LONDON (Alliance News) - London stocks opened higher Friday, with William Hill being sold after reporting a weak update, while Cable & Wireless led the mid-cap gainers after it confirmed Thursday at the market close that it is in talks with US cable company Liberty Global regarding a possible shares and cash offer for the company.
The company said that shareholders are advised to take no action, and added there can be no certainty any firm offer will be made, or the terms on which any offer may be made. Under UK takeover code, Liberty Global, which is the owner of Virgin Media in the UK, has until November 19 to either announce a firm intention to make an offer, or walk away.
Shares in Cable and Wireless Communications were at the top of the FTSE 250, up 5.9%, having also led the mid-cap index on Thursday, up 21%. The telecoms provider has a market capitalisation of GBP2.70 billion.
Meanwhile, William Hill, down 6.4%, reported a drop in net revenue and operating profit in the third quarter of 2015 and said it now expects full-year operating profit to be around the bottom of the analyst consensus range. The bookmaker said net revenue in the 13 weeks ended September 30 fell 9% on the same period the year before, as operating profit dropped 39%. In the 39 weeks ended September 29, net revenue decreased 3% while operating profit was down 22%.
William Hill said its results were "significantly impacted" by a swing from an outstanding gross win margin in the third quarter of 2014, which included the football World Cup, to a less strong gross win margin in the third quarter of 2015, and faced a GBP23 million hit due to new and increased UK gambling taxes.
TalkTalk Telecom Group was another big faller, down 5.6%. The telecommunications company confirmed that a criminal investigation has been launched by the Metropolitan Police's Cyber Crime Unit following a "significant and sustained" cyber attack on the company's website on Wednesday.
TalkTalk said the investigation by the Met is ongoing but said that the data compromised in the hack may have included names, addresses, dates of birth, phone numbers and email addresses. More importantly, it said the details at risk also included TalkTalk account information and credit card or bank details of its customers.
Shares in Carillion were up 4.3% after JPMorgan upgraded the construction and support services company to Overweight from Neutral. Meanwhile, Travis Perkins was the top performer in the FTSE 100, up 2.2% after being upgraded by Citigroup to Buy from Neutral. The stock had lost 6.0% on Thursday following a profit warning.
Still in the UK corporate calendar, pharmaceutical company Shire provides its third-quarter results at midday.
London stocks are adding more gains to the rally seen on Thursday after ECB President Mario Draghi hinted at further economic stimulus at the central bank's next meeting in December, even saying that further interest rate cuts have been discussed at the meeting that was held this week.
"There were two defining moments in Mr Draghi's press conference: The most important was when he said that 'the degree of monetary policy accommodation will need to be re-examined at our December monetary policy meeting'," highlighted CMC Markets analyst Jasper Lawler.
"The next one was during the Questions and Answers session when he said that, unlike on previous occasions, the European Central Bank did discuss cutting the deposit rate at the October meeting. An explicit reference to both a date and an easing measure was enough to send the euro plummeting and stocks off to the races," added Lawler.
Draghi told a press conference that ECB policymakers had a very "rich discussion" regarding the various monetary policy tools available to them, adding that the central bank's attitude is not "wait and see", but "work and assess".
The ECB president also said that some of the central bank's members wanted stimulus action on Thursday, but he added that it was not the general sentiment in the rate-setting body.
Nevertheless, the ECB left its key interest rates unchanged at a record low for a tenth consecutive policy meeting, with the refinancing rate at 0.05%, the marginal lending rate at 0.30% and the deposit rate unchanged at -0.20%.
In the European economic calendar, eurozone's Markit manufacturing PMI is due at 0900 BST. Before that, the same from Germany is expected at 0830 BST.
Nikesh Sawjani, financial economist at Lloyds Bank said the data will provide some insight at the onset of fourth quarter, key to the possibility of further easing by the ECB.
"We expect the euro area aggregate readings for both manufacturing and services to soften to 51.8 (previous 52.0) and 53.5 (previous 53.7) respectively, signalling a moderate easing in activity," Sawjani said.
In Asia on Friday, the Japanese Nikkei 225 index closed up 2.1%. In China, the Shanghai Composite closed up 1.4%, while the Hang Seng in Hong Kong trades up 1.3%.
The leading economic index for China spiked in September, the latest survey from Conference Board showed, climbing 1.6%. That follows the 1.0% increase in August and the 0.9% gain in July. The coincident index skidded 1.2% after rising 0.7% in August and 1.0% in July.
Wall Street ended higher Thursday. The DJIA closed up 1.9%, the S&P 500 ended up 1.7% and the Nasdaq Composite finished up 1.7%.
On Thursday after the US equity market close, software giant Microsoft announced a profit for its fiscal first quarter that came in well above analysts' expectations. The better-than-expected performance came despite a significant drag from the negative impact of currency exchange rates. Microsoft shares ended up 1.8%.
Alphabet, the newly formed parent company of Internet giant Google, also released an update after the market close and also beat analysts' estimates with its third quarter results. The performance reflects the financial results of Google "as it existed prior to the reorganization," according to the Alphabet statement.
Meanwhile, online retailer Amazon also pleasantly surprised with a profit.
In the US economic calendar Friday, the Markit manufacturing PMI is due at 1445 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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