18th Aug 2014 09:58
LONDON (Alliance News) - The FTSE 100 has bounced back Monday on relief that a lid was kept on geopolitical tensions over the weekend.
At mid-morning the FTSE 100 is trading up 0.6% at 6,727.29, while the FTSE 250 is up 0.7% at 15,769.04 and the AIM All-Share up 0.3% at 758.66. The gains mean the FTSE 100 has taken back all the losses suffered late Friday on reports that Ukraine forces had attacked a Russian armed convoy.
"Events in Ukraine had every chance of escalating over the weekend. However Ukrainian forces appear to have had the upper hand over the last 48 hours, giving the region a calmer look as the business week starts," said Alastair McCaig, an analyst at IG.
Furthermore, Russian Foreign Minister Sergei Lavrov said Monday a political settlement of the conflict in Ukraine was possible, but only if the government in Kiev halted its military campaign against separatist rebels in the east.
Mark Carney, governor of the Bank of England, said in an interview with the Sunday Times that the central bank would not wait for real wages to rise before raising the bank rate from its current 0.50% level. The news has seen the pound appreciate against the dollar, to USD1.6735.
Semiconductor company ARM Holdings is one of the leading risers in the FTSE 100 after Goldman Sachs added the stock to its Conviction Buy List with a target of 1,400 pence. The stock is up 2%.
Travis Perkins is up 1.3% in the blue-chip index as Liberum highlight the company's impressive recent progress, attributing it to the urgency of new management.
Meanwhile, the supermarket sector has suffered, as Morrison Supermarkets announced it is extending opening hours, according to a weekend newspaper. The extra hours are expected to boost like-for-like sales.
However Shore Capital analyst Clive Black highlights that the longer hours also will increase costs. "Staff need to be deployed beyond basic care and maintenance cover in order to serve customers," the analyst says.
The news comes in light of an ongoing battle for market share against supermarket industry leaders, such as Tesco and Sainsbury's, and the discount supermarkets, such as Aldi and Lidl.
Morrison's shares are trading flat. Tesco shares are down 0.7% at 246.32 pence, the leading loser in the FTSE 100.
Bovis Homes leads gainers in the FTSE 250, with its shares up 5.9%. The company raised its dividend threefold, after pretax profit more than doubled in the first half, as the UK housing market continues to perform "robustly".
The Kent-based firm increased its interim dividend to 12.0 pence from 4.0 pence, as pretax profit rose to GBP49.4 million for the six months ended June 30, from GBP18.6 million a year earlier. Revenue jumped 75% to GBP322.1 million from GBP184.4 million a year earlier. Bovis said it is targeting a full-year dividend of 35 pence per share, which would be a significant increase from the 13.5 pence it shelled out at the end of 2013.
Separately, Rightmove reported a 2.9% fall in month-on-month in its UK house price index, but this hasn't had an overall impact on housebuilder or estate agent stocks Monday.
Amlin is amongst the top losers in the mid-chip index after the company reported an 8.0% fall in first half pretax profit, hit by a GBP24.6 million foreign exchange swing, largely on the weakening of the dollar, as well as a 52% increase in large catastrophe losses. In a statement, the insurer and reinsurer reported a GBP148.5 million pretax profit in the six months ended June 30, compared with GBP161.4 million in the corresponding period last year. Amlin increased its interim dividend 3.8% to 8.1 pence from 7.8p. Shares in the company are down 0.7%.
By Neil Thakrar; [email protected]
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