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(Alliance News) - A rebound in New York overnight on hopes that that further US stimulus may be forthcoming, even if it takes a piecemeal form instead of a trillion-dollar package, helped to boost London stocks on Thursday.

Rolls-Royce and housebuilders were among the risers in the blue-chip FTSE 100, while TalkTalk Telecom jumped to the top of the mid-cap FTSE 250 index as it received a preliminary takeover bid.

The FTSE 100 index was up 35.11 points, or 0.6%, at 5,981.36 midday Thursday. The FTSE 250 index was up 200.38 points, or 1.1%, at 18,002.13. The AIM All-Share index was 0.4% higher at 977.68.

The Cboe UK 100 index was up 0.5% at 594.98. The Cboe 250 was up 1.2% at 15,295.08, and the Cboe Small Companies down 0.1% at 9,460.95.

In mainland Europe, the CAC 40 in Paris was up 0.5% while the DAX 30 in Frankfurt was 0.6% higher Thursday afternoon.

"A softening of Trump's tone on stimulus has allowed stock markets to keep moving higher, after a rebound in US indices yesterday that saw Tuesday's losses wiped out," said Chris Beauchamp, chief market analyst at IG.

After tweeting that he had called off talks over a US stimulus package with Democrats, President Donald Trump appeared to shift gears and said he would support targeted handouts.

Optimism over a new package was wiped out after Trump ruled out any new stimulus spending until after the November 3 election, sending US stocks tumbling on Tuesday. However, Trump then returned to Twitter to call for stand-alone measures to help airlines and provide new stimulus checks to individuals.

Equities in New York rallied on Wednesday, and stocks are set to extend gains on Thursday. The Dow Jones and S&P 500 are both called up 0.4%, while the Nasdaq Composite is seen 0.7% higher.

Beauchamp added: "As earnings season approaches once more in the US stock markets have managed to find their footing, although with estimates looking much stronger than at the same point in Q2 perhaps much of the good news is already in the price."

Focus now turns to US unemployment insurance weekly claims at 1330 BST. Consensus, according to FXStreet, is looking for 820,000 weekly initial claims, which would be down from 837,000 the week before.

The dollar was muted heading into the initial claims release.

Against the yen, the dollar was quoted at JPY105.99 versus JPY105.96. The euro traded at USD1.1764, soft on USD1.1766 late Wednesday.

Sterling was quoted at USD1.2920 on Thursday, a touch higher than USD1.2919 at the London equities close on Wednesday.

Bank of England Governor Andrew Bailey has said policymakers are not "out of firepower" and will take prompt action to support the economy through a second or third wave of coronavirus.

Speaking at a virtual conference on banking stability, Bailey cautioned the risks to the UK economy were "very much to the downside" due to spiralling numbers of Covid-19 cases and increasing measures to bring it under control.

He said Britain was seeing a very "uneven" recovery, with some sectors bouncing back strongly and others remaining severely under-pressure.

Gold was quoted at USD1,892.20 an ounce midday Thursday, slightly higher USD1,887.20 on Wednesday. Brent oil was trading at USD42.35 a barrel Thursday, rising from USD41.62 late Wednesday.

In London, Rolls-Royce shares were at the top of the FTSE 100 amid further volatility in the jet engine maker's stock price.

Rolls-Royce was up 14% on Thursday, currently up 57% since the week started. Last week, the stock shed more than 25% as the firm set out plans for a balance sheet boosting GBP2 billion rights issue, a GBP1 billion bond offering and the possibility of GBP2 billion more in loans.

Rolls-Royce shares remain 74% lower since the start of 2020.

Also higher in the blue-chip index was GVC, up 4.0% after boosting its earnings guidance following a strong third quarter.

The FTSE 100 sports-betting and gaming group said in its third quarter from July 1 to September 30, group net gaming revenue rose 12% year-on-year - or 14% in constant currency - aided by online net gaming revenue which surged by 26%, or 28% in constant currency.

GVC added it has seen continued momentum in the US, with full-year net revenue for the territory now expected to be ahead of expectations at USD150 million to USD160 million. Its joint venture with MGM Resorts BetMGM is now live in eight states, with a further three expected to launch before the end of 2020.

Full-year group earnings before interest, tax, depreciation and amortisation is expected to be between GBP770 million to GBP790 million, around GBP50 million ahead of previous guidance.

Housebuilders were higher after the the Royal Institution of Chartered Surveyors said UK housing market activity was strong in September.

A net balance of 52% of property professionals reported an increase rather than a decrease in new buyer inquiries in September. A balance of 55% of professionals saw the number of agreed sales increase rather than decrease in September.

A balance of 17% of surveyors expect sales to increase rather than decrease in the next three months – but looking further ahead, the majority expect sales to fall. A balance of 34% of property professionals said in September that they expect sales to be lower in 12 months' time, moving deeper into negative territory than 17% who felt this way in August.

Looking ahead, a net balance of 23% of professionals see prices continuing to rise over the next three months.

Taylor Wimpey shares were up 4.9% at midday, Barratt Developments up 3.3% and Berkeley Group up 1.8%.

Hargreaves Lansdown fell 5.4% despite reporting higher revenue and assets in the first quarter.

Hargreaves's revenue for the three months ended September 30 was GBP143.7 million, a 12% increase from the year before. Closing assets under administration for the period came to GBP106.9 billion, 2.8% higher than the opening AuA of GBP104.0 billion, thanks to a GBP2.1 billion positive market movement plus new business.

New business in the period was GBP800 million, down from GBP1.7 billion the year before - though the year before figure was also GBP800 million excluding back book transfers.

TalkTalk Telecom rallied to the top of the FTSE 250 on a GBP1.1 billion takeover approach from shareholder Toscafund Asset Management.

The offer for TalkTalk's entire share capital is priced at 97p per share, has a full unlisted share alternative, and is to be made by a newly formed company. TalkTalk has 1.15 billion shares in issue, meaning the offer would be worth around GBP1.12 billion.

"The board has considered the terms of the proposal and has agreed to progress the proposal further with TAM along with taking advice from the company's advisers," said TalkTalk, adding that there can be no certainty a firm offer will be made.

By Lucy Heming; lucyheming@alliancenews.com

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