25th Sep 2015 07:35
LONDON (Alliance News) - UK stocks opened higher Friday, with the FTSE 100 index taking back the losses seen Thursday, supported by a rebound in mining stocks, while shares in Synergy Health spiked to the top of the mid-cap FTSE 250.
The FTSE 100 opened up 1.9% at 6,073.26 points, the FTSE 250 index was up 1.4% at 16,745.52, and the AIM All-Share index up 0.4% at 731.67. In Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt both were up 1.9%.
London-listed mining stocks were pushing higher at the open, with Glencore, up 4.6%, Anglo American, up 2.1%, BHP Billiton, up 1.9%, and Antofagasta, up 1.9%.
The FTSE 350 Mining Sector Index was up 2.4%, rebounding from the sharp losses seen on Thursday, when the mining index dropped 3.0%.
Synergy Health shares shot up 43%. The US's STERIS Corp's acquisition of London-listed Synergy Health cleared a major hurdle, after the US District Court for the Northern District of Ohio denied the US Federal Trade Commission's request for a preliminary injunction to block the takeover.
The FTC revealed earlier in the year it intended to block STERIS's proposed USD1.9 billion cash and share takeover of Synergy, as a result of concerns relating to competition in the market for contract radiation sterilisation services. This led the two companies to postpone shareholder meetings to vote on the takeover, and to extend the long stop-date for the completion of the deal.
Both had originally rescheduled the votes to Thursday. However, they now are rescheduling their meetings once more to allow for sufficient notice for Synergy's shareholders under UK law to October 2.
Just Retirement Group and Partnership Assurance Group both announced share placings in relation to the all-share merger between the two companies.
Just Retirement, the FTSE 250-listed retirement products company, and smaller rival Partnership Assurance said the two issues will raise a total of GBP150.0 million to back their proposed merger, under which they will combine under the name JRP Group.
Just Retirement said the size and pricing of its placing and open offer will be determined following an accelerated bookbuilding process, to be run by Barclays Bank, Deutsche Bank and Nomura International. Partnership said it will issue around 40.0 million shares under the issue. Its issue will be run by JPMorgan Cazenove and Morgan Stanley.
Shares in Just Retirement were up 1.4%, while Partnership Assurance was down 0.9%.
Outside London, Asian stocks were mixed. The Japanese Nikkei 225 ended up 1.8%, while in China, the Shanghai Composite closed down 2.2% and the Hang Seng in Hong Kong is up 0.2%.
Wall Street ended lower Thursday. The Dow 30 index closed down 0.5%, the S&P 500 ended down 0.3% and the Nasdaq Composite finished down 0.4%.
A week after the US Federal Reserve voted to keep interest rates at 0%-0.25%, Fed Chair Janet Yellen said she expects the long-anticipated rise in interest rates to begin gradually by the end of the year, to avoid an abrupt hike later on.
Yellen, who was speaking at the University of Massachusetts at Amherst, said that projection was based on her expectation that the labour market and economy continue to improve, and the projection that inflation will gradually move up towards the 2% goal set by the Fed.
"Most [Federal Open Market Committee] participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter. But if the economy surprises us, our judgments about appropriate monetary policy will change," she said, according to a transcript of her speech.
The final scheduled Fed policy statement for 2015 is on December 16, with one other scheduled for October 28.
The difficulty with delay is that if an interest rate is put off for too long, "we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals," Yellen said.
An abrupt tightening would risk disruption of financial markets and "perhaps even inadvertently push the economy into recession," she said.
CMC Markets chief market analyst Michael Hewson commented: "Last night?s speech by Fed chief Janet Yellen certainly kept the Fed?s options open for a rate rise this year, saying that most participants on the FOMC expected an 'initial increase in the federal funds rate later this year' but if the economy surprises them then judgements might change."
"Translation, we may raise rates, but then we might not," added Hewson.
Lloyds Bank said that "looking ahead to today?s events, speeches by Fed members [James] Bullard and [Esther] George are likely to attract some attention given their relatively hawkish stance compared with the rest of the FOMC," said Lloyds Bank. "Neither are voting members this year, although they are voting participants next year and should provide some insight into the mix of the committee in 2016."
Federal Reserve Bank of St. Louis President James Bullard participates in a discussion on "New Directions in Monetary Policy" before the Global Interdependence Center in St. Louis at 1445 BST, while Federal Reserve Bank of Kansas City President Esther George speaks on economic conditions and monetary policy before the Aksarben Business Luncheon, Nebraska, at 1825 BST.
Also in the US economic calendar, investors will focus on Markit's services and composite Purchasing Manager's indices, due at 1445 BST. But before that, gross domestic product is expected at 1330 BST.
By Daniel Ruiz; [email protected]
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