Global trade optimism boosts FTSE 100; Plus500 tanks

The FTSE 100 was up 0.4 per cent. — Reuters pic
The FTSE 100 was up 0.4 per cent. — Reuters pic

LONDON, Feb 12 — Britain's FTSE 100 rose today as a stronger dollar boosted big banks and other companies that derive much of their revenue from overseas, in a broad-based equity rally across Europe.

Trading platform Plus500, however, plunged by more than 30 per cent after warning it would miss results expectations due to a regulatory crackdown.

The FTSE 100 was up 0.4 per cent, with optimism over prospects for U.S.-China trade talks this week also spilling over to Europe, after lifting markets in Asia and on Wall Street.

Banks and consumer staples, which make a big chunk of their money abroad, led the gains, and oil majors also gained on the back of higher crude prices.

Market sentiment was also lifted after U.S. lawmakers struck a tentative agreement to avert another government shutdown.

Industrial stocks helped the FTSE 250 move 0.2 per cent higher, but gains were capped by Plus500's plunge, which accounted for a 30-point drop on the index.

Plus500 lost more than a third of its value after the online trading platform forecast 2019 results will be below market expectations, hurt by a regulatory crackdown in the European Union on the sale of certain financial products to retail clients.

The stock was last down 30 per cent, on track for its worst day in more than three-and-a-half years, and dragged rival IG Group down 5 per cent.

Investors were also cautious ahead of a parliamentary address by Prime Minister Theresa May later in the day as she struggles to seal a Brexit deal.

"There is continued optimism that some sort of a deal will be reached even though we have no concrete reason to believe that is going to be the case," said CMC Markets analyst David Madden.

"Some people are suggesting that May is intentionally running down the clock and trying to coerce some of her MPs into voting for her deal just because it might be better than no-deal," Madden added.

On the blue chip index, miners rose after Goldman Sachs said European commodities and mining equities were "attractively positioned".

Tour operator TUI , which has slumped since a profit warning last week, was down 4 per cent as its first-quarter underlying loss widened.

Small-cap retailer Debenhams shot up 38 per cent after it secured additional funding from lenders as it struggles to find a longer-term solution to its financial woes.

"While this (refinancing) takes away the immediate pressure and provides a short respite, we believe Debenhams is likely to move forward with a CVA (credit valuation adjustment) in order to reduce its lease commitments and store numbers," said John Stevenson, retail analyst at Peel Hunt. — Reuters

Related Articles