29th Mar 2019 12:30
LONDON (Alliance News) - London share prices were higher at midday Friday, with the FTSE 100 lifted by mining stocks amid optimism over US-China trade talks and despite significant hits to blue-chip shares TUI and AstraZeneca.The FTSE 100 index was up 0.4%, or 26.45 points, at 7,260.78. The FTSE 250 was up 0.5%, or 93.06 points, at 19,001.65, and the AIM All-Share up 0.4% at 914.58.The Cboe UK 100 was up 0.4% at 12,320.95, the Cboe UK 250 up 0.4% at 17,036.26, and the Cboe Small Companies up 0.1% at 11,162.63. In Paris the CAC 40 was up 0.8%, while the DAX 30 in Frankfurt was up 0.9%. "Shanghai's SSE Composite index jumped 3.2% on hopes that the US and China were making progress with trade talks. This optimism also gave a boost to the London-listed natural resources sector with mining shares topping the list of FTSE 100 risers," commented Russ Mould, investment director at AJ Bell.Antofagasta, Glencore, Anglo American, Rio Tinto and BHP Group shares were up 2.6%, 2.3%, 2.0%, 1.8% and 1.8% respectively, with these shares making up most of the top-five large-cap gainers for the majority of the morning Friday."Miners were among the main beneficiaries of the trade talks as they depend on the re-establishment of tariff-free trade flows in and out of China. Glencore, Rio Tinto and other miners have gained close to 2% this morning, leading the FTSE risers' table and Rio Tinto managed to avoid being knocked down for declaring force majeure on some of its iron ore contracts," said CityIndex senior market analyst Fiona Cincotta.The pound was quoted at USD1.3099 at midday, firm compared to USD1.3044 the London equities close Thursday. However, the pound has seen little volatility Friday despite investors bracing for another vote in parliament on a stripped-down version of UK Prime Minister Theresa May's twice-defeated UK divorce deal this afternoon around 1430 GMT.The PM's decision to present just the Withdrawal Agreement portion of her deal to the Commons means it is not a third attempt to pass a "meaningful vote" on the total deal and complies with rules laid down by Commons Speaker John Bercow.However, May faces a significant struggle as key government allies the DUP have joined Labour leader Jeremy Corbyn in saying that they will vote against the move due to concerns about a trade border being eventually imposed between Northern Ireland and the rest of the UK."It may be surprising therefore to see that the pound has turned south this week but hasn't broken any major levels, just moved back to the lower end of its recent range, so traders aren't too gloomy. The reason for this is simple, no-deal remains possible but unlikely," commented Oanda senior market analyst Craig Erlam.The annual figure for UK gross domestic product growth received a slight bump Friday, data from the Office for National Statistics showed, revised up to 1.4% from 1.3% reported prior. Despite small upgrade, economic growth in 2018 was the slowest pace since 2012 and was down from 2017's growth of 1.8%."UK quarterly GDP was confirmed at 0.2% for the final three months of 2018, the joint lowest level since 2013. Meanwhile, while many will cheer the growth upgrade from the ONS which saw an annual figure of 1.3% raised to 1.4%, this represents the lowest level of growth since 2012. Interestingly, we saw a 'large net inflow of portfolio investment into the UK', which certainly runs contrary to the perception that money is flooding out of the country ahead of Brexit," said Joshua Mahony, senior market analyst at IG.The FTSE 100 had some significant losers at midday for company-specific reasons. TUI shares dropped 6.7% after the Anglo-German travel company warned that the grounding of the Boeing 737 Max aircraft will hit annual earnings and will result in a large exceptional charge. Boeing 737 Max aircrafts have been grounded by countries around the world following two fatal crashes in the past five months. Assuming resumption of 737 Max flights by mid-July, TUI is estimating a one-off charge of EUR200 million on adjusted earnings before interest, taxes and amortisation for its financial year to the end of September. As a result of the exceptional charge, TUI expects underlying Ebitda for 2019 financial to fall by 17%, versus previous broadly flat guidance.If the plane is not flying by mid-July, the annual hit will be even larger, TUI warned.AstraZeneca dropped 6.1% after announcing it plans an up to USD6.9 billion collaboration agreement with Japan's Daiichi Sankyo. A USD3.5 billion equity fund raise will be conducted by Astra to help pay for this. Under the agreement, which covers potential cancer treatment trastuzumab deruxtecan, Astra will make an upfront USD1.35 billion payment to Daiichi Sankyo, followed by contingent payments of as much as USD5.55 billion for a total of up to USD6.90 billion. Of the USD5.55 billion contingent payments, USD3.80 billion will be paid out to the Japanese company for regulatory milestones and USD1.75 billion will be for sales-related milestones.Micro Focus shares were down 0.4% after saying that it expects a moderation in the decline of its revenue for the continuing business.In its annual general meeting statement, the FTSE 100 enterprise software company said it continued to expect a revenue decline between 4% and 6% for the financial year to October, slower than the 7.1% drop suffered a year ago. Man Group shares rose 4.0% after Credit Suisse initiated the hedge fund manager with an Outperform rating. Meanwhile, an upgrade to Neutral from Sell by UBS lifted Jupiter Fund Management 3.1%Stocks in New York were set for higher open with major stock indices pointed up 0.4%. By Idris Nur; [email protected]
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