28th Mar 2019 12:12
LONDON (Alliance News) - UK shares traded higher Thursday midday, with the FTSE 100 index boosted by gains for tobacco stocks and for chemicals firm Johnson Matthey, while the general market mood was buoyant on US-China trade talk hopes.The large-cap measure was up 33.94 points, or 0.5%, at 7,228.13 Thursday midday. The FTSE 250 was up 27.25 points, or 0.1%, at 18,920.99, while the AIM All-Share index was up 0.3% at 913.11.The Cboe UK 100 index was up 0.6% at 12264.5. The Cboe UK 250 was up 0.2% at 16966.55, and the Cboe UK Small Companies up 0.2% at 11139.08.In mainland Europe, the CAC 40 index was down 0.1% in Paris and the DAX 30 in Frankfurt was up 0.1%.In the US, stocks are on course for a higher start with the Dow Jones called up 0.2%, the S&P up 0.1% and the Nasdaq Composite up 0.1%. They had closed down 0.1% to 0.6% on Wednesday."European stocks are on the surge this morning, with renewed hopes of a US-China trade breakthrough helping drive bullish sentiment. As we commence two days of trade talks in Washington, US officials are noting the progress achieved across the board, with China seemingly budging on the topic of forced technology transfer," said Joshua Mahony, senior market analyst at IG.Chinese Premier Li Keqiang on Thursday promised to further open the Chinese market to foreign firms, just as US and Chinese teams were about to resume negotiations in a protracted trade war."We treat domestic and foreign-funded enterprises equally and protect the rights and interests of all types of businesses," Li said at the opening of the Boao Forum for Asia, an economic conference held on the southern Chinese island of Hainan. Li promised that a "negative list" of sectors in which foreign investment is being restricted will be revised by the end of June. Industries that will further open up include telecommunications, education, transportation and energy, he said.Li said it was "the consistent stance of the Chinese government" to strengthen the protection of intellectual property rights - one of several sore points at the centre of a trade war between China and the US.A US trade delegation led by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrived in Beijing Thursday afternoon for two days of negotiations aimed at resolving the trade tensions between the two countries.To come in the economic calendar on Thursday is the final estimate of fourth quarter US GDP at 1230 GMT. In the UK, the Brexit saga continues after UK members of Parliament voted against all eight Brexit alternatives put before them on Wednesday, and House of Commons speaker John Bercow warned Prime Minister Theresa May is not guaranteed to be allowed a third meaningful vote on her deal.Labour former minister Margaret Beckett's proposal for a public vote before ratification of any Brexit deal polled the highest number of votes among MPs, while Tory Father of the House Ken Clarke's customs union plan was defeated by the lowest majority.Motions linked to no deal, a new version of the common market, membership of the European Economic Area and rejoining the European Free Trade Association, Labour's alternative proposed customs union, revoking Article 50, and the government seeking preferential trade arrangements with the EU were defeated by wider margins."Time is running out, and with the DUP expected to send Theresa May's deal to a third defeat, markets are caught between the GBP positive option of an extension or revocation of A50, and the GBP negative threat of a no-deal Brexit," commented IG's Mahony.The pound was quoted at USD1.3111 midday, down from USD1.3222 at Wednesday's market closeThe latest Brexit twists come as the chief executive of the Society of Motor Manufacturers & Traders warned of a risk to British car manufacturing in the event of a no-deal Brexit.Figures from the SMMT showed that 123,203 units were produced in February, down 15% on a year ago. In the year-to-date, 243,852 vehicles have been produced, down 17% on a year ago.Weaker demand in key markets continued to knock output, the SMMT said, with exports to China slumping 56% and cars to the US falling 2.8%. Production for the EU, the UK's biggest customer, fell 15%."The ninth months of decline for UK car production should be a wakeup call for anyone who thinks this industry, already challenged by international trade hostilities, declining markets and technological disruption, could survive a 'no deal' Brexit without serious damage," said SMMT Chief Executive Mike Hawes. "A managed no-deal is a fantasy." On the London Stock Exchange, tobacco majors Imperial Brands and British American Tobacco traded up, boosting the FTSE 100 following upgrades from analysts at Citigroup.At midday, Imperial was up 1.8% while BAT was up 1.7%. Citigroup raised its rating on both stocks to Buy from Neutral.Johnson Matthey was also a mover, rising 2.3% after reaching "major milestones" in the commercialisation of its portfolio of ultra-high energy battery cathode materials.The platinum and speciality chemicals company secured a site in Poland for the construction of a commercial plant for eLNO - its portfolio of ultra-high energy battery cathode materials - with room for "significant" expansion. Johnson Matthey also has secured a supply of lithium via a long-term agreement with Nemaska Lithium.BHP shares made strides as well, rising 1.3% after Bloomberg reported the miner is mulling buying Bluewater, a Gulf of Mexico-focused oil exploration joint venture.BHP is one of a number of bidders, Bloomberg said, for a company which would fetch between USD1.5 billion and USD2 billion.In the FTSE 250, Sabre Insurance fell 2.8% as annual profit rose but the firm's combined ratio worsened.The car insurer reported an 11% increase in pretax profit to GBP61.4 million from GBP55.5 million the year before.Sabre's total income increased 1.6% in 2018 to GBP194.9 million from GBP191.8 million in 2017. The company's gross written premiums were flat in 2018 at GBP210.0 million, with net earned premiums rising slightly to GBP188.2 million.The net loss ratio in 2018 increased to 48.5% from 46.5% the year before with Sabre's combined operating ratio worsening to 70.6% from 68.5%.A ratio below 100% indicates that an insurer is making underwriting profit, while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums, so the lower the better.Debenham shares slumped, down 17% to 2.25 pence at midday following a majority of its noteholders agreeing to the amendments proposed last week, allowing the department store operator to proceed with a proposed GBP200 million fundraise.The conclusion of the solicitation process suggests a potential end to Sports Direct International's plans to acquire the struggling retailer.Sports Direct, which holds a 29% stake in Debenhams, on Wednesday priced a potential offer for the remaining shares of Debenhams it does not hold at 5p each, valuing the firm GBP61.4 million.The offer, however, was conditional on on Debenhams terminating the noteholder consent solicitation process as well as appointing Sports Direct boss Mike Ashley to its own board in the role of chief executive officer.Sports Direct shares were up 0.3% at midday.By Lucy Heming; [email protected]; additional reporting by Idris Nur; [email protected]
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DebenhamsJohnson MattheyBritish American TobaccoSports DirectImperial BrandsBHP GroupSabre Insur