MARKET CLOSE: Export strength fortifies UK equities

LONDON markets staged a rebound as figures showed Britain’s trade deficit fell sharply in January and Bank of England governor Mark Carney made a dovish speech on rates.

Bank of England governor Mark Carney. Picture: PA

Alastair McCaig, market analyst at IG, said: “Carney has voiced his fears that the twin issues of low inflation and a strong pound could force the delay in the start of any proposed rise in interest rates for the UK.

“Currency traders have been pushing the start date for interest rate rises further down the road for some time and these comments will ensure that this mindset stays in place for a lengthy period.”

Meanwhile trade figures showed British exporters making gains despite the strength of sterling. The FTSE 100 was up 39.56 points at 6,761.07.

AstraZeneca was the biggest blue chip riser, adding 4 per cent to 4,479p after broker UBS issued a positive note about upcoming trials of a new drug, which analysts said had “multi-billion dollar potential”.

Others in the sector were also given a shot in the arm. Shire was up 145p at 5,455p and Hikma Pharmaceuticals added 112p or 5 per cent at 2,355p, a day after strong results ensured it would enter the FTSE 100 in style at the end of this week.

The firm it will replace, on the other hand, continued to slide: Tullow Oil suffered as crude prices. trended lower and was 10.4p off at 308.2p.

Amid a busy session for corporate updates, supermarket chain Morrisons rose 1.1p to 207.6p despite posting a drop in underlying profits, as it highlighted an improved performance in the most recent quarter.

Outside the top flight TSB was the main talking point as shares leapt 23 per cent, up 62p to 326.1p, as it confirmed a tentative offer from Spanish peer Sabadell. Lloyds Banking Group, which still has a 50 per cent stake in TSB, lifted by 2p to 79.2p.

SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING

• Get the latest business headlines from a variety of news sources emailed to your inbox each morning