3i Group Share News (III)

LONDON (Alliance News) - London's main stock indices closed higher Thursday, tracking the US markets higher, with movements in volatile bond markets again proving the main driver for the equities markets.

The FTSE 100 ended up 0.3% at 6,973.04 points, while the FTSE 250 closed up 0.4% at 17,929.33. The AIM All-Share underperformed, closing down 0.1% at 759.47.

The CAC 40 in Paris ended up 1.4%, while the DAX 30 in Frankfurt closed up 1.8%.

When the European stock markets closed, Wall Street was higher, with the DJIA up 0.8%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.9%. The market was following a rise in US Treasuries prices, and a drop in yields, providing relief after recent rises in yields.

Spreadex analyst Connor Campbell said that after a fluctuating morning for the European indices, the higher open for US stocks introduced some tentative stability into European stock markets.

Negative sentiment from an unexpected drop in US producer prices in April was partially offset by a decrease in US initial jobless claims in the week ended May 9th, but still weighed on the dollar as it increased uncertainty about when the Federal Reserve might start raising US interest rates.

The US Labor Department said its producer price index for final demand fell by 0.4% in April after edging up by 0.2% in March, largely due to the steep drop in energy prices, which plunged by 2.9% in April after jumping by 1.5% in March. The PPI index had been expected to show another 0.2% increase.

US initial jobless claims edged down to 264,000, a decrease of 1,000 from the previous week's unrevised level of 265,000. The modest decrease came as a surprise to economists, who had expected initial jobless claims to climb to 275,000.

With the dollar under pressure against other major currencies, the pound reached a near six-month high against the dollar of USD1.5811. Sterling was trading at USD1.5744 when the European stock markets closed.

Private equity company 3i Group was the best performer in the FTSE 100, up 3.0%, after it reported a double-digit total return in its last financial year. It said its total return of GBP659 million, equivalent to a profit on opening shareholders' funds of 19.9%, in the year ended March 31, compared with GBP478 million or 16.3% in the prior year.

However, Chairman Adrian Montague issued a note of caution on the high valuations seen across "many financial markets" and currency volatility.

Hikma Pharmaceuticals, up 2.4%, reiterated its guidance for 2015, saying it had made a good start to the year, and expressed confidence for growth over the longer-term. Hikma continues to expect revenue growth of around 6% at constant currency for the full year, although it also continues to expect the strong dollar to hit revenue and therefore at actual exchange rates expects growth of 2%.

Centrica ended up 1.6%. Jefferies initiated the energy company with a Buy recommendation and a price target of 310p saying it looks attractive now that political and market conditions have stabilised.

ITV shares ended down 1.0% despite reiterating expectations for further strong growth across its business for 2015 and posting a rise in revenue for its first quarter, as a weaker second quarter outlook for net advertising, lower share of viewing, and a staff strike overshadowed its strong start to the year.

ITV said it expects its net advertising revenue to fall in the next few months. The broadcaster said ITV Family net advertising revenue was up 5% in April, but is forecast to be down 5% in May and down by between 5% and 7% in June, as in the previous year results were boosted by the World Cup. As a result, ITV is guiding for 5% growth for its first half.

Kingfisher ended down 2.3%, J Sainsbury down 2.3%, GlaxoSmithKline down 1.4%, Aberdeen Asset Management down 1.4%, and Royal Dutch Shell 'A' and 'B' down 1.3% and 1.1% respectively, as the stocks went ex-dividend, meaning no further buyers of the shares qualify for the next dividend payout. Glaxo also was downgraded to Neutral from Buy by UBS.

In the FTSE 250, TalkTalk Telecom Group closed up 5.8%. The telecommunications company upgraded its compound annual revenue growth target through the financial year 2017, and expects to grow revenue by at least 5% per year beyond 2017, as it posted a rise in pretax profit for its recently ended financial year.

For the year to end-March, TalkTalk posted a pretax profit of GBP32 million, up from GBP31 million a year before, as a rise in revenue to GBP1.80 billion from GBP1.72 billion offset exceptional costs of GBP63 million.

Restaurant Group, down 4.4%, was the worst-performing stock in the mid-cap index. The group reported growth in sales for the 19 weeks to May 10, as it continues to expand its property portfolio, and said it is on track for continued good performance throughout the remainder of the year. It said sales were up 8.5% in the 19 weeks, with like-for-like sales up 2% on the same period a year earlier. However, in the same period last year sales grew 11% on the year, while like-for-like sales were up 4%.

Keller Group was down 4.1% after it said profit and revenue fell in the first four months of 2015 due to the completion of a project in Australia, delays on major projects and the impact of adverse weather conditions in North America.

In the corporate calendar Friday, Coca-Cola HBC releases first-quarter results, while Intertek Group issues a trading statement. Bovis Homes Group, Tyman and Enquest issue interim management statements.

In the economic calendar, Japanese consumer confidence index is due at 0600 BST. In the US, industrial production is due at 1415 BST, while the Reuters/Michigan consumer sentiment index is at 1500 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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