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(Alliance News) - Stock prices in London were on the rise on Thursday at midday as sentiment was boosted on the news the two world's largest economies might finally be heading towards a deal to end their ongoing trade spat.
Closer to home, the Bank of England kept UK interest rates unchanged at 0.75%, but two out of 9 policy makers voted to cut rates.
The pound was quoted at USD1.2824 at midday Thursday, down from USD1.2866 late on Wednesday.
The Chinese Commerce Ministry said Thursday the pair have agreed a plan to remove tariffs imposed on two-way goods in stages. But there also has been growing hope that they are close to reaching a mini agreement as part of a wider trade deal.
"In the past two weeks, the negotiation leaders of the two sides have held serious and constructive discussions on properly resolving their core concerns and agreed to roll back the additional tariffs in stages, as progress is made towards a [final] agreement," ministry spokesman Gao Feng told a news conference.
The FTSE 100 was 15.93 points higher, or 0.2%, at 7,412.80 Thursday midday. The FTSE 250 was up 177.80 points, or 0.9%, at 20,394.39, and the AIM All-Share was up 0.1% at 891.98.
The Cboe UK 100 index was up 0.3% at 12,563.89. The Cboe UK 250 was up 1.1% at 18,297.07 and the Cboe UK Small Companies was up 0.2% at 11,264.83.
In European equities, the CAC 40 index in Paris was up 0.2% and the DAX 30 in Frankfurt was 0.7% higher.
"European stocks are on the rise this morning, with the early doubts over a potential delay to the phase one US-China trade deal being cast aside after the Chinese laid out a strategy for de-escalating their relationship with the US," said IG senior market analyst Joshua Mahony.
"While a final deal could be signed in December rather than November, the plan to begin rolling back tariffs across the phases does show that we are finally seeing light at the end of the tunnel. Unlike the promise of higher agricultural purchases by the Chinese, a roll back in tariffs from each side would be much more positive for the wider economy and less likely to falter due to non-conformity of the agreement. Optimism over those US-China talks has understandably boosted risk sentiment, with stocks and the yuan gaining ground at the detriment of havens such as gold and the Japanese yen."
Wall Street is pointed to a big open as a result, with the S&P 500 set to open 0.4% higher, the Nasdaq Composite 0.5% and the Dow Jones Industrial Average 0.6%.
On the London Stock Exchange, RSA Insurance was biggest large-cap riser, up 3.5%, after the general insurer reported flat premiums in the first nine months of 2019 despite "challenging" market conditions.
The London-headquartered company said insurance market conditions were largely unchanged in the third quarter, but financial markets continue to present challenges, particularly from lower bond yields. The company's net written premiums in the year-to-date of GBP4.87 billion were flat year-on-year and broadly in line with expectations.
"RSA's results to end September are strong, and consistent with our plans for the period. Current year underwriting results have sharply improved, with all our regional businesses contributing," said Chief Executive Stephen Hester.
Housebuilder Persimmon was 2.9% higher as trading over the summer met expectations.
Persimmon said business has been "resilient" in the second half of 2019, and the company is now fully sold for the current year. Some GBP950 million of forward sales are secured beyond 2019, compared to GBP987 million this time a year ago.
Sales volumes for the first half of 2019 dipped 6% year-on-year to 7,584 homes, but this was due to an approach of selling homes only when they are at an advanced stage of construction. Persimmon expects second-half sales to be above the first half.
Auto Trader was up 1.3% after the car marketplace lifted its dividend on the back of a 12% increase in first-half profit and said it remains confident in meeting growth expectations for financial 2020 despite ongoing market uncertainty.
For the six months to September 30, Auto Trader recorded a 12% rise in pretax profit to GBP127.7 million, on revenue of GBP186.7 million, up 6%.
Also among the blue-chip risers were miners, benefiting from the positive US-China trade news.
Glencore was up 1.7%, Anglo American up 1.3% and Antofagasta up 1.2%. Steel maker Evraz was 2.3% higher.
At the other end of the FTSE 100, Hiscox was by far the worst performer, losing 14%, after JPMorgan has cut its rating on the insurer to Neutral from Overweight. Jefferies cut its price target on the stock by 23%, keeping a Hold rating.
Joining Hiscox at the bottom of the blue-chip index was Hikma Pharmaceutical, down 2.0% despite the generic drug maker reiterating annual guidance amid "strong" performance across all divisions.
The London-headquartered company said it is benefiting from its "broad and differentiated" product portfolios, strong commercial capabilities, and tight cost control.
SSE was down 1.8% after Berenberg cut the electricity utility to Hold from Buy.
In the midcaps, Bank of Georgia was the best performer, up 8.7% after the lender reported a 1.8% rise in net interest income for the third quarter to GEL188.7 million, about GBP49.6 million, with net fee and commission income up 22%.
Pretax profit climbed 30% to GEL157.0 million. Bank of Georgia said it was an "excellent" quarter of growth, with improved asset quality and profitability.
John Wood Group was 7.4% higher. The oil field services firm said ongoing cost-cutting measures are benefiting overall performance in a weak market.
John Wood confirmed 2019 earnings before interest, taxes, depreciation, and amortisation performance is tracking market consensus despite a "slowing macro environment".
Tate & Lyle was up 6.7% after it said it expects to deliver earnings growth in its current financial year following a surge in profit in the first half.
The company reported a pretax profit for the six months to the end of September of GBP164 million, 45% higher compared to a year ago, as sales grew by 6.7% to GBP1.48 billion.
Tate & Lyle increased its interim payout to 8.8 pence a share from 8.6p paid a year prior.
Engineering firm IMI was 6.4%. It said it has put lower-margin businesses worth 20% to 30% of group revenue under review, and it is targeting a further GBP35 million of annualised savings.
IMI has found "significant value creation opportunities" across the business after completing a group-wide review. The company said organic revenue for the three months to September 30 was 2% lower year-on-year and flat on an adjusted basis.
Despite the lower sales, IMI achieved higher margins in the third quarter, adding that units have "acted decisively" to reduce costs and protect margins.
Sinking to the bottom of the FTSE 250, Senior lost 5.1% after the engineering firm announced it is implementing a restructuring to drive improved results as it deals with challenges in the Flexonics and Aerospace markets.
The manufacturer of high-technology components and systems said the restructuring will result in around GBP20 million of savings, "with a significant portion coming from headcount reductions as we match capacity to demand", the company said.
Senior said sales grew in Aerospace in the first ten months of 2019 from a year before but revenue in the last four months, July to October, has been lower than expected due to weakened demand in the commercial aircraft engine market. Senior's Flexonics division has been performing in line with expectations with "markets weakening in the last four months as anticipated."
Luxury car maker Aston Martin Lagonda was struggling, down 1.2%, after warning of "tough trading conditions" hurting sales.
For the third quarter of 2019, Aston Martin's wholesale volumes slumped 16% to 1,497 vehicles, with the nine-month figure down 3% to 3,939.
This led to an 11% drop in third-quarter revenue to GBP250.1 million, and for the nine months there was a 7% decline to GBP657.2 million.
Gaydon, Warwickshire-based Aston Martin posted a quarterly pretax loss of GBP13.5 million, swung from a GBP3.1 million profit a year ago, and a nine month to September 30 pretax loss of GBP92.3 million from a profit of GBP23.9 million.
Looking ahead, Aston Martin expects to meet the market's financial expectations for 2019 despite the lower volumes. For 2019, Aston Martin sees total wholesales to be lower than previously guided, but still within market expectations.
By Paul McGowan; paulmcgowan@alliancenews.com
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