18th Sep 2014 09:32
LONDON (Alliance News) - UK stocks have had mixed morning session, while the pound has seen increased volatility, after polling stations in Scotland opened Thursday morning and the release of slightly disappointing UK retail sales figures.
After opening higher, the FTSE 100 dipped into the red in early trade before pushing higher again. By mid-morning Thursday the leading index is up 0.3% at 6,804.99, and the FTSE 250 is up 0.3% at 15,621.03. The AIM All-Share is underperforming, down 0.5% at 759.56.
The first of the Targeted Long-Term Refinancing Operations recently announced by the European Central Bank as part of its extraordinary monetary easing measures begins Thursday. The first results have just been released and show that EUR82.6 billion in cheap loans have been taken up by European banks of the EUR200 billion that was available Thursday.
Major European markets are outperforming the UK. The French CAC 40 is up 0.8%, and the German DAX is up 1.0%.
Broadly, the gains across the UK and Europe follow on from a better close for US markets on Wednesday, after the Federal Reserve Chair Janet Yellen successfully navigated another policy statement and press briefing without causing any upset to the markets. Crucially, the Fed maintained the guidance that it will remain appropriate to keep interest rates on hold for "considerable time" after its quantitative easing programme ends next.
UK retail sales grew by 3.9% year-on-year in August, accelerating from the 2.5% growth recorded in July, but missing economists expectations for even stronger growth of 4.1%. On a monthly basis, sales were up by 0.4%, in line with expectations.
The data gave a brief knock to the pound, which has been relatively volatile since seeing a 60 point spike against the dollar just before the polls opened in Scotland earlier Thursday. The knock was short-lived, however, and the pound is currently towards the top of recent ranges at USD1.6312 and EUR1.2662.
Within the UK equity movers, easyJet shares are up 2.4% after the low-cost airline announced an increase in its dividend payout ratio to 40% of profit after tax, up from 33% previously. The airline announced the increase in a statement released ahead of an investor day in London which starts at 1400 BST. EasyJet also said it will exercise an option to buy an extra 27 current generation A320 aircraft for delivery between 2015 and 2018.
Booker Group leads the FTSE 250 higher. The UK food wholesaler is up 3.4% after announcing second quarter sales ahead of analyst expectations. Expectations were low heading into the update, and the shares had fallen about 15% over the last three weeks. Thursday's gains reflect the positive surprise that Booker's non-tobacco sales on a like-for-like basis, excluding Makro, were up 3.1%. Shore Capital had forecast a rise of just 1.0%.
Merlin Entertainments shares are up 2.0% after saying its like-for-like revenue has grown 6.7% year-to-date, with its LEGOLAND parks up almost 14% .
Just Retirement shares are up 2.0% after reporting a 6% rise in new business to GBP1.75 billion of new business sales in the year ended June 30, compared with GBP1.65 billion last year. The group said that strong lifetime mortgage volumes offset weak individual annuity sales following the shake-up of the market by the UK government.
Still to come Thursday, US building starts and initial jobless claims data are due at 1330 BST, ahead of a speech by Fed Chair Janet Yellen at 1345 BST. Yellen will be delivering a speech entitled "The Importance of Asset Building for Low and Middle Income Households" from a conference in Washington. The Philadelphia Fed manufacturing survey for September follows at 1500 BST.
Investors around the world Thursday also are awaiting the final pricing of the Alibaba IPO, which is expected to be the largest in history and will have the potential to drive overall market sentiment when it lists in New York on Friday.
US futures currently indicate that Wall Street can be expected to open higher, with the DJIA and the S&P 500 both pointing up 0.2%.
By Jon Darby; [email protected]; @jondarby100
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