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(Alliance News) - Blue-chip stock prices in Europe opened higher on Thursday, shaking off a weak handover from Asia, with equipment rental firm Ashtead leading the way in London after a strong first quarter.
Economic growth concerns and political tensions weighed on Asian markets, which failed to replicate Wall Street's strong gains overnight.
The FTSE 100 index was up 30.84 points, or 0.4%, at 7,047.33. The mid-cap FTSE 250 index was up 120.03 points, 0.5%, at 23,552.84. The AIM All-Share index was up just 0.19 of a point at 1,273.75.
The Cboe UK 100 index was up 0.2% at 701.23. The Cboe 250 also was up 0.2%, at 21,287.38. The Cboe Small Companies advanced 0.2% to 15,504.64.
In mainland Europe, the CAC 40 stock index in Paris was up 0.8% and the DAX 30 in Frankfurt was 0.6% higher.
In New York on Wednesday, the Dow Jones Industrial Average rose 0.7%, the Nasdaq Composite ended 0.8% higher and the S&P 500 added 0.9%.
"With industrial production in the US growing close to expectations in August and the NY Fed's manufacturing survey rebounding nicely in September, Wall Street regained its mojo yesterday with industrials and materials stocks adding to a sharp rally in energy stocks thanks to a rebound in the price of crude oil," commented Daiwa Capital Markets analyst Emily Nicol.
The Shanghai Composite ended down 1.3% on Thursday. The Hang Seng Index in Hong Kong was 1.7% lower, hit by heavy declines in the technology and casino sectors, two industries that have faced government crackdowns from Beijing.
The Nikkei 225 in Tokyo closed down 0.6%, but the S&P/ASX 200 in Sydney added 0.6%.
Daiwa's Nicol added: "Today's decline reflects a continuation of the worries that have weighed in recent days. Stock in troubled developer China Evergrande slumped further after one its units was forced to temporarily suspend bond trading following a downgrade of its credit rating by a local rating agency. Meanwhile, the likes of Tencent Holdings also fell for a fourth day amidst reports that Chinese regulators are seeking to slow down video game releases to allow time for whether they meet the new stricter rules on content, amongst other things aimed at preventing addiction."
In London, Ashtead was one of the best performers in the FTSE 100, rising 2.8%.
The equipment rental firm tipped its full-year results to be "ahead of its earlier expectations". In the financial first quarter to July 31, revenue rose 21% year-on-year to USD1.85 billion from USD1.51 billion. Rental revenue alone rose 22% to USD1.67 billion from USD1.35 billion a year earlier.
Pretax profit surged 74% to USD415.8 million from USD240.6 million.
Two years earlier, Ashtead posted pretax profit of GBP319.0 million, which amounts to about USD441.0 million, so ahead of the recent quarter at current exchange rates. Revenue at the time was GBP1.28 billion, about USD1.77 billion, below its revenue result for the first quarter of financial 2022.
"The group delivered a strong quarter with rental revenue up 22% over the prior year, but more importantly up 12% when compared with the first quarter of 2019-20, both at constant currency. This reflects continued market outperformance across the business," Chief Executive Brendan Horgan said.
"In the quarter, we invested USD551 million in capital across existing locations and greenfields and USD123 million on five bolt-on acquisitions, adding a combined 29 locations in North America. This investment takes advantage of the ongoing structural growth opportunity that we continue to see in the business."
Looking to the full-year, Ashtead raised group rental revenue guidance. It now expects rental revenue climb of 13% to 16%, up markedly from the previous growth forecast of 6% to 9%.
Among mid-caps, IG Group rose 4.7% as the trading firm said first quarter revenue improved.
Adjusted net trading revenue in the quarter ended August 31 was 6.1% higher year-on-year at GBP221.7 million from GBP209.0 million.
"The strong business performance in the quarter reflects the size and quality of the group's active client base. The group remains confident of achieving its medium term targets for the Core Markets+ and High Potential Markets portfolios," IG Group said.
C&C Group, which owns the Magners and Bulmers cider brands, said trading has been boosted by staycations, the European Football Championships and a "summer of good weather".
Its shares were 5.0% higher.
For the six months to August 31, C&C said it expects to report revenue of EUR657 million, which would be up almost two-thirds from EUR398 million and year earlier. It is down 27% from EUR896 million from two years earlier, however.
C&C also expects to see a swing to profit, forecasting operating profit of EUR16 million, after a EUR12 million loss a year earlier.
"With the gradual easing of restrictions in the UK on-trade from April 2021, the group returned to profit and underlying cash generation in May 2021, demonstrating the inherent strength of C&C's business model. Trading performance continued to improve from May 2021 and Irish outdoor hospitality reopened from June 2021," C&C said.
"As widely publicised, the UK is experiencing a shortage of heavy goods vehicle drivers, however, with the group's distribution network controlled in-house, we have been partly insulated and as a consequence have broadly met customer demand through the peak summer trading period. We continue to work closely with our partners to meet the resurgence in demand."
The travel sector enjoyed a good start to Thursday's session. Ryanair climbed 4.5% as it forecast a strong re-emergence from Covid-19.
Ryanair is targetting annual traffic of 225 million passengers by March 2026, up from its previous target of 220 million and the 149 million it carried before the Covid-19 pandemic. It has lifted its five-year traffic growth forecast to 50% from 33% previously.
Ryanair also plans to take delivery of 210 Boeing 737 "gamechanger" aircraft over the next five years.
"These aircraft will deliver industry lowest costs, reduced emissions, and will enable Ryanair accelerate its post-Covid growth, as opportunities open up at primary and secondary airports all over Europe, particularly where legacy carriers have failed or reduced fleet sizes as a result of Covid and state aid," Ryanair added.
Peers easyJet and Wizz Air were 3.2% and 2.7% higher.
The dollar was mixed early on Thursday. The pound was quoted at USD1.3831, up from an intraday low of USD1.3812, but down from USD1.3840 at the London equities close on Wednesday. The euro faded to USD1.1791 from USD1.1817. Against the yen, the dollar was trading at JPY109.33, down from JPY109.38.
The economic events calendar on Thursday has eurozone trade figures at 1000 BST and US retail sales numbers and latest jobless claims figures at 1330 BST.
US retail sales are tipped to fall 0.8% monthly, according to FXStreet cited consensus.
"When set against the recent payrolls report for August, which showed that jobs growth in hospitality and leisure come to a shuddering halt, the slide in consumer confidence and rise in headline CPI, doesn't bode well for the winter, given that for a lot of the US, August is the last hurrah for the summer season, especially in the northern states," CMC Markets analyst Michael Hewson commented.
Brent oil was quoted at USD75.37 a barrel early Thursday, down from USD75.75 late Wednesday. Gold was trading at USD1,785.42 an ounce, down from USD1,792.85.
By Eric Cunha; ericcunha@alliancenews.com
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