21st Jun 2019 08:51
(Alliance News) - Stock prices in London opened higher on Friday despite worries about tensions between the US and Iran, as Carnival recovered some of the steep losses from Thursday and Trainline priced its initial public offer price. The FTSE 100 index was up 0.2% at 7,442.16 early Friday. The midcap FTSE 250 index was up 0.2% at 19,422.97. The AIM All-Share index was down 0.3% at 930.19.The CBOE UK 100 index was up 0.1% at 12,622.83. The CBOE 250 was up 0.2% at 17,388.85, and the CBOE Small Companies was marginally down at 11,611.60.Sterling was quoted at USD1.2703 early Friday, higher than USD1.2693 at the London equities close on Thursday.Global focus remains on the potential for an escalation in the tension between the US and Iran following the shooting down of a US military drone by Tehran.Speaking from the White House, Trump answered a question on whether military retaliation was likely in response with: "You're going to find out. They made a very big mistake."The New York Times also reported that Trump had initially approved military action on a handful of targets, before rowing back on the decision.Citing officials, the newspaper stated Trump had approved the attack on some targets such as radar and missile batteries with planes in the air and ships in position. No missiles were fired, however, with the order delivered to stand down. "The big news overnight was that President Trump pulled back from military strikes on Iran in response to the downing of a US Navy drone after intense discussions with his national security team," Lloyds Bank analyst Hann-Ju Ho said. "That has weighed on risk sentiment."Wall Street ended higher on Thursday, with the Dow Jones Industrial Average ending up 0.9%, the S&P 500 up 1.0% and Nasdaq Composite up 0.8%.During Thursday, members of Parliament from the ruling Conservative Party finally whittled down the contenders to replace Prime Minister Theresa May to just two following a final brace of votes.The favourite to replace May remains Boris Johnson, a former foreign secretary and mayor of London. He will be faced by current Foreign Secretary Jeremy Hunt as they prepare to face the wider membership of the party in the final vote. "Judging by their public pronouncements, Johnson and - to a lesser extent - Hunt personify the problem that has made the Brexit process so traumatic for the UK," Berenberg analysts Holger Schmieding and Florian Hense said. "While they know what goes down well with the Tory base, they pay little attention to what the much bigger EU27 may agree to. "Johnson wants the UK to leave the EU on 31 October with or without a deal," Schmieding and Hense continued. "Whereas Hunt has also claimed that he may lead the UK out of the EU with no deal, he has stressed that this is not his preferred option. Like Johnson, he claims that he could negotiate changes to the Withdrawal Agreement, in particular the Irish backstop."At the top of the FTSE 100 early Friday, cruise operator Carnival was 2.3% higher as it staged a modest rebound following an 11% fall on Thursday amid weak interim results.For the six months ended May, Carnival reported net income narrowed 17% to USD787 million from USD951 million the year prior. This was despite revenue increasing 11% to USD9.51 billion from USD8.59 billion the year before. Consequently, Carnival guided for a lower full-year earnings outcome. The firm now expects adjusted earnings per share of between USD4.25 and USD4.35 from the USD4.35 to USD4.55 range provided previously. The year prior, Carnival reported EPS of USD4.44.Halma was 0.3% higher after the FTSE 100-listed safety and testing firm agreed to buy fire & evacuation systems supplier Ampac Group for AUD135 million, equivalent to GBP74 million.The deal - expected to close before the end of August - will see Halma expand its business in Australia and New Zealand. "This is an exciting acquisition that extends our geographic footprint and strengthens the intellectual property of our fire detection businesses," Halma Chief Executive Officer Andrew Williams said. Sports Direct International was 0.5% lower as it limbered up for another board-level tussle with an investee. This time around, it is troubled troubled five-a-side football pitch operator Goals Soccer Centres that is the target.Mike Ashley-controlled Sports Direct - which is substantial shareholder in Goals - said it had experienced a "loss of confidence" in the board at Goals following its failure to hire independent advisers to review its VAT treatment issues which have hit the firm and pushed it into a series of profit warnings.Consequently, Sports Direct will vote against the reappointment of the board next Friday due to its "perceived lack of transparency". Trading in Goals Soccer Centres shares is suspended.Elsewhere, online train ticket retailer Trainline announced it will price its initial public offer at 350 pence per share which gives the company a market capitalisation of GBP1.68 billion. Unconditional trading in Trainline shares is expected to begin next Wednesday. In Asia on Friday, the Japanese Nikkei 225 index closed 1.0% lower. In China, the Shanghai Composite ended 0.5% higher, while the Hang Seng index was 0.4% lower in late trade in Hong Kong.Still to come in the economic calendar on Friday, the flash purchasing managers' index for the eurozone is at 0900 BST. In the US, flash manufacturing and services PMIs are due at 1445 BST.The US PMI prints are expected to be impacted by the trade tension between the US and China as well as neighbouring Mexico. "This is expected to feed into a weak US flash manufacturing PMI later this afternoon," CMC Markets UK Chief Market Analyst Michael Hewson said. "Expectations are for an unchanged reading of 50.5 in May, however don't be surprised if the indicator contracts below 50. The services sector is expected to improve modestly to 51, from 50.9."