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(Alliance News) - Stock prices in London opened higher on Tuesday with WM Morrison Supermarkets leading the FTSE 100, while in the FTSE 250 Premier Oil surged after announcing a deal to buy assets from BP.
The UK flagship index was up 11.56 points, or 0.2%, at 7,586.90. The mid-cap FTSE 250 index was up 98.87 points, or 0.5%, at 21,858.28. The AIM All-Share index was up 0.3% at 963.47.
The Cboe UK 100 index was up 0.3% at 12,857.39. The Cboe 250 was up 0.2% at 19,747.61 and the Cboe Small Companies flat at 12,311.02
In mainland Europe, the CAC 40 in Paris was up 0.5% and the DAX 30 in Frankfurt was up 0.7%.
On the London Stock Exchange, Morrisons was the best blue-chip performer, up 2.6% despite the 'Big Four' UK supermarket chain reporting a fall in sales in the 22 weeks to January 5.
During the period, the grocer said like-for-like sales, excluding fuel, were down 1.7% year-on-year. The decline was solely due to a fall in retail sales, as like-for-like performance in the wholesale unit was flat year-on-year.
Total sales, were down 2.9% year-on-year, but declined 1.8% when not including fuel sales.
The grocer reiterated its full-year guidance, expecting pretax profit before exceptional costs to be in line with analysts' forecasts. Morrisons ends its financial year on February 2.
Interactive Investor's Richard Hunter noted: "There are some rays of light, however. The previously announced special dividend gives the stock a prospective yield of around 4% and is indicative of a well-managed balance sheet. Meanwhile, full-year profit guidance has been maintained despite the lack of fireworks over the period, perhaps largely due to Morrisons' focus on the reduction of costs.
"Meanwhile, any improvement at McColl's will feed through quickly, while the extended tie-up with Amazon also underwrites expected growth. The incremental improvements which Morrisons has tended to display over recent times have been part of a turnaround plan which has had the effect of leaving the business leaner and therefore more equipped to deal with its competition."
Fellow grocers J Sainsbury and Tesco issue trading statements on Wednesday and Thursday respectively.
BAE Systems was up 2.0% after JPMorgan raised the defence stock to Overweight from Neutral.
At the other end of the large-cap index, Rentokil Initial was the worst performer, down 3.7% after Credit Suisse cut the pest control company to Neutral from Outperform.
SSE was down 0.5% after Goldman Sachs downgraded the energy company to Neutral from Buy.
In the FTSE 250, Premier Oil was the standout performer, up 13% after the oil and gas company said it has agreed to acquire Andrew Area and Shearwater North Sea assets from oil major BP for USD625 million.
BP shares were down 0.3%.
The midcap oil company also is to acquire an additional 25% interest in the Premier Oil operated Tolmount Area from Dana Petroleum for USD191 million. The proposed acquisitions, Premier said, will be funded via a USD500 million equity raise which has been "fully underwritten on a standby basis" and existing cash.
In addition, Premier Oil reported 2019 production of 78,400 barrels of oil equivalent per day, which is at the upper end of guidance.
Marks & Spencer was up 5.0% after Berenberg double upgraded the food, clothing and homewares retailer to Buy from Sell.
Comfortably worst performing among the midcaps, Aston Martin Lagonda Global Holdings was down 11% after the luxury carmaker said difficult trading conditions it experienced throughout 2019 continued through December, resulting in lower sales, higher selling costs and lower margins.
The Gaydon, Warwickshire-based firm said core car wholesales declined 7% year-on-year to 5,809 units. It attributed the poor performance to a weaker mix of vehicles and lower-than-expected wholesale sales. Aston Martin now sees 2019 adjusted earnings before interest, tax, depreciation and amortisation to come in at a range between GBP130 million and GBP140 million. In 2018, adjusted EBITDA came in at GBP247 million.
The Japanese Nikkei 225 index closed up 1.6% on Tuesday. In China, the Shanghai Composite closed up 0.7%, while the Hang Seng index in Hong Kong closed up 0.3%.
The pound was quoted at USD1.3161 early Tuesday in London, flat from USD1.3165 late Monday.
UK Prime Minister Boris Johnson is to chair a meeting of the National Security Council as Britain continued to urge all sides in the Middle East crisis to draw back from all-out conflict.
Foreign Secretary Dominic Raab spoke on Monday to his Iranian counterpart Mohammed Javad Zarif to stress the need for a diplomatic resolution to avoid a renewed conflict in the region.
Tehran has vowed "severe revenge" for the killing of its top military commander Qassem Soleimani in a US drone strike last week.
President Donald Trump in turn has warned the US was ready to strike back in a "disproportionate" manner if the Iranians hit US targets.
The euro was quoted at USD1.1175 early Tuesday, lower than USD1.1187 late Monday.
Against the yen, the dollar was trading at JPY108.33, flat from JPY108.37 late Monday.
Oil was quoted at USD68.28 a barrel Tuesday, lower than USD68.94 late Monday, slipping back from the USD70 mark reached on Monday.
Gold was quoted at USD1,567.70 early Tuesday, firm against USD1,562.34 late Monday, though retreating from multi-year highs reached on Monday.
The economic events calendar on Tuesday has eurozone inflation figures at 1000 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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