22nd Jan 2020 08:32
(Alliance News) - The FTSE 100 opened higher on Wednesday, rebounding from the previous session's virus-driven worries, with housebuilder Berkeley and accounting software firm Sage helping to push up the blue-chip index.
Weighing at the other end were Antofagasta, Burberry, and J Sainsbury.
The FTSE 100 index was up 18.93 points, or 0.3%, at 7,629.63 early Wednesday. The mid-cap FTSE 250 index was just 0.72 of a point higher at 21,746.13 and the AIM All-Share index was up 0.1% at 963.43.
The Cboe UK 100 index was up 0.3% at 12,928.56. The Cboe 250 was flat at 19,616.13, and the Cboe Small Companies broadly unchanged at 12,393.06.
In mainland Europe, the CAC 40 in Paris was up 0.2% while the DAX 30 in Frankfurt was 0.4% higher early Wednesday.
In Asia on Wednesday, stocks traded in the green. In Tokyo, the Nikkei 225 index closed up 0.7%. The Shanghai Composite ended up 0.3%, while the Hang Seng index in Hong Kong ended up 1.2%.
"The potential mutation and adaptation of the deadly Coronavirus has been effectively ignored by major equity benchmarks as markets surged back to all-time highs. It seems that risk sentiment is considering much of the widespread news and talk of a potential SARS 2003 outbreak as predominantly fearmongering, and that the situation will eventually return to normal, as it has historically," said Bethel Loh, macro strategist at ThinkMarkets.
Loh added: "Over in FX, G10 failed to partake in the risk-on move with price action somewhat subdued."
Sterling was quoted at USD1.3045 early Wednesday, unchanged from late Tuesday.
The euro was stood at USD1.1077 early Wednesday, soft compared to USD1.1096 late Tuesday. Against the yen, the dollar was quoted at JPY109.97 versus JPY109.95.
"Amid incredibly subdued trading conditions, FX volatility is unlikely to trough until the implications of coronavirus clear out, but could get interesting walking into a minefield of central bank meetings," said ThinkMarkets's Loh.
In Wednesday's economic calendar, there is UK public sector net borrowing at 0930 GMT and the US housing price index at 1400 GMT, with an interest rate decision from the Bank of Canada at 1500 GMT.
This will be followed by a European Central Bank decision on Thursday and both the US Federal Reserve and Bank of England next week.
In commodities, gold was quoted at USD1,554.40 early Wednesday, down from USD1,557.30 on Tuesday. Brent was at USD64.18 early Wednesday, down from USD64.72 late Tuesday.
At the top of the FTSE 100 early Wednesday was Berkeley Group, up 5.7% as it unveiled plans to boost shareholder returns over the next two years.
The housebuilder intends to increase its returns to shareholders by GBP455 million over the next two years, to total GBP1 billion over the period.
The existing programme was for returns of GBP125 million to be made by March 31, 2020 and GBP280 million in each of the following financial years up to September 30, 2025. However, Berkeley's new plan is to return GBP500 million through a B share scheme in March 2020, and a further GBP500 million to shareholders through a C share scheme in March 2021.
Sage was up 3.3% after the accounting software firm achieved solid organic growth in the first quarter.
Sage said total organic revenue rose 6.7% to GBP465 million in the first quarter of its financial year, which was the three months to December 31.
Recurring revenue was up 11% - underpinned by software subscription growth of 25% - while Other Revenue, SSRS and processing, was down 16%. The fall in Other Revenue reflected Sage's "managed decline" in licence sales and the de-prioritisation of professional services revenue as the business continues to focus on subscriptions.
Meanwhile, Antofagasta dipped 2.9% as it posted a fall in fourth quarter copper output.
The copper miner achieved fourth-quarter copper production of 185,500 tonnes, which it said is "only" 5.8% lower than the previous quarter. The decline was due to planned lower grades and maintenance at the Centinela mine, as well as a strike at Antucoya and fuel delivery disruption at Los Pelambres due to social unrest in Chile.
Antofagasta's 2019 production of copper was 770,000 tonnes, however, a record for the company and at the top end of guidance. This was 6.2% higher than 2018 due to increased output at Los Pelambres, Centinela, and Zaldivar.
Burberry was 2.1% lower despite raising its full-year sales outlook.
In the period to December 28, retail sales rose 1.1% year-on-year to GBP719 million from GBP711 million, or by 2% at constant currency. On a like-for-like basis, sales climbed 3% during the period, building on a year before when they grew by 1%.
This was despite sales in Hong Kong being halved by the recent political protests.
For the financial year ending March, Burberry now expects revenue to grow by a low single-digit percentage, at constant currency. Previously, it saw flat sales at constant currency.
J Sainsbury slipped 1.1% as it announced the departure of Chief Executive Mike Coupe.
The supermarket said Coupe, who has served as CEO for almost six years, will be succeeded by Retail & Operations Director Simon Roberts, who will start his new role from June 1.
Sainsbury's said Coupe will remain a director from June 1 until the annual general meeting on July 2. During the period, he will support Roberts and the board with the transition and an orderly handover of responsibilities, the company said.
Shore Capital said it was not surprised by news of Coupe's departure.
"Coupe is a very focused and intelligent executive who took on the mantle of leading Sainsbury at a most difficult time," said Shore. "He has rationally gone about his job but also showed immense ambitions, effectively acquiring and integrating Argos, to our minds, but materially over-extending the business' capabilities in the eyes of the regulator with the proposed Asda merger."
Elsewhere in London, Ted Baker was down 4.3% after the upmarket clothing retailer said a review has concluded that the value of inventory held on its balance sheet was overstated by more than first thought.
Ted Baker said a review by Deloitte has now concluded, and the London-listed firm expects to report that the value of inventory held on its balance sheet at January 26 was overstated by GBP58 million. This is "materially higher", it admitted, than the preliminary assessment of GBP20 million to GBP25 million made in early December.
"As previously stated, the overstatement is a non-cash item and related to prior years," Ted Baker said.
By Lucy Heming; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
BurberryBerkeley GroupSage GroupTED.LAntofagastaSainsbury's