 per cent against the euro at €1.1069 as ‘Hard Brexit’ fears kept the UK currency under pressure.

A rally by oil prices also provided support for London shares, with Brent crude up 0.2 per cent to $52.13 a barrel in early trading after a US government report yesterday showed hefty draws in diesel and gasoline.

Stocks in focus in London include:

TESCO/UNILEVER – Britain’s biggest retailer and the Anglo-Dutch consumer goods giant yesterday confirmed that a pricing row between the two had been settled.

PROVIDENT FINANCIAL – The sub-prime lender – recently promoted to the FTSE 100 index – said all of its businesses have traded well in the third quarter of 2016, and the company has produced a profit performance in line with its internal plan

MAN GROUP – The FTSE 250-listed hedge fund manager has reported a jump in third quarter funds under management and announced a deal to buy asset manager Aalto Invest Holding as it prepares to launch a private markets business and conduct a share buyback.

ANGLO AMERICAN – The mining giant is expected to finalise a $1 billion-plus sale of its Australian coal assets to a group headed by private equity group Apollo Global Management in the coming weeks, three sources with knowledge of the deal have told Reuters.

WILLIAM HILL – A leading investor in the betting firm, Parvus Asset Management has said it would oppose any reverse takeover of Canadian firm Amaya, given its ‘limited strategic logic’.

UK company news scheduled today includes:

Trading updates: Provident Financial, Man Group, Rank Group, Ashmore Group

Finals: Inland Homes

Economic news scheduled today includes:

UK construction output at 9.30am

BoE Q3 credit conditions survey at 9.30am

eurozone trade balance at 10am

US retail sales at 1.30pm

US PPI at 1.30pm

UMich preliminary business sentiment index at 3pm

 

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