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(Alliance News) - Stock prices in London opened higher on Thursday, attempting to claw back some of Wednesday's steep losses, while ticket seller Trainline fell sharply on UK government plans to reform the railways.
The FTSE 100 index was up 26.80 points, or 0.4%, at 6,977.91. The mid-cap FTSE 250 index was up 69.93 points, or 0.3%, at 22,305.77. The AIM All-Share index was up 0.3% at 1,232.73.
The Cboe UK 100 index was up 0.5% at 696.04. The Cboe 250 was up 0.3% at 20,062.69, and the Cboe Small Companies was flat at 14,781.04.
In mainland Europe, the CAC 40 in Paris was up 0.8%, while the DAX 30 in Frankfurt rose 0.7%.
"Markets in Europe have opened broadly higher this morning as they recover some of the losses from the swathe of selling on Wednesday, whilst the Federal Reserve underscored it's in no rush to tighten monetary policy, minutes from its April meeting showed," said Markets.com analyst Neil Wilson.
In the FTSE 100, NatWest Group was up 1.5% after RBC Capital upgraded the state-backed lender to Outperform from Sector Perform.
Kingfisher was up 1.0% after the DIY retailer raised its profit guidance as the pandemic-spurred demand for home-improvement supplies continued in its first quarter.
For the three months to April 30, Kingfisher reported total group sales of GBP3.44 billion, up 64% on a like-for-like basis, supported by strong demand in the UK and France as well as continued e-commerce sales progress.
Following the upbeat performance, Kingfisher raised its first-half like-for-like sales growth view to mid-to-high teens from low double-digit. It also anticipates first-half adjusted pretax profit to be ahead of previous expectations, in the range of GBP580 to GBP600 million. Kingfisher posted adjusted pretax profit of GBP415 million in the first half of last year.
At the other end of the large-caps, Fresnillo and Tesco were the worst performers, down 2.1% and 1.8%, respectively, after the stocks went ex-dividend meaning new buyers no longer qualify for the latest payout.
BT Group was down 1.5% after Berenberg downgraded the telecommunications firm to Hold from Buy. In addition, BT shares were hurt after the GBP31 billion mega-merger between Virgin Media and O2 has been given the green light by UK regulators.
The Competition & Markets Authority waved through the deal following an in-depth investigation, concluding that concerns customers would see price hikes from the telecoms deal were unfounded. Officials had provisionally cleared the deal last month and on Thursday confirmed the tie-up, which was first announced a year ago.
In the FTSE 250, Future was the best performer, up 7.7% at 2,852.50 pence, after Deutsche Bank hike its price target to 2,900p from 2,190p and reiterated its Buy rating.
Future on Wednesday closed up 12% after the magazine publisher said it delivered a robust first-half performance extending its track record of growth in revenue and profit.
Genuit Group was up 4.5% after the plastic piping systems maker said revenue for the four months ended April 30, was GBP193 million, up 32% from GBP146.6 million a year ago.
Genuit said it has seen a robust start to the year and now expects underlying operating profit to be close to the top end of the current consensus because of the stronger-than-anticipated revenue growth in the period to April 30. Underlying operating profit consensus is GBP85 million, with a range of GBP80 million to GBP88 million.
At the other end of the mid-caps, Trainline was by far the worst performer, down 22%, after the UK government announced plans to create a new public railway operator called Great British Railways, to simplify a system that is "too complicated", Transport Secretary Grant Shapps said.
Great British Railways will own and manage rail infrastructure, issue contracts to private firms to run trains, set most fares and timetables, and - significantly for Trainline - sell tickets.
It will absorb Network Rail in a bid to end what the UK Department for Transport branded a "blame-game system" between train and track operations when disruption occurs. GBR is not expected to be established until 2023.
Still, the move poses a direct threat to Trainline which operates an online platform for rail and and bus tickets.
Shapps said during the 2018 timetable fiasco there was no "Fat Controller" in charge of the system, referencing the Thomas The Tank Engine stories.
He told Sky News: "It's just too complicated". The Cabinet minister, who described himself as a commuter who wants "a railway that works", added: "It's a simplification which I think people will broadly welcome."
In Asia, the Japanese Nikkei 225 index closed up 0.2% on Thursday. In China, the Shanghai Composite ended down 0.1%, while the Hang Seng index in Hong Kong was down 0.6%. The market in Hong Kong reopened on Thursday after being closed for a holiday on Wednesday.
In the US on Wednesday, Wall Street ended in the red, with the Dow Jones Industrial Average down 0.5%, S&P 500 down 0.3%, and Nasdaq Composite marginally lower.
Some US Federal Reserve officials believe it may soon be time to consider tapering asset purchases meant to aid the US economy's recovery from the virus pandemic, according to meeting minutes released Wednesday.
In the minutes, policy makers noted the economy "remained far from the [FOMC's] maximum-employment and price-stability goals" and, as a result, "it would likely be some time until the economy had made [the] substantial further progress "needed to begin tapering those purchases".
The minutes continued: "A number of participants suggested that if the economy continued to make rapid progress toward the committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases."
The Fed also said "the expected surge in demand as the economy reopens further, along with some transitory supply chain bottlenecks, would contribute to [personal consumption expenditure] price inflation temporarily running somewhat above 2%."
Meanwhile, bitcoin stabilised after Wednesday's wild swings that saw the cryptocurrency collapse by almost a third in one day before recovering most of its losses.
"Markets were in a broad risk-off mode yesterday. There is talk of greater correlation between crypto and risk assets these days - certainly when you see a big move in either direction they tend to follow each other," Wilson noted.
The dollar was stronger across the board following the Fed meeting minutes.
The pound was quoted at USD1.4131 early Thursday, down from USD1.4155 at the London equities close Wednesday.
The euro was priced at USD1.2193, lower from USD1.2216. Against the yen, the dollar was trading at JPY109.06, up from JPY108.68.
Brent oil was quoted at USD66.98 a barrel Thursday morning, up from USD66.06 late Wednesday. Gold was trading at USD1,876.15 an ounce, lower against USD1,883.00.
In the international economics calendar on Thursday, eurozone construction output is at 1000 BST and US initial jobless claims at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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