(Alliance News) - Stocks in London were slightly higher at midday on Friday, with investor attention on the ongoing EU summit over a post-virus economic rescue plan to help revive the bloc's battered economy.
European leaders warned Friday that the future of their union was at stake as they embarked on a summit to thrash out the terms of a huge post-coronavirus economic rescue plan.
Germany's Chancellor Angela Merkel turned 66 as her 26 colleagues returned to Brussels, but she was not there to celebrate, with a planned EUR750-billion stimulus package on the line. Arriving at the European Council, where the leaders met with reduced teams and under social distancing measures, France President Emmanuel Macron described it as a "moment of truth".
However, a determined band of northern capitals - also known as the 'Frugal Four' - is holding out against handing cash to their southern neighbours without their commitment to reform. Friday's talks are expected to run into Saturday and perhaps even Sunday, but few are confident of a breakthrough, despite the tight timetable, so another summit may follow later this month.
The FTSE 100 index was up 26.00 points, or 0.5%, at 6,278.69. The large-cap index is on track to end the week up 3.7%.
The mid-cap FTSE 250 index was up 11.17 points, or 0.1%, at 17,332.46. The AIM All-Share index was flat at 876.32.
The Cboe UK 100 index was up 0.3% at 625.54. The Cboe 250 was 0.2% lower at 14,691.54, and the Cboe Small Companies index was down 0.1% at 9,174.06.
In mainland Europe, the CAC 40 in Paris was down 0.2% while the DAX 30 in Frankfurt was up 0.4%.
"European stocks were choppy and likely set for a volatile finish to the week as EU leaders gather in Brussels for a key summit, with market participants squarely focused on whether the EU can agree to a broad recovery fund as part of the talks over the bloc's budget for 2021-27. Whilst the EU seems to be edging closer to a deal and Merkel and Macron should ultimately get the consensus they need for something like a EUR500 billion to EUR750 billion package of support, there is a risk the market has put too much on this particular meeting and is left disappointed if there is no final decision taken this weekend," said Markets.com analyst Neil Wilson.
The euro was changing hands at USD1.1413 at midday, lower from USD1.1429 at the European equities close Thursday.
"A deal would be a major breakthrough for the EU and show that the bloc has the ability to respond to an era-defining crisis with one voice. Merkel is throwing all her political capital behind the European Recovery Fund, so there more than just EU solidarity riding on it. The Frugal Four of Sweden, Austria, Denmark and the Netherlands remain the main barrier to achieving a deal as they are still to be convinced on why they should be sharing the burden of weaker states, but most countries will be out to fight their corner too. At least they are all back in a room and can talk through the night to trade horses and get something done - not so easy on Zoom, albeit it's an absolute hangar of a room," Wilson added.
In the FTSE 100, Homeserve was the best performer, up 4.0% after the home emergency cover provider said its membership businesses, policy renewal and mid-term cancellation rates have all continued in line with historic trends, spanning April to mid-July.
The home repairs and improvements company added that it has felt no effects from Covid-19 and "customer satisfaction is at record highs" reflecting strong service levels during the pandemic. Homeserve has resumed mergers and acquisitions activity with a strong pipeline of targets and four profitable acquisitions completed in May and June, the most significant of these bringing 38,000 new policy customers in Spain.
Walsall, England-based Homeserve continues to expect to deliver a solid performance in the year ending March 31, 2021.
National Grid was up 2.0% after Deutsche Bank raised the UK power grid operator to Buy from Hold.
Rio Tinto was up 1.7%. The Anglo-Australian miner left its annual guidance unchanged after posting mixed second-quarter production figures. Bauxite and iron ore output grew in the three months to June 30, though there was a double-digit fall in titanium dioxide slag production, figures from the miner showed.
The FTSE 100-listed miner did edge its capital expenditure forecasts higher as the bite from Covid-19 eased and the dollar weakened. Pilbara iron ore production rose 4% year-on-year in the second quarter to 83.2 million tonnes, with shipments edging 1% higher to 86.7 million tonnes.
The pound was quoted at USD1.2545 at midday on Friday, down from USD1.2607 at the London equities close on Thursday.
Stocks in New York look set for a higher open as Wall Street attempts to claw back Thursday's losses.
The DJIA was called up 0.2%, the S&P 500 index up 0.3% and the Nasdaq Composite up 1.0%.
Shares in Netflix will be in focus after the streaming services provider, late Thursday, provided weak subscriber growth guidance for the third quarter, saying, "growth is slowing as consumers get through the initial shock of Covid and social restrictions". The stock is down 6.8% in pre-market trade.
Already out, BlackRock reported a 21% rise in quarterly profit, as investors poured money into its fixed-income funds and cash management services.
The New York-based company's net income rose to USD1.21 billion, or USD7.85 per share, in the second quarter ended June 30, from USD1.00 billion, or USD6.41 per share, a year earlier. The world's largest asset manager posted a 7% rise in assets under management to USD7.3 trillion from USD6.8 trillion in the second quarter last year.
Against the yen, the dollar was trading at JPY107.16, flat from JPY107.11, in London.
Brent oil was trading at USD42.92 Friday midday, down from USD43.72 a barrel late Thursday.
"Prices have drifted down slowly over the last 24 with the long-awaited OPEC+ raise in production now shifting to the rear mirror. The roll-out of phase 2 of the deal is being reported as a negative in some circles this despite the outlook for and even more stout level of compliance," said AxiCorp's Stephen Innes.
Gold was quoted at USD1,803.57 an ounce, soft from USD1,805.00 an ounce.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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