(Alliance News) - Stocks in London were higher at midday on Thursday, with the FTSE 100 back around pre-pandemic levels following dovish reinforcement from the US Federal Reserve and positive UK economic data.
The Fed said it would continue to maintain an accommodative stance until its inflation outcomes are achieved, minutes from the mid-March meet of the Federal Open Market Committee showed late Wednesday.
In addition, Chair Jerome Powell said last month the central bank saw it taking some time before scaling back its support.
The policy-setting FOMC left its benchmark rate unchanged in the range of 0% to 0.25%, as widely expected. Following the two-day meeting, the Fed signalled that interest rates will remain at near zero through until 2023.
The members also reaffirmed the central bank would aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.
The FTSE 100 index was up 20.42 points, or 0.3%, at 6,905.74 - the large cap index touched an intraday high of 6,926.68 on Thursday, its highest level in over a year.
The mid-cap FTSE 250 was up 18.85 points or 0.1%, at 22,178.68. The AIM All-Share index was up 0.4% at 1,235.14.
The Cboe UK 100 index was up 0.2% at 688.80. The Cboe 250 was flat at 19,811.30. The Cboe Small Companies was up 0.3% at 14,164.75.
In mainland Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were up 0.5% and 0.1% respectively.
IG Group's Chris Beachamp said: "It has taken three months, but the FTSE 100 is back above 6,900, enjoying a rare streak of outperformance compared to other global markets which are showing more hesitation. However, the positive feeling is in evidence across most markets, with steady gains for European indices following on from a broadly positive session for Asia overnight.
"The latest set of Fed minutes delivered yet another reminder of Jerome Powell's determination to let the US economy run hot rather than move too early on rate rises, and this dawning realisation has been reflected in the strength of growth stocks such as those of the Nasdaq, which have made up plenty of lost ground in recent weeks as the shift from growth to value goes into reverse."
In the FTSE 100, Johnson Matthey was still the best performer, up 3.4%, after the speciality chemicals company said its financial 2021 operating performance is expected to be around the top end of market expectations.
The company said following disruption from Covid-19, its second half was materially stronger. Johnson Matthey attributed the performance to increased activity in autos and other key end markets and actions taken to transform its operations, including tight cost management.
Further, its strong operational performance has enabled continued investment into strategic growth projects. Johnson Matthey said it continues to review its portfolio to focus on areas to maximise value for shareholders. As part of that process, the company is undertaking a strategic review of its Health business.
In the Clean Air division, Johnson Matthey said there was a strong recovery in demand across all regions towards the end of the first half following a period of disruption caused by the coronavirus pandemic.
Sage Group was up 2.8% after Citigroup upgraded the accounting software provider to Buy from Neutral.
Anglo American was up 2.1% after the miner announced the demerger of its South African thermal coal operations via the transfer to new holding company Thungela Resources.
The demerger comes as the global mining behemoth pursues a "responsible transition" away from thermal coal. The proposal will also allow Thungela to attract new shareholders and to access new sources of capital as an independent company offering direct exposure to thermal coal, Anglo added.
At the other end of the large-caps, Aviva was the worst performer, down 3.6% and Smurfit Kappa was 3.0% lower. The stocks went ex-dividend, meaning new buyers no longer qualify for the latest payout.
In the FTSE 250, Dunelm Group was up 2.3%. The home furnishings retailer said though quarterly sales fell overall, digital sales more than trebled.
For the third quarter to March 27, total sales were GBP236.6 million, down 17% from GBP284.4 million at the same time last year as the majority of the retailer's store estate was shuttered in the period due to Covid-19 restrictions.
However digital sales - which includes click & collect and home delivery - surged to make up 92.4% of total sales from 22.5% a year before.
At the other end of the midcaps, Direct Line was the worst performer, down 4.3%, after the stock went ex-dividend.
On AIM, ASOS was 2.2% lower, surrendering earlier gains. The online fashion retailer said its first half sales rose by almost a quarter, as it hailed its acquisition of Arcadia's assets, but was cautious over its near-term prospects as lockdown measures ease.
In the six months to February 28, revenue rose 24% to GBP1.98 billion from GBP1.60 billion a year earlier. The measure includes other items such as delivery receipts and third party revenue. Retail sales alone were 24% higher at GBP1.92 billion from GBP1.55 billion.
Its profit also surged. ASOS recorded a pretax profit of GBP106.4 million, from GBP30.1 million a year earlier. Adjusted pretax profit, so not including one-off costs related to its Topshop deal, came in at GBP112.9 million.
ASOS said it is "well-positioned" though it is "retaining caution on near term consumer outlook" due to the timing of Covid-19 restrictions being lifted, as well as the possibility of future peaks of the virus.
The pound was quoted at USD1.3745 at midday Thursday, flat from USD1.3747 at the London equities close on Wednesday, amid concerns over the UK's vaccine rollout.
In the latest developments, UK Health Secretary Matt Hancock and chief scientists are seeking to maintain public confidence in the Oxford/AstraZeneca vaccine after regulators pointed to a one in a million chance of dying from a rare blood clot.
Hancock said everyone should take a vaccine when their time comes, and the risk of experiencing a brain clot was the same as "taking a long-haul flight".
He urged the under-30s, who will be offered an alternative vaccine to AstraZeneca, to take a jab to protect loved ones and avoid the risk of long Covid, adding there were plentiful supplies of Moderna and Pfizer for this age range.
Hanock said all vaccines in use in the UK were "safe for all ages", but the "extremely rare" risk of suffering a rare brain blood clot, and the tipping of the balance of risk for the under-30s, means they could be given other jabs instead.
Meanwhile, US biotech firm Moderna's Covid-19 vaccine should protect against illness for at least six months after the second dose, new research suggests. Analysis of blood samples showed that participants maintained high levels of infection-fighting antibodies six months after receiving their second jab.
"A key driver for [the pound's] move has been investors' doubts around the UK's vaccine rollout causing a sell off in Sterling. The UK is quite heavily dependant on the AstraZeneca vaccine. There are now question marks around its link to blood clots," said analysts at OFX.
On the economic front, UK construction sector activity surged in March at its strongest rate in over six years as commercial projects restarted, the latest figures from IHS Markit showed.
The IHS Markit/CIPS UK construction purchasing managers' index registered 61.7 points in March, up sharply from 53.3 in February. The print smashed market forecasts, cited by FXStreet, of 54.6 and remained well above the 50.0 mark which separates expansion from contraction.
Markit said the latest reading signalled the strongest rate of construction output growth since September 2014.
The euro was priced at USD1.1865, down from USD1.1891. Against the yen, the dollar was trading at JPY109.51, down from JPY109.72.
Brent oil was quoted at USD62.78 a barrel on Thursday at midday, up from USD62.08 late Wednesday in London. Gold was trading at USD1,745.74 an ounce, marginally higher against USD1,739.40.
US stock market futures were pointed to a higher open after yet another record for the S&P 500 on Wall Street, helped by a general mood of optimism that the world economy is on course for a strong recovery as vaccines are rolled out.
The Dow Jones Industrial Average was called up 0.1%, S&P 500 up 0.4% and Nasdaq Composite up 1.0%.
In Thursday's international economic calendar, there are the latest US jobless claims figures at 1330 BST. In addition, Fed Chair Powell will be speaking about the global economy at the International Monetary Fund's virtual spring meeting at 1700 BST.
By Arvind Bhunjun; firstname.lastname@example.org
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