LSE 2017-end rally with new record highs

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Another day of record-breaking on Friday, the half-day session being the last trading day of 2017, with fresh highs for both the FTSE 100 and FTSE 250 while the AIM All-Share Index traded around its highest level since 2008, London Stock Exchange (LSE) reported.

The FTSE 100 index closed up 0.9%, or 64.89 points at 7,687.77 on Friday, having hit an all-time high of 7,697.62 earlier in the session. The FTSE 100 ended 2017 up 7.8%, aided by an impressive 4.9% rally during December.

The FTSE 250 index ended up 0.4%, or 83.95 points, at 20,726.26, just below the record high of 20,734.71 it posted earlier on Friday. The FTSE 250 ended 2017 up 15%.

The AIM All-Share index ended up 0.4%, or 4.58 points, at 1,049.63. The index hit an intraday high of 1,049.41, just below the nine-year high of 1,049.82 reached earlier in 2017, and ended 2017 year up 24%.

The BATS UK 100 index closed up 1.0% at 13,072.25. The BATS 250 closed up 0.6% at 18,898.94, and the BATS Small Companies closed up 0.2% at 12,710.93.

On the continent, the CAC 40 stock index in Paris was down 0.3% while the DAX 30 in Frankfurt was down 0.4% at the London equities close.

Sterling was quoted at USD1.3515 at the close on Friday, higher than USD1.3442 late Thursday as the dollar continued its year-end sell off.

The pound has risen by around 9% in the year-to-date, in September reaching its highest level since the vote to leave the EU in 2016, of USD1.3658. However, this follows a 16% drop in sterling against the dollar in 2016.

The euro was quoted at USD1.1990 at the London close on Friday, up from USD1.1948 at the same time on Thursday as it was also aided by a weaker dollar.

Stocks in New York were called for a higher open on Friday, with the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 index all seen up 0.3%.

The Dow Jones closed up 0.3% at 24,837.51 on Thursday, and traders will be watching to see if the index – which lists the likes of Apple, Boeing and Walt Disney as its constituents – can cross the 25,000 mark before the end of the year. It is up 26% in the year-to-date.

In US company news on Friday, Goldman Sachs said it estimates the enactment of tax reform will result in a reduction of about USD5 billion in the firm’s earnings for the fourth quarter and year ending December 31, 2017, approximately two-thirds of which is due to the repatriation tax.

The remainder includes the effects of the implementation of the territorial tax system and the remeasurement of US deferred tax assets at lower enacted corporate tax rates.

On the London Stock Exchange on Friday, miners such as Rio Tinto, BHP Billiton and Antofagasta ended among the best performers, up 2.2%, 1.5%, and 1.3%, respectively, as copper remained around its best levels since 2014. The FTSE 350 mining sector index closed up 1.2%, the best performing sector.

London-listed gold miners also closed higher on Friday, with blue-chips Randgold Resources up 2.1% and Fresnillo up 2.8%. Midcap gold miner Acacia Mining ended up 4.2%.

Gold was quoted at USD1,296.51 an ounce at the London equities close Friday against USD1,294.58 at the close Thursday, boosted by a weaker dollar.

Brent oil was quoted at USD66.24 a barrel at the London equities close Friday, up from USD65.88 late Thursday.

Midcap Wizz Air Holdings ended up 3.0% after the budget central and eastern European-focused airline agreed to buy 72 Airbus A320neos and 74 Airbus A321neos, for delivery between 2021 and 2026.

The order is valued in excess of USD17.2 billion, at current prices, but Airbus has “granted significant discounts from list prices”, Wizz Air said.

These aircraft will enable Wizz Air to renew its existing fleet and provide additional capacity for further growth. Airbus’ A320neo Family aircraft provide additional efficiencies that will enable Wizz Air to offer even lower fares to the market and will ensure Wizz Air maintains its young, efficient, industry leading fleet,” Wizz Air said in a statement.

Balfour Beatty closed up 1.4%. The infrastructure firm sold a further 7.5% stake in Connect Plus, which operates the London’s M25 orbital motorway, for GBP62 million to funds managed by Dalmore Capital just a week after initially divesting a 13% interest in the firm.

The latest stake sale is expected to generate a profit of GBP32 million for Balfour Beatty, which will be used to pay down borrowings in 2018. The expected profit on disposal from the transaction is GBP32 million.

FTSE 100-listed drugmaker AstraZeneca ended up 2.4% after JPMorgan raised the firm to Overweight from Neutral.

The star performer on the FTSE 100 this morning has been Just Eat, rising 2.7% as investors look to benefit from a week in which takeaway consumption has risen. People, understandably, are rather tired of turkey, and Just Eat is ideally placed to benefit,” said IG chief market analyst Chris Beauchamp.

Just Eat closed up 2.8%, the third best performer in the FTSE 100. Shares in the online takeaway firm have risen 34% over 2017, a promotion to the FTSE 100 in November’s index review rounding off a strong year for the firm.

NMC Health was also one of 2017’s success stories, having been bumped up into the FTSE 100 following August’s index review, and rallying 84% in the year-to-date. The firm recently said it is comfortable 2017 guidance, and plans to expand its geographic footprint by targeting wider emerging markets.

Shares in midcap online grocer Ocado Group rose 54% in 2017, helped by news in November it had signed a long-awaited international deal with France’s Groupe Casino to develop a customer fulfilment centre to serve the Greater Paris area, Normandy, and the Hauts-de-France region.

Among companies who had a 2017 to forget were support services firm Carillion and Provident Financial, the latter dropping an eye-watering 66% in one day alone after the subprime lender announced the deterioration of its Home Credit business, an investigation into an ancillary product offered by its Vanquis Bank business, and the scrapping of its interim dividend.

Carillion has seen 93% of its value wiped off its market capitalisation this year, crashing out of the FTSE 250 in the August index review. In November, the firm warned full-year profit would be “materially” lower than expected. This marked its third profit warning in five months.

It issued its first profit warning in July when it warned it would need to issue a huge GBP845.0 million provision against its contracts. In response, Carillion cut its generous dividend and Chief Executive Officer Richard Howson resigned.

A further blow was dealt in September when “disappointing” half year results saw it sink to a pretax loss of GBP1.15 billion from a profit of GBP84 million the year prior amid further impairments.

Midcap Acacia Mining was marred with problems in Tanzania throughout the year, down 47% in 2017. The gold miner was hit by the government’s decision in March to ban exports of gold and copper concentrate out of Tanzania.

Since March, the government has alleged the miner of stockpiling concentrate containing up to 10 times the amount of minerals declared by the firm, as well as under-declaring revenue and tax payments over “a number of years”.

Dixons Carphone saw its share price slide 43% in 2017. The mobile phone and electronics retailer in August warned on profit for its current financial year, due to challenges in the UK postpay mobile phone market, changes to EU roaming legislation, and changes to the way it has decided to sell certain products.

Among AIM-listed stocks, Keywords Studios saw its share price nearly triple over the course of the year, having acquired a host of firms in 2017, including animation firm Spov, application and tool developer XLOC, US-based video game developer GameSim and China-based video game art producer Red Hot.

Tonic water supplier Fevertree Drinks saw another strong share performance in 2017, with the stock doubling over the year, and nearly four-fold higher since the start of 2016. Most recently, the firm announced it has established a new office in North America, in an effort to expand presence in the US.

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