12th Feb 2019 11:59
LONDON (Alliance News) - London stocks continued their good start to the week on Tuesday, with the FTSE 100 rising despite a drag from tour operator TUI.The FTSE 250 was also managing to eke out some gains even as Plus500 shares slid a third on a profit warning for 2019.London's blue-chip FTSE 100 was 22.38 points higher, or 0.3%, at 7,151.49 at midday. The FTSE 250 was up 33.36 points, or 0.2%, at 18,865.14, and the AIM All-Share was up 0.2% at 907.10.The Cboe UK 100 was up 0.2% at 12,141.17, while the Cboe UK 250 was up 0.1% at 16,828.82 and the Cboe UK Small Companies up 0.1% at 11,156.37.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 1.2% and 1.3% respectively at midday."European markets are on the rise in early trade, with the optimism seen throughout the Asian session transitioning into Europe. A significant amount of global sentiment rests on Donald Trump's shoulders, with the ability to break the deadlock in talks with China and avert another government shutdown key for market direction," said IG senior market analyst Joshua Mahony."This week represents another chance for the US and China to find some form of compromise, with less than three weeks until the reimposition of harsh tariffs on Chinese goods," Mahony continued. "Much of the optimism we have seen in global markets overnight and into this morning centres around the Chinese optimism that a deal could be done in time."Stocks in the US are pointed to a higher open on Tuesday, with the Dow Jones called up 0.7%, the S&P 500 up 0.6% and the Nasdaq set to rise 0.8%.US media reported that a group of Republican and Democratic senators said Monday they had reached an agreement in principle on funding the government ahead of a looming deadline that threatens a second partial government shutdown.Lawmakers face a February 15 deadline to fund the government but negotiations have stalled over President Donald Trump's demand for USD5.7 billion to build a wall along the border with Mexico, which Democrats have rejected.If the deadline is not met, the government will likely partially shut down again, forcing hundreds of thousands of federal workers to work without pay or go on furlough.Trump agreed to fund the government for three weeks to allow for negotiations after no progress was reached during the longest federal shutdown in US history, which ended on January 25.The dollar was higher on the funding agreement newsflow. The pound was quoted at USD1.2846 at midday, down from USD1.2864 late Monday. To come in Tuesday's economic calendar is the US Redbook index at 1355 GMT, JOLTS job openings at 1500 GMT and API weekly crude oil stocks at 2130 GMT.In London, travel operator TUI fell 3.2% after revealing its first quarter loss significant widened, with the update coming less than a week after a surprise profit warning. The German travel firm's pretax loss for the three months to December stood at EUR135.0 million, versus EUR84.3 million loss the same period a year prior. Revenue did increase, however, by 4.4% year-on-year to EUR3.70 billion. "The main reasons for the decline in earnings included the unusually long and hot summer in Northern Europe," said TUI."In addition, strong bookings to Turkey and North Africa caused overcapacity in other destinations such as the Canary Islands, which went hand in hand with lower margins in the tour operating business. At the same time, the British pound remained weak as a result of the Brexit decision."On Wednesday last week, TUI said "extraordinarily" hot weather during the summer of 2018 mean earnings for its year ending September 2019 will be flat year-on-year. IG's Mahony commented: "Fresh off the back of a profit warning last week, the impact of common denominators such as weather and value of the pound has got the rest of the airlines spooked, with easyJet and IAG joining TUI in the red."easyJet was down 1.1% at midday, while British Airways owner International Consolidated Airlines was down 0.8%.At the top of the index was fashion house Burberry, 1.6% higher in a positive read-across from luxury goods firm Kering.The owner of Gucci and Yves Saint Laurent said it saw an "excellent" year in 2018 with comparable revenue up 29% to EUR13.7 billion, including a 34% rise in Asia-Pacific sales.Limiting the FTSE 250's gains on Tuesday was a 33% drop for Plus500 after the contracts-for-difference provider posted a strong annual performance for 2018 but issued a profit warning.For 2018, Plus500 nearly doubled its pretax profit to USD503.0 million from USD253.4 million in 2017. The company's revenue jumped 65% to USD720.4 million from USD437.2 million.However, Plus500 said 2019 revenue is expected to be lower than current market expectations following its latest assessment of European Securities & Markets Authority regulatory measures.The company also lowered its profit guidance due to the lower revenue and planned higher marketing spend, saying 2019 profit will be "materially lower than current market expectations".The update knocked online trading peers in a negative read-across, with fellow mid-cap firm IG Group down 5.4% and CMC Markets 1.4% lower.Drugmaker Indivior was down 3.1% after a US court denied the company's stay appeal on a previous ruling vacating an injunction against Indian pharmaceutical company Dr Reddy's Laboratories.Dr Reddy's has been developing a generic buprenorphine/naloxone treatment, based on Indivior's Suboxone, with Indivior trying to halt development in court. Indivior believes that if Dr Reddy's launches its generic product, it will lose up to 80% of its market share "within a matter of months".Suboxone is a treatment for opioid addiction, taken either under the tongue, by injection, as an implant, or as a skin patch.The US Court of Appeals for the Federal Circuit has denied Indivior's motion to stay issuance of the mandate following its ruling vacating the preliminary injunction granted against Dr Reddy's based on Indivior's US patent.Elsewhere on the Main Market, struggling department store Debenhams climbed 32% as it secured an extension to its credit facilities and inked a sourcing partnership with Li & Fung, a Hong Kong-based supply chain manager primarily for US and EU retail chains.The retailer has agreed a new GBP40 million credit facility for 12 months with its existing lenders, it said. The new loan fully utilises permissions within the terms of the company's current revolving credit facility and loan notes.
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BurberryInternational AirlinesDebenhamsPlus500IndivioreasyJetTUI.L