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(Alliance News) - Stocks in London were mixed at midday in London as investors remain worried surging inflation will lead to interest rate hikes, while Oxford Nanopore shares jumped as it began life as a publicly listed company.
The FTSE 100 index was up 20.00 points, or 0.3%, at 7,128.16. The mid-cap FTSE 250 index was down 15.53 points, or 0.1%, at 23,136.47. The AIM All-Share index was down 4.34 points, or 0.4%, at 1,249.22.
The Cboe UK 100 index was up 0.1% at 707.40. The Cboe 250 was down 0.2% at 21,893.30. The Cboe Small Companies was 0.1% lower at 15,666.60.
In mainland Europe, the CAC 40 stock index in Paris was up 0.1% and the DAX 40 index in Frankfurt was down 0.3%.
New York also was pointed higher as Congress looked set to extend US government funding in a bid to avoid a shutdown.
The Dow Jones Industrial Average was called up 0.4% based on futures trading, the S&P 500 up 0.5% and the Nasdaq Composite up 0.4%.
The US Senate said it will vote on a stopgap funding bill Thursday to prevent a government shutdown with just hours to spare, as lawmakers stare down a number of deadlines with massive stakes for the economy and President Joe Biden's sweeping domestic agenda.
The coming days are expected to be the most critical yet of Biden's presidency, as he negotiates the tricky passage of two giant spending bills and a fix to lift the debt ceiling without the support of Republicans.
But the most urgent priority is funding for federal agencies, and Senate Democrats say they will pass temporary legislation early Thursday, hours before the money runs out, to keep the lights on until December 3.
The bill, which includes USD6.3 billion to help Afghan refugees and USD28.6 billion in disaster aid, is expected to have broad cross-party support and should advance from the House of Representatives to Biden's desk soon after the Senate gives its green light.
"Stock markets have slowed their ascent in early trading after a better session yesterday. Modest gains across Europe follow on from a better session in Asia, but the late rebound in the US points towards a stronger day there as the impact of Fed speakers and the debt ceiling discussion lessens slightly," said IG Group's Chris Beauchamp.
"For beleaguered sterling traders (or at least the ones who are long) there was better news in the shape of stronger GDP figures but these failed to have much impact in a market that is in the mood to buy the dollar and sell everything else," Beauchamp added.
In the FTSE 100, Diageo was the best performer up 2.0% after the distiller said it made a strong start to financial 2022, with organic net sales momentum across all regions.
The spirits and beer company said this reflected "excellent execution" as it benefited from resilience in off-trade and continued recovery in the on-trade. However, Diageo said it expects near-term volatility to remain, including the potential future waves of Covid-19.
The Guinness brewer said its North American business was performing strongly, despite some supply chain constraints, reflecting resilient consumer demand. Further, its business in Europe was recovering ahead of expectations, it added.
Pearson was up 1.6% after Keppler Cheuvreux upgraded the education publisher to Hold from Reduce.
At the other end of the large-caps, Barratt Developments and British American Tobacco were among the worst performers, down 3.6% and 2.7% respectively. The stocks went ex-dividend meaning new buyers no longer qualify for the latest payout.
On AIM, boohoo Group was down 10% after the online fashion retailer not only warned that Covid-19 is still hitting consumer demand, but it also cautioned on rising costs as inflationary pressures accelerate.
Revenue during the period rose 20% year-on-year to GBP975.9 million from GBP816.5 million. Compared to two years earlier, so before the onset of the pandemic, the fast fashion firm's revenue was up 73% from GBP564.9 million. Rising costs have hit profits, however. Pretax profit fell 64% to GBP24.6 million, from GBP68.1 million a year earlier.
Looking ahead, boohoo expects full-year sales growth of 20% to 25%, which implies second half sales growth of 20% to 30%.
However, annual adjusted earnings before interest, tax, depreciation, and amortisation margins are now expected to be 9% to 9.5%, lower than 9.5% to 10% as previously guided. This reflects ongoing investments across technology, offices and infrastructure, boohoo noted.
Further, boohoo warned elevated short-term cost pressure experienced in the first half is expected to continue in the second half alongside recent freight cost inflation in the supply chain and wage inflation within its distribution centres.
AIM-listed rival ASOS was down 4.9%.
Elsewhere, shares in life sciences business Oxford Nanopore Technologies soared in conditional dealings, following its float on the Main Market of the London Stock Exchange on Thursday.
Oxford Nanopore priced its initial public offering at 425 pence per share, giving a market capitalisation of around GBP3.4 billion.
Conditional trading began on Thursday, and the shares were up 42% from the issue price at 603.00p each at midday, growing the company's market cap to GBP4.83 billion. Unconditional dealings begin on October 5.
The Oxford University spin-out is a technology commercialisation specialist focused on DNA and RNA strand sequencing.
It was the fourth biggest IPO of the year behind Deliveroo, Petershill Partners and Dr Martens.
The float also is a win for FTSE 250-listed IP Group, a founding investor in Oxford Nanopore with a 14% stake. The London-based investor in intellectual property-based businesses made around GBP84 million from the sale of shares but retains a 10% stake in the firm, valued at GBP348.8 million based on the offer price. IP Group shares were up 3.5% the second best midcap performer.
In addition, Made Tech Group shares started trading on London's AIM market on Thursday after it had raised GBP85.4 million in its initial public offering.
The oversubscribed fundraising raised gross proceeds of GBP15.0 million for the company, and GBP70.4 million for selling shareholders.
Upon admission, Made Tech had market capitalisation of GPB180.7 million at a placing price of 122 pence per share. The stock was trading at 145p, up 19% from the IPO price.
The pound was quoted at USD1.3440 at midday, firm from USD1.3434 at the London equities close Wednesday.
The euro was priced at USD1.1572, down from USD1.1618. Against the yen, the dollar was trading at JPY112.00, up from JPY111.85.
On the economic front, the UK economy posted robust growth in the second quarter of 2021 following the easing of coronavirus restrictions, the Office for National Statistics said.
In the three months to June, UK gross domestic product grew 24% year-on-year, reversing a 6.1% annual contraction in the first quarter. The latest reading beat market consensus, cited by FXStreet, of 22% economic growth. On a quarterly basis, UK GDP expanded 5.5% in the second quarter, which was revised up from a preliminary reading of 4.8%.
Brent oil was quoted at USD78.56 a barrel Thursday at midday, down from USD79.09 a barrel late Wednesday in London. Gold stood at USD1,728.41 an ounce, slightly lower against USD1,732.75.
Thursday's economic calendar has Germany inflation at 1300 BST followed by US GDP and jobless claims at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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