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LONDON (Alliance News) - Stock indices in the UK and Europe are modestly higher Monday, continuing the positivity from Friday's rally, with few data drivers in the calendar to change sentiment.
By mid-morning Monday the FTSE 100 is up 0.2% at 6,581.85, the FTSE 250 is up 0.3% at 15,906.10, and the AIM All-Share is up 0.2% at 865.56.
In Europe, the French CAC 40 is up 0.5% and the German DAX 30 is up 0.4%.
Within UK equity sectors, Technology stocks are being led higher by Pace PLC, which is up 5.8% after being upgraded to Overweight by Barclays. The bank said it expects further upside to estimates over the coming year. "Pace is successfully navigating the turbulent set-top box market, focusing on high-value regions and leading with technology," Barclays said.
Barclays itself has seen its shares rise 0.9%, despite saying that profit will be lower than expected. In a statement ahead of the release of its full results due on Tuesday, the bank said that its 2013 adjusted pretax profit will be GBP5.2 billion, lower than the GBP5.4 billion previously expected.
Barclays had already been in focus Monday morning because of a story in the Mail on Sunday saying that thousands of files containing client data were stolen and sold on to City boiler rooms.
"No doubt a hefty fine will be imposed if all is as it seems so far. CEO Antony Jenkins has already waived his 2013 bonus in light of recent penalties, and it looks like we haven?t seen the last of it yet," says CMC Markets senior trader Toby Morris.
Meanwhile, Utilities are providing a drag to London shares, with the FTSE 350 Electricity sector down 0.8% and the Gas Water & Multinationals down 0.6%, after UK Energy Secretary Ed Davey wrote a letter to regulators claiming that the profit margins made by the big six energy firms in the UK when supplying gas are much higher than previously thought. Centrica has suffered the most from the story, currently leading the fallers in the FTSE 100, down 2.7%.
The eurozone Sentex investor confidence index rose to 13.3 in February from 11.9 in January, indicating that investors are more bullish about the current economic situation than expected. Economists had expected the confidence index to slip to 10.7.
With little else in the data calendar Monday, and nothing at all from the UK or US, markets are continuing to drift in the direction that they were strongly pushed on Friday by the weak US non-farm payrolls report.
Among currencies, the euro is outperforming both the pound and the dollar, although the major currency pairs are fairly quiet ahead of the central bank events to come later in the week. Against the dollar, the euro is slightly higher at EUR1.3640, while the pound is slightly lower at USD1.6390.
Most economists expect that the Federal Reserve will continue to make small cuts to its asset purchase program at every meeting until the end of the year. However, "the fact that stock markets rallied on the back of Friday?s weak non-farm payrolls data suggests that some investors are now betting that QE could persist for longer", says Rabobank senior strategist Jane Foley.
With little else to go on Monday, investors are already looking ahead to Tuesday, when Janet Yellen makes her first testimony to Congress as president of the Federal Reserve. "Her speech will be closely examined for clues as to whether the Fed is prepared to pause its tapering process or whether the barriers to doing so are currently considered to be too high," says Foley.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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