Kingfisher Share News (KGF)

LONDON (Alliance News) - London stock prices were higher Tuesday midday, as analysts say Brexit worries seem to be receding among investors, with shares in Kingfisher benefiting from the DIY retailer's positive first-quarter update.

"Polls, as we have learnt over the past few years, must always be taken with a pinch of salt, but when a staunchly Eurosceptic paper produces a poll that puts the 'Remain' camp well ahead, markets listen," said IG analyst Chris Beauchamp.

A poll by ORB for the Daily Telegraph found 55% of respondents intend to vote to keep Britain in the European Union, against 42% in favour of leaving, ahead of the EU referendum scheduled for June 23.

"Concerns over the economic impact appear to be pushing people towards the status quo, and as a result UK-focused assets are in demand once again this morning, with both sterling and the FTSE 100 enjoying a rise," noted IG's Beauchamp.

The FTSE 100 was up 0.8%, or 45.22 points, at 6,181.65. The FTSE 250 was up 0.1% at 17,047.96 and the AIM All-Share was up 0.2% at 732.39.

Kingfisher was among the best blue-chip gainers, up 2.2%, after it reported growth in first quarter sales and said it is on track in the first year of its five-year plan.

The DIY retailer said total sales in the three months to April 30 grew by 5.1% to GBP2.72 billion on the same period the year before, as sales in France rose by 9.7%, sales in the UK & Ireland were up 1.3%, and other international sales increased by 6.0%.

Severn Trent was another riser, up 2.1%. The UK water and wastewater company cut its annual dividend by 5.0% but its reported profit and earnings soared during the past financial year, as it provided guidance for the year ahead.

The dividend for the full year was reduced to 80.66 pence per share, a 5.0% cut from 84.90p the year before but in line with the company's policy. Severn Trent said the dividend for the current financial year will be 81.5p.

Imperial Brands was up 2.2%, after Barclays upgraded the tobacco company to Overweight from Equalweight.

At the other end of the blue chip index, Coca-Cola HBC was the worst blue-chip performer, down 3.7% at 1,315.00 pence, after Credit Suisse said it placed 5.4 million shares in London-listed bottler on behalf of a private equity vehicle.

The placing was initially announced on Monday by Credit Suisse, which acted as sole global coordinator and bookrunner. Following completion, the vehicle, New Argen Holdings, continues to hold 4.5 million shares in Coca-Cola HBC, representing 1.2% of its issued share capital. The place at GBP13.15 per share raised GBP71 million.

In the FTSE 250, Homeserve was the best mid-cap performer, up 5.8%. The home insurance and repairs company said it is excited about the prospects for its US business, which helped to drive the group's full-year profit higher.

Pretax profit rose to GBP82.6 million in the year ended March 31, HomeServe said in a statement, from GBP76.7 million a year earlier, as revenue increased to GBP633.2 million from GBP584.2 million. HomeServe increased its total dividend for the year to 12.7 pence from 11.5p.

Halfords Group was another gainer, up 1.9%, following the acquisition of online bikes and accessories retailers Tredz and Wheelies Direct for GBP18.4 million. Tredz specialises in the sale of premium bikes and cycling parts, accessories and clothing, while Wheelies provides bicycle replacements for insurance companies. Both companies are based in South Wales.

Shares in Micro Focus International were up 1.6%, after the software company said it finished its financial year well and expects revenue and underlying earnings to be at the top end of its expectations.

Meanwhile, AVEVA Group was the biggest decliner in the mid-cap index, down 5.8%. The engineering software company said its pretax profit fell in the financial year to the end of March due to one-off costs, while revenue also declined amid tough end-market conditions.

Card Factory was down 4.8%. The greeting cards retailer said it will inform shareholders whether it will return surplus cash to shareholders when it releases its interim results later this year, but said it has made a good start to the financial year as it reiterated its guidance.

The group said total sales in the first quarter to the end of April were 6.5% higher than the previous year, as a rise in the average spend of each customer offset a reduction in overall footfall. Although total sales are still growing, it is at a slower rate.

On the UK economic front, the UK budget deficit narrowed by less than expected in April, figures from the Office for National Statistics showed. Public sector net borrowing excluding public sector banks decreased GBP0.3 billion from last year to GBP7.2 billion in April. It was forecast to fall to GBP6.4 billion.

The pound reacted positively to the data, with sterling trading at USD1.4597 at midday in London, having stood at USD1.4478 prior to the UK data. At the London equities close on Monday, the pound stood at USD1.4475.

In Europe, the French CAC 40 stock index was up 1.3% and the German DAX 30 was down 0.9%.

The German economy expanded at the fastest pace in two years in the first quarter, according to the quarterly national accounts from Destatis. Gross domestic product climbed 0.7% sequentially, faster than the 0.3% rise seen in the fourth quarter. GDP climbed 1.3% on a yearly basis, weaker than the 2.1% expansion seen in the previous quarter.

On a calendar-adjusted basis, GDP growth improved to 1.6% year-on-year from 1.3%. The readings all confirmed the GDP growth figures released on May 13.

In Asia, the Japanese Nikkei 225 index in Tokyo ended down 0.9%, the Shanghai Composite fell 0.8%, and the Hang Seng in Hong Kong rose 0.1%.

Stocks in New York are expected to open higher, with the Dow 30, the S&P 500 and the Nasdaq 100 all called up 0.3%.

Still in the US economic calendar, the Redbook index is due at 1355 BST. New home sales data are at 1500 BST, as well as the Richmond Fed manufacturing index. The API weekly crude oil stock data are due at 2130 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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