LONDON MARKETS: FTSE 100 Logs Record Closing High

By Carla Mozee, MarketWatch

Pound falls on BOE economist's rate comments

LONDON (MarketWatch) -- U.K. stocks closed at a record high on Thursday, aided by gains for the benchmark's resource companies and drug makers.

After a choppy session, the FTSE 100 gained 0.3% to close at 6,962.32, cruising above its previous record high of 6,961.14 (http://www.marketwatch.com/story/ftse-100-wobbles-as-aviva-rises-admiral-falls-boe-statement-on-tap-2015-03-05).

The advance added to an upbeat session from Wednesday (http://www.marketwatch.com/story/ftse-100-higher-ahead-of-jobless-data-budget-2015-03-18), when Chancellor of the Exchequer George Osborne revealed a series of business-friendly measures, including tax cuts to the U.K.'s struggling energy sector.

Oil companies rose on the news on Wednesday and continued to climb on Thursday with shares of BP PLC (BP) up 1.1%, Royal Dutch Shell PLC (RDSB) 1% higher and BG Group PLC gaining 1.3%.

Mining companies also helped lift the U.K. benchmark, tracking solid gains for metals (http://www.marketwatch.com/storyno-meta-for-guid) that got a boost from an overnight drop in the dollar. Fresnillo PLC put on 5.4%, Randgold Resources Ltd. gained 3.2%, BHP Billiton PLC (BHP) rose 1.9% and Rio Tinto PLC (RIO) added 0.5%.

The dollar had dropped as investors were considering the Federal Reserve's policy statement and the prospect that U.S. interest rates may stay low for longer period. The dollar has recovered ground against major rivals on Thursday (http://www.marketwatch.com/story/dollar-recoups-some-post-fomc-losses-against-yen-euro-2015-03-19).

Meanwhile, the pound (GBPUSD) fell below $1.48 after the Bank of England's Chief Economist Andrew Haldane suggested a rate cut may be needed to fend of the risks of deflation. The pound was buying $1.4732, down from $1.4980 late Wednesday.

If a policy change "were required, given the asymmetry of inflation risks, I think the chances of a rate rise or cut are broadly evenly balanced," Haldane said in prepared remarks for a speech at the Biz Club in Rutland. "In other words, my view would be that policy may need to move off either foot in the immediate period ahead, depending on which way risks break."

Other movers in London on Thursday included AstraZeneca PLC (AZN), which rose 0.8% after the drug maker said it will partner with the U.S. unit of Daiichi Sankyo Co. to launch constipation drug Movantik in the U.S. early next month. The deal is potentially valued at up to $825 million.

Apparel retailer Next PLC was at the bottom of the FTSE 100. Shares fell 4% as the company said it remains "very cautious in our sales budgets" (http://www.marketwatch.com/story/next-cautious-for-current-year-despite-profit-rise-2015-03-19-44851037) although the consumer economy looks benign.

Next shares closed at an all-time high on Wednesday at GBP76.20, according to FactSet data.

Credit Suisse said Next's comments about its sales budgets and collections "is a surprise" as it had only "expected the tone of the outlook statement to be somewhat muted in terms of the UK macro outlook, but not on execution." The broker said it remains neutral on Next.

Also pulling lower on Thursday was British American Tobacco PLC , falling 0.7% as its shares traded without dividend rights.

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