The US Federal Reserve raised its interest rate from 0.75% to 1% on Wednesday, which investors perceived it as a dovish signal the Fed is going to tighten monetary policy cautiously as the economy improves.
The FTSE 100 hit a new record high as it jumped by 0.9% to 7,437.
The dollar weakened and pushed up commodity prices. Miner Antofagsta (ANTO) and Mexico’s second biggest gold producer Fresnillo (FRES) climbed 4.9% and 5.7% respectively.
Oil prices were also up by 1%, helping Royal Dutch Shell (RDSB) rally by 2%.
Gold increased by nearly 2% to $1,222 per ounce and copper was up 1% to $5,908 per tonne.
The interest hike went down well with US markets as the Dow Jones and S&P 500 were up 0.5% and 0.8% on Wednesday.
In Hong Kong, the Hang Seng gained 2% on Thursday after the country raised its own interest rate, while other markets in Asia shrugged off the widely expected US rate rise.
FTSE 100 RISERS AND FALLERS
Supermarket giant Sainsbury’s (SBRY) cheapened 0.8% on a disappointing fourth quarter trading statement. The results revealed like-for-like retail sales declined 0.5% in its supermarkets business in the nine weeks to 11 March, a setback after a 0.1% rise in the third and Christmas quarters.
CEO Mike Coupe’s acquisition catalogue brand Argos delivered strong results as like-for-like sales rose 4.3%, boosted by strong mobile phone, wearable technology and video game sales.
Legoland operator Merlin Entertainment (MERL) fell 4% as Berenberg changed its recommendation from ‘hold’ to ‘sell.’
Miner Anglo American (AAL) sparked 8.3% after Volcan Investments took a 12% stake in the company, worth $2.4bn, on Wednesday. FTSE 250 RISERS AND FALLERS
Specialist lender OneSavings Bank (OSB) failed to rally despite full year results revealing underlying pre-tax profits of £137m. This represented 29% year-on-year growth, which was 6% ahead of the consensus of analysts’ estimates.
Public services provider Serco (SRP) was the preferred bidder to run the New Grafton Correctional Centre in Australia, causing the shares to rise 2%. It was announced that the deal is for 20 years from 2020 and worth £1.6bn.
SMALL CAP RISERS AND FALLERS
Allergy Therapeutics (AGY) announced the recruitment of its first patient in its Phase III study B301 to evaluate the efficacy and safety of Pollinex Quattro Birch, a treatment for allergic rhinitis.
Nyota Minerals (NYO) terminated the acquisition of Bigdish Ventures ‘by mutual consent’ and its loan of £200,000 from Bigdish will be repaid. A third of Nyota’s value was wiped off as investors ran for the exit.
Nyota wasn’t the only one to ditch deals as the UK’s largest machine tool firm 600 (SIXH) was notified by Haddeo Partners that discussions with Disruptive Capital Investment were terminated. The stock plummeted 17%.
Healthcare software supplier EMIS (EMIS) disappointed the market as annual numbers showed slower growth due to NHS cutbacks, as the stock retreated 2%.
Capital Drilling (CAPD) remained in the red for 2016, despite a return to top line growth amid improving conditions in the gold sector. A dividend cut and news Capital Drilling will invest up to $3.8m for a 50% stake in laboratory testing services firm A2 weighed on investor sentiment and dragged the stock 4.7% lower.
Driver monitoring system designer Seeing Machines (SEE) unveiled a swing to heavy losses in its half year results. Management said it was a transitional year involving heavy investment in its technology platform and slower-than-expected sales in the fleet market. The stock was marked 13.4% lower on the news.
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