Barclays Share News (BARC)

(Alliance News) - Hopes of agreement on both the Brexit and US stimulus fronts were pushing stocks higher on Wednesday, with the more domestically exposed FTSE 250 index accelerating ahead of the blue-chip FTSE 100.

The FTSE 100 index was up 69.44 points, or 1.1%, at 6,582.76 midday Wednesday. The mid-cap FTSE 250 index was up 304.11 points, or 1.5%, at 20,156.50. The AIM All-Share index was up 0.9% at 1,080.30.

The Cboe UK 100 index was up 1.0% at 655.67. The Cboe 250 was up 1.6% at 17,461.99, and the Cboe Small Companies up 1.2% at 11,468.04.

In mainland Europe, the CAC 40 in Paris was up 0.8%, while the DAX 30 in Frankfurt surged 1.7% on Wednesday afternoon.

"European markets have kick-started their Wednesday session with a bang, as optimism over a potential US stimulus package are accompanied by tentative signs of progress on the Brexit front," said Joshua Mahony, senior market analyst at IG.

There is a "path" to an agreement between the UK and EU on a post-Brexit trade deal but arguments over fishing rights continue, Brussels chief Ursula von der Leyen has said.

The European Commission president conceded that the route to an agreement is "very narrow" and resolution of the difficulties over fishing may prove impossible. But she indicated that progress has been made on measures to prevent either side unfairly competing with the other by cutting standards or using state subsidies.

The coming days will be "decisive" as the clock ticks down until the end of the month when the current arrangements between the two sides expire.

Michael Hewson at CMC Markets commented: "Gainers on the FTSE 100 are the usual suspects of house builders, banks and the oil majors, as optimism over a possible deal continues to increase."

Shares in oil major Royal Dutch Shell 'A' and 'B' were up 1.7% and 2.2% respectively. Lender Barclays rose 1.9%, and housebuilder Barratt Developments added 3.5%.

Also giving homebuilders a boost on Wednesday were figures showing the average UK house price hit a record high of GBP245,000 in October – also marking a GBP13,000 increase on a year earlier.

House prices increased by 5.4% over the year to October, up from 4.3% in September, according to the Office for National Statistics, which said a stamp duty holiday may be allowing sellers to request higher prices. The ONS said this is the highest annual growth rate the UK has seen since October 2016.

In the US, Wall Street is headed for a higher start. The Dow Jones is called up 0.3%, the S&P 500 up 0.4% and the Nasdaq Composite up 0.3%.

To come in Wednesday's economic calendar are US retail sales at 1330 GMT followed by a Markit PMI reading at 1445 GMT and a US Federal Reserve policy decision at 1900 GMT.

Already released, UK business activity returned once again to growth in December even though the service sector continues to lag.

The IHS Markit/Chartered Institute of Procurement & Supply flash composite output index rose to a two-month high of 50.7 in December from 49.0 in November. Registering above the no-change mark of 50, December's reading indicates the UK economy expanded marginally.

Boosting the reading was the manufacturing sector, posting a purchasing managers' index reading of 57.3 for December from 55.6 in November - helped as firms eyed the year-end Brexit deadline - while services business activity index also improved in December, but still remained in contraction territory. December's services PMI registered 49.9, up from November's 47.6.

The picture in the eurozone also improved in December, with the economy nearing stabilisation.

The flash eurozone composite PMI strengthened to 49.8 in December from 45.3 in November, reaching a two-month high.

This means the PMI has averaged 48.4 in the fourth quarter, IHS Markit highlighted. While down from 52.4 in the third quarter, it is well above the second quarter's average of 31.3, suggesting that the economic hit from second wave of Covid-19 has been far less severe than the first.

Sterling was quoted at USD1.3515 on Wednesday, higher than USD1.3401 at the London equities close on Tuesday. The euro traded at USD1.2194, rising from USD1.2151 late Tuesday.

Against the yen, the dollar weakened to JPY103.31 versus JPY103.72.

Gold was quoted at USD1,864.16 an ounce on Wednesday, higher than USD1,847.70 on Tuesday. Brent oil was trading at USD50.82 a barrel, firm on USD50.63 late Tuesday.

Back in London, Bunzl shares fell 5.9% after the distribution firm guided to lower revenue in 2021.

Bunzl said it expects a "strong performance" for 2020, with continued growth in Covid-19 related orders during the fourth quarter of the year amid pandemic-driven restrictions in some markets. Bunzl said revenue for 2020 is expected to increase by 8% and its operating margin is expected to be higher than the prior year as it has "significantly" benefited from a mix of products being sold.

Looking ahead, however, Bunzl said it expects revenue in 2021 to be lower than the current year, with "minimal benefit" from larger Covid-19 related orders which have strongly supported the performance in 2020.

Dixons Carphone jumped 14% in the FTSE 250 as it swung to a profit on a surge in online sales.

The electrical products and mobile phone retailer improved to a pretax profit in the six months ended October 31 of GBP45 million from GBP86 million loss a year prior. Revenue was up to GBP4.86 billion from GBP4.71 billion a year before. The 3.2% increase was driven by online sales, which more-than-doubled, Dixons said.

For UK & Ireland Electricals, revenue was up 15%, or 16% like-for-like, and online sales more than doubled, offsetting a loss of sales from enforced store closures and in Dixons Travel. UK&I Mobile didn't fare as well; revenue declined by 54%. In the international business, revenue rose 16% and was up 18% like-for-like.

Trading since the half-year ended on October 31 has continued strongly, Dixons said. In UK & Ireland Electricals, like-for-like growth was 11% in the six weeks to December 12 despite stores in England, Wales, Scotland and Northern Ireland having been closed for substantial periods.

Petrofac slipped 4.0% after the oilfield services firm said it expects full-year profit to be "materially lower" than in 2019.

The FTSE 250 constituent said it expects 2020 revenue of approximately USD4.0 billion and full-year profitability to be "materially lower" year-on-year. This is due to lower oil prices and an uncertain near-term outlook resulting in delays in awarding new projects across the industry, it said.

Looking ahead, Petrofac said a low order intake over recent years will result in a decline in revenue in 2021. To combat this, it has announced a set of measures designed to make a total estimated gross savings of USD250 million next year, which will seek to protect the business from lower revenues and ongoing pressures on margins, it said.

Clothing retailer Superdry advanced 8.7% as it confirmed Founder Julian Dunkerton as the group's permanent chief executive officer. Dunkerton, the company's largest shareholder at 20.3%, had been serving as interim CEO since returning to the company in 2019 in a boardroom coup following a series of profit warnings.

By Lucy Heming; lucyheming@alliancenews.com

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