24th Apr 2014 09:47
LONDON (Alliance News) - Investors have approached equities in a buying mood Thursday, pushing the FTSE 100 to a six-week high, following the overnight release of strong results from Apple and Facebook that suggest fears of a technology bubble may be exaggerated.
While the technology stocks are performing well in London Thursday, it is the miners that lead the gains subsequent to a number of positive updates in the sector, while European sentiment has received a general boost from a survey showing German business confidence rising faster than expected.
By mid-morning the FTSE 100 is up 0.6% at 6,711.44, the FTSE 250 is up 0.4% at 16,059.68, and the AIM All-Share is up 0.2% at 828.38.
Major European markets also are higher, with the French CAC 40 up 0.7%, and the German DAX up 0.6%.
The German IFO business climate index rose for the second consecutive month, recording 111.2 in April, up from 110.7 in March. The index surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. Given ongoing tensions between Ukraine and Russia, where German has particularly strong trade links, economists had expected a slight dip in confidence and a reading of 110.5.
While the upside surprise gave a small boost to the euro against the dollar, the single currency's morning gains have been mostly wiped out by the comments of European Central Bank president Mario Draghi during his appearance at the 200 year anniversary of the Dutch central bank in Amsterdam at 1000 GMT.
Draghi reiterated his commitment to using both conventional and unconventional measures to maintain price stability, as well as again stating that the strength of the euro is becoming an increasingly important issue. The ECB president also said that he sees the publication of meeting minutes as the logical next step in the central bank's communication, something already done by the US Federal Reserve and Bank of England.
The euro now trades at USD1.3830, while the pound is little moved at USD1.6790.
Within UK equities the miners are amongst the top gainers. In a positive update, Anglo American said that production across most of its major operations increased in the third quarter. Iron ore production was up 10%, copper increased by 18%, and diamond production went up by 18%. In a notable exception, Anglo's platinum production decreased by 39% as a results of ongoing strikes at its mines in South Africa. Anglo American shares are up 3.0%.
Centamin leads the FTSE 250 gainers, up more than 10% on the back of a new law passed in Egypt that seems likely to help the company in an ongoing court appeal. In 2012 Centamin launched an appeal against a court ruling which questioned its rights to operate the Sukari Gold Mine, its only producing mine. The miner said Thursday that the new law will restrict the capacity for third parties to challenge any contractual agreement between the Egyptian government and an investor, which could result in a legal case against it being dismissed.
AstraZeneca is the biggest blue-chip gainer, after its first quarter results put it back in the spotlight following speculation of a takeover offer earlier in the week. The pharmaceutical company posted a pretax profit of GBP638 million, down from GBP1.30 billion in the previous year, saying profit was hit by the write down of USD257 million on the sale of its research and development site at Alderley Park site in Cheshire, and its acquisition of Bristol-Myers Squibb's share of the US diabetes alliance for USD2.7 billion in February. The group made no comment on the reported takeover bid by US peer Pfizer. With the market continuing to expect an increased takeover offer from Pfizer, AstraZeneca shares are up 4.1% Thursday, and by more than 10% over the week so far.
Technology stocks are performing better than of late after the strong results from US companies Facebook and Apple overnight boosted sentiment in the sector. FTSE 250-listed Imagination Technologies, which supplies processing chips to Apple, is up 8.9% following the update from the US tech giant which said iPhone sales remain strong.
Facebook also provided a boost to the sector, announcing a massive 72% rise in first quarter revenue on the back of increased advertising revenue. Facebook founder Mark Zuckerberg was recognised for his contribution to the modern world by Madame Tussauds Wednesday, when a new San Francisco branch of the attraction unveiled a life-sized version of the Social Network mogul.
Still to come Thursday, US durable goods orders are released at 1230 GMT, economists expect order growth to have remained strong at 2.0% in March, marginally lower than the 2.2% recorded in February. Weekly initial jobless claims numbers are also due at 1230 GMT, followed by the Kansas Fed manufacturing activity index at 1500 GMT.
US corporate results also will continue to impact global markets, with a busy day ahead across the pond. Big names reporting Thursday include Microsoft, Coca-Cola, and Amazon.
Ahead of the raft of earnings, US futures indicate Wall Street will open firmly higher, with the DJIA up 0.4%, the S&P 500 up 0.6%, and the Nasdaq composite up 1.4%.
By Jon Darby; [email protected]; @jondarby100
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Related Shares:
AstrazenecaImagination Technologies GroupAnglo AmericanCentamin PLC