Primark owner Associated British Foods rallied to its highest level in more than three months after Jefferies upgraded its rating less than a week before it publishes its half-year results.

The US investment bank lifted its rating to “buy” from “hold” and hiked its price target from £24.50 to £31 citing continued strength in its sugar business and an expected turn in Primark’s margins later this year.

Analyst James Grzinic believes the timing of the upgrade is “favourable” as the group’s half year results on April 19 should confirm strong results thanks to a foreign exchange translation boost and a sugar rebound.

“We also expect a more assure message on the Primark margin outlook,” he added.

Separately, Credit Suisse reiterated its “outperform” rating as it believes Primark is still very much in its infancy outside the UK. In its wake, the FTSE 100 stock touched £27.23, its highest level since January 3, before easing back in afternoon trade to close 94p, or 3.6pc, higher at £27.09.

South African private hospital operator Mediclinic was also among the risers, up 23p to 759.5p, on the back of its full-year trading update. Despite challenging conditions in its Middle East market, its underlying profit margin in the region is expected to be slightly ahead of the previous guidance at 10.5pc-11.5pc.

Gold miners also made solid gains as the precious metal rallied to a five month high after US President Donald Trump talked down the dollar. Randgold Resources nudged up 115p to £75.40, Fresnillo added 25p to £16.41, mid-cap Centamin climbed 9.2p to 190.5p and Acacia Mining rose 24p to 493.4p.

Elsewhere, Provident Financial eked out gains of 22p to £31.23 following a price target upgrade from broker Canaccord Genuity, while Royal Mail edged up 4.9p to 424.1p after it announced plans to close its defined benefit pension scheme in March 2018.

On the wider market, the FTSE 100 drifted 21.4 points, or 0.29pc, lower to 7,327.59 as a number of stocks were hurt by trading ex-dividend. Reckitt Benckiser fell 48p to £74.44, Standard Life dropped 8.9p to 368.7p, esure lost 6.6p to 241.3p, Savills surrendered 20p to 929p and Travis Perkins closed down 6p at £15.44.

Banking stocks also slipped into the red as investors digested first quarter earnings from their US counterparts. HSBC tumbled 11.4p to 643.9p, Standard Chartered was off by 11.9p at 709.5p, Royal Bank of Scotland fell 3p to 228.4p and Barclays finished 1.1p lower at 212.7p.

Meanwhile, a day after Tesco reported its first annual increase in underlying sales in its UK business for seven years, Morgan Stanley cut its price target from 200p to 195p, causing shares to slide 2.9p to 181.5p.

Energy supplier Centrica also came under pressure, down 3.1p to 216.3p, as City analysts warned the group could face a more than £100m hit this year after it extended an outage at its Rough storage field in the North Sea on Wednesday.

Away from the blue chips, PZ Cussons said its full-year outlook was in-line with expectations, lifting shares 10.1p to 339.6p. while recruiter Hays  forecast operating profit for the year would be at the top end of market consensus of £199-209m. The FTSE 250 stock rose 2.1p to 170.3p.

Finally, robot automation specialist Blue Prism climbed 89p, or 18.6pc, to 567p as it expects full-year results to be significantly ahead of market expectations after it signed 151 deals in the five months to March.

With that, it’s time to finish up. Thanks for following our markets coverage, we’ll be back next Tuesday from 8.30am. 

European bourses end the week lower

European bourses ended the week in negative territory as rising geopolitical tensions dominated the last four trading sessions. Banking stocks also weighed on bourses in the region.

By close of play:

  • FTSE 100: -0.29pc
  • DAX: -0.41pc
  • CAC 40: -0.69pc
  • IBEX: -0.38pc
Joshua Mahony, of IG, said: “In a week where Donald Trump has been seemingly fighting pushing back against both the Russia-Syria and China-North Korea relationships, there is no wonder we have seen geopolitical fears dominate the agenda.
“With the long weekend ahead in the UK, there is certainly an element of position unwinding given the unwillingness of traders to hold anything going into the weekend. Donald Trump seems to have generated a more volatile and unpredictable market since his inauguration, as evident this week. While that is a positive for many traders, who thrive off volatility, it is also reducing the willingness of traders to hold any positions into a weekend (especially a four-day one).”

Dollar regains ground after Trump’s comments on currency

The US dollar rebounded this afternoon after languishing in the red earlier following Trump’s remarks about the currency the previous day.

In an interview with the Wall Street Journal, the US President said the dollar is “getting too strong” and that he would like to see interest rates remaining low.

After slumping 0.6pc in intraday trade, the dollar recovered against a basked of major currencies, rising some 0.3pc.

It followed robust macro economic data from the US, while trading was also thinner than usual due to the impending Good Friday holiday.

Drax shareholders stage revolt over executive pay boom

Shares in Drax edged up 0.4p to 317.9p after a third of investors opposed its remuneration report. Jillian Ambrose has the details: 

The board of energy giant Drax suffered a bloody nose at the hands of shareholders left angered by executive pay hikes while their dividends face an overhaul.

Over a third of shareholders voted down the £1.6m pay packet for group chief executive Dorothy Thompson last year, which is 27pc higher than her total pay in 2015.

The shareholder revolt follows a 17pc market slide for the FTSE 250 generator’s shares this year as it grapples with a billion pound strategy to protect the group from further energy  market and policy woes.

The owner of Britain’s largest power plant – which burns both coal and waste-wood biomass pellets to create electricity – told investors earlier this year that it would consult on changes to the payout policy after it was left battered by depressed electricity market prices and a cut to green energy scheme revenue

Read the full story here

Trump on China and currency maniupulation

Here’s a useful timeline of Trump’s comments on China and currency manipulation in light of his interview with the Wall Street Journal:

US consumer sentiment unexpectedly improves in early April

US  consumer sentiment unexpectedly strengthened in early April as consumer optimism on current economic conditions climbed to its strongest level since November 2000, a private survey released this afternoon showed.

The University of Michigan Surveys of Consumers said its preliminary April consumer sentiment index rose to 98.0, up from a final March reading of 96.9. Analysts polled by Reuters had forecast a reading of 96.5.

Report from Reuters

Gold hits five-month high; heads for best week since June last year

Gold rallied to a five-month high today and is now on track for its best week since June last year after comments from US President Donald Trump put the dollar under pressure.

Credit: Reuters

In an interview with the Wall Street Journal, Trump said the dollar is “getting to strong” and that he would like to see interest rates remain low.

Meanwhile, rising geopolitical tensions have also prompted a rush on safe haven assets such as gold.

The precious metal rose 0.1pc to 1,2856.87.