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(Alliance News) - Stock prices in London opened higher on Wednesday with the FTSE 100 aided by a rise in gold miners following record highs for the precious metal.
The UK flagship FTSE 100 index was up 63.75 points, or 1.1% at 6,100.09. The mid-cap FTSE 250 index was up 81.71 points, or 0.5%, at 17,389.45. The AIM All-Share index was up 0.5% at 898.92.
The Cboe UK 100 index was up 1.1% at 606.19. The Cboe 250 was up 0.5% at 14,723.68 but the Cboe Small Companies down 0.2% at 9,104.65.
In mainland Europe, the CAC 40 in Paris was up 0.6%, while the DAX 30 in Frankfurt was up 0.4%.
"Despite the underlying issues driving [gold] higher - be it the looming spectre of a second wave in Europe, the lack of progress on the latest covid-19 relief package in the States, or the TikTok-related tensions between the US and China - the European markets bounded out of the gates on Wednesday. The FTSE, aided by the likes of gold-miner Fresnillo...allowing the UK index to cross 6,100 once again," said Spreadex analyst Connor Campbell.
In the FTSE 100, Coca-Cola HBC was up 4.8% after the soft drinks bottler expressed confidence in its prospects going forward, despite posting a drop in interim earnings.
For the six months ended June 26, net sales revenue fell 16% to EUR2.83 billion from EUR3.35 billion last year, and operating profit declined 30% to EUR202.9 million from EUR288.9 million. Pretax profit fell 36% to EUR167.2 million from EUR260.8 million.
Coca-Cola HBC attributed the decline in revenue on closures of bars and restaurants on its out-of-home business, which it said typically accounts for around 40% of its revenue.
Looking ahead, Coca-Cola HBC said current trading continues to confirm sequential improvement - with the second quarter the "trough" of performance caused by Covid-19.
Gold miners were in the green after the precious metal surged to fresh record highs, breaking decisively about the USD2,000 barrier in the process.
Gold was quoted at USD2,031.59 an ounce on Wednesday morning, up sharply from USD1,995.19 an ounce at the London equities close Tuesday. Bullion hit a record high of USD2,036.55 overnight.
Mexican gold miner Fresnillo and Russian gold miner Polymetal International were up 3.5% and 4.5% respectively.
Unease about the progress of US stimulus talks, the ever-weaker dollar caused by Federal Reserve monetary easing, and new flare-ups in virus infections around the world sent gold surging to fresh record highs.
"The latest rise in US-China tensions that brings the [phase one] trade deal into question adds to an extensive laundry list of concerns that are sending investors toward safe-haven assets, and gold seems to be top of that list," noted Stephen Innes, chief global markets strategist at AxiCorp.
Broadcaster ITV was up 4.0% after Deutsche Bank upgraded the broadcaster to Buy from Hold.
At the other end of the large caps, Legal & General was the worst performer, down 2.5% after the insurer, pensions provider and investment manager reported a drop in interim profit amid increased claims related to Covid-19.
For the half-year ended June 30, operating profit declined 6.3% to GBP946 million from GBP1.01 billion last year, while pretax profit dropped much more steeply, down 73% to GBP285 million from GBP1.05 billion.
"Legal & General remains a stable business in an unstable environment, although the sector in which it operates remains generally unloved," said Interactive Investor's Richard Hunter.
"For all the resilience the company has shown, L&G has struggled to make headway in the face of investor pessimism, despite the more obvious long-term potential which the sector offers. While the price has made something of a recovery in the last three months, rising by 11%, this does not mask an overall decline for the last year, where the shares remain down 13%, which compares to a decline of 16% for the wider FTSE 100," Hunter added.
The pound was quoted at USD1.3105 early Wednesday, up from USD1.3062 at the London equities close Tuesday.
The euro stood at USD1.1812, up from USD1.1769. Against the yen, the dollar was quoted at JPY105.60, lower from JPY105.87.
Brent oil was quoted at USD44.37 Wednesday morning, firm from USD44.27 a barrel at the London equities close Tuesday.
The Japanese Nikkei 225 index ended down 0.3%. In China, the Shanghai Composite closed up 0.2%, while the Hang Seng index in Hong Kong is up 0.7%.
Growth of the Chinese service sector remained elevated during July as the economy maintained its recent recovery from the coronavirus pandemic, figures from the Caixin Insight Group showed.
The headline seasonally adjusted business activity index recorded 54.1 in July, down from 58.4 in June. Whilst down on the previous month's more than ten-year record, the index again signalled a marked rise in activity that was in line with the survey's long-term trend.
The economic events calendar has services PMI readings from the eurozone and the UK at 0900 BST and 0930 BST respectively. The same is due from the US at 1445 BST, and before this is ADP employment change at 1315 BST and the trade balance at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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