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(Alliance News) - Stock prices in London were higher at midday on Thursday as investors await an interest rate decision from the European Central Bank, while earnings season in the US continues with several high-profile companies reporting.
The FTSE 100 index was up just 3.14 points at 6,898.43. The mid-cap FTSE 250 was up 128.25 points, or 0.6%, at 22,213.98. The AIM All-Share index was up 1.0% at 1,258.05.
The Cboe UK 100 index was down 0.1% at 686.71. The Cboe 250 was up 0.5% at 19,842.59. The Cboe Small Companies was 0.2% lower at 14,369.64.
In mainland Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were up 0.5% and 0.7% respectively.
"Gains are likely to be limited ahead of this afternoon's European Central Bank meeting. The central bank is expected to keep interest rates and its asset-purchase programs unchanged today. Market participants will rather be looking for clues on how long the ECB will keep buying bonds at an accelerated pace," commented Axi's Milan Cutkovic.
The euro stood at USD1.2048 at midday, up slightly from USD1.2034 late Wednesday, ahead of the European Central Bank rate decision at 1245 BST.
ECB President Christine Lagarde holds a press conference at 1330 BST and is expected to stress the central bank's commitment to cheap money as Europe's biggest economies battle a surge in coronavirus infections that could slow the eurozone recovery.
After calming jittery markets last month by promising to "significantly" step up the pace of its pandemic emergency bond purchases, the ECB's 25-member governing council is under no pressure to take fresh action, analysts say.
The Frankfurt institution is widely predicted to hold interest rates at historic lows, including a deposit rate of minus 0.5% – meaning banks pay to store excess cash with the ECB. No tweaks are expected either to the EUR1.85 trillion pandemic emergency bond purchasing programme, set to run until March 2022.
"The ECB press conference might well be reassuringly boring this time," commented Berenberg economist Holger Schmieding.
However, the Bank of Canada on Wednesday bucked the dovish trend from global central banks saying that it would bring forward its rate hike forecasts to next year and pare back pandemic asset purchases.
Looking ahead the BoC believes that the Covid-19 pandemic will be less detrimental to Canadian economy's output than previously expected.
"The EU resumed its usage of the Johnson & Johnson vaccine, which should speed up the process. Europe is basically 4 to 6 weeks behind the US which means it is only a matter of time before their recoveries gain momentum. The ECB knows this and the big question is whether they will acknowledge it. If the ECB expresses the same optimism as the BoC, EUR/USD could make a run for 1.21. If they remain cautious and suggest that stimulus could increase, EUR/USD could test 1.19 with more significant losses for euro against the crosses," said analysts at BK Asset Management.
In the FTSE 100, Polymetal International was up 2.5% after the Russian gold miner said revenue and output grew in its first-quarter.
Gold production rose 4% annually in three months to March 31 to 337,000 ounces, from 324,000 ounces. Gold equivalent production rose 3% to 375,000 ounces from 365,000 ounces a year earlier.
Polymetal affirmed its full-year target of gold equivalent production of 1.5 million ounces.
Segro was up 1.5% after the warehouse property investor said the signing of new rental and pre-let agreements in the opening months of 2021 were up from the previous year.
Segro said it had signed GBP18 million of new headline rent in its first quarter, up 26% from GBP14.3 million in 2020. Headline rent is annualised gross passing rent receivable once incentives such as rent-free periods have expired.
The signing of new pre-let agreements saw a similar improvement, almost doubling to GBP11.3 million in the first quarter, up from GBP5.7 million the previous year.
At the other end of the large-caps, BAE Systems and Antofagasta were the worst performers, down 3.5% and 2.0% respectively. The stocks went ex-dividend, meaning new buyers no longer qualify for the latest payout.
Informa was down 1.9%, surrendering an earlier gain, after the publishing and exhibitions firm swung to an annual loss due to event cancellations, but it pointed to a recovery as global vaccination programmes rollout.
For 2020, Informa swung to a pretax loss of GBP1.14 billion after posting a profit of GBP318.7 million in 2019, as revenue slumped 43% to GBP1.66 billion from GBP2.89 billion in the prior year.
Looking ahead, Informa views 2021 as a "transition year", with continued growth in both Subscriptions-led businesses and further expansion in B2B digital services, supported by a progressive return in B2B physical events. The company pointed to an easing of Covid-19 restrictions and customer confidence rebuilding as reasons for optimism.
In the FTSE 250, Morgan Sindall was the standout performer, up 11%. The construction company said that, since its annual results in February, all divisions have made further positive operational and strategic progress, with total secured workload of GBP8.1 billion as of March 31.
Morgan Sindall said it is now on track to deliver a full-year performance which is "significantly ahead" of its previous expectations.
At the other end of the FTSE 250, AJ Bell was 2.0% lower after the retail investment platform reported a slowdown in net inflows and assets under administration in the second quarter of financial 2021.
AJ Bell reported net inflows of GBP1.5 billion in the three months ended March 31, down from GBP1.6 billion the previous quarter. Assets under administration increased 4.3% to GBP65.2 billion from GBP62.5 billion, a slowdown from the previous quarter's 11% growth.
The pound was quoted at USD1.3907 at midday on Thursday, lower from USD1.3937 at the London equities close Wednesday.
Brent oil was quoted at USD64.96 a barrel Thursday at midday, down from USD65.90 at the London equities close Wednesday. Gold was priced at USD1,790.55 an ounce, lower from USD1,792.76.
US stock market futures were pointed to a weak open, as earnings season rolls on.
The Dow Jones Industrial Average was called marginally lower, down 10.00 points, the S&P 500 down 0.1%, and the Nasdaq Composite down 0.2%.
US earnings on Thursday include American Airlines and AT&T and DJIA members Dow and Intel. The stocks were up 2.3%, up 1.4%, up 0.3% and up 0.1% in pre-market trade in New York.
American Airlines said its pretax loss narrowed to USD1.57 billion in the first quarter of 2021 from USD2.89 billion a year before, despite a more than 50% drop in revenue.
AT&T's first-quarter net income rose 63% to USD7.5 billion from USD4.6 billion a year before.
Chemical firm Dow said net sales were USD11.9 billion in the three months to the end of March, up 22% versus a year-ago, driven by local price gains across all operating segments, businesses and regions.
Intel will report after the US market close on Thursday.
Also in focus will be the latest US jobless claims figures at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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