LONDON (Alliance News) - Stocks in London were slightly higher shortly after the open, with pay-television provider Sky benefiting from a broker upgrade and shares in Kingfisher rising after it said it is on track with its turnaround plan, despite reporting lower profit.
The FTSE 100 was up 0.3%, or 19.04 points, at 6,211.78.
Shares in Kingfisher were up 2.0%. The DIY retailer reported a drop in profit in its recently-ended financial year as it booked higher exceptional costs and revenue was hit by negative currency movements, but said it is on track with its turnaround plan.
The group said pretax profit in the year ended January 31 dropped to GBP512 million from GBP644 million the year before, as revenue fell to GBP10.44 billion from GBP11.0 billion.
Kingfisher said revenue was reduced by unfavourable movements in foreign exchange rates, as well as by the closure of some B&Q stores. Profit was hit by an increase in exceptional item costs from GBP35 million to GBP166 million. Kingfisher said it is on track with its five-year transformation plan, which aims to deliver a GBP500 million profit uplift by the end of the fifth year.
Sky also was leading blue-chip gainers, up 2.0% as well, after Exane BNP upgraded the broadcaster to Outperform from Neutral, while it also lifted its price target.
Gold miners Randgold Resources and Fresnillo were down 2.2% and 1.5%, respectively, among the biggest blue-chip fallers and giving back some of the gains made Tuesday on a rise in the metal's price. Randgold ended up 2.5% and Fresnillo up 1.4% on Tuesday.
The gold price rose following the news of the terrorist attacks Tuesday in Brussels, as investors were looking for a safe haven. However, the metal had given back some of those gains by the end of the session Tuesday. Gold was quoted at USD1,234.50 an ounce Wednesday after the open, much lower than the USD1,250.44 at the equities close Tuesday.
The terrorist attacks in the Belgian capital left at least 30 people dead and 230 injured on Tuesday, with the Islamic State extremist group claiming responsibility for the explosions at a subway station and Brussels' international airport.
Tesco shares were down 1.0% after US-based broker Stifel downgraded the supermarket to Sell from Hold, according to traders. Another rating cut from Stifel was sending shares in Antofagasta down 0.6%, after the broker downgraded the miner to Hold from Buy.
Direct Line Insurance Group was also on the back foot, down 1.4%, after HSBC cut its recommendation on the insurer to Reduce from Hold.
Meanwhile, new FTSE 100 constituent Paddy Power Betfair was down 2.2%. The bookie said its Chief Operating Officer Andy McCue will leave the group on April 30 in order to "pursue new opportunities". McCue was chief executive of Paddy Power from January 2015 up until its merger with Betfair in February 2016. He joined the Paddy Power business in 2006.
Fellow betting company William Hill easily topped FTSE 250 losers, down 14% and taking peer Ladbrokes with it, down 5.6%. William Hill issued a profit warning for 2016 due to a weaker-than-expected online performance in the year so far. The betting company said in the period to March 20, the online business has been hit by two main factors.
First, from a regulatory perspective, the level of active players has decreased due to an acceleration in the number of time-outs and automatic self-exclusions. If this trend persists, lower revenue will reduce online's profit by between GBP20 million and GBP25 million in 2016.
Second, gross win margins in online are 1.9 percentage points below expectations in the period, as a result of unfavourable European football results and the "worst Cheltenham results in recent history".
The FTSE 250 was up 0.3% at 16,950.51 and the AIM All-Share up 0.1% at 709.97.
DFS Furniture was down 2.8% despite saying it swung to profit in the first half of its financial year, reflecting lower one-off charges following its listing in London last year, as sales grew and DFS hiked its dividend. The sofa retailer said its pretax profit for the 26 weeks to January 30 was GBP16.2 million, compared to a GBP14.4 million loss a year earlier when the group booked costs related to its listing in London and to its international expansion.
Serco Group was down 3.0% after HSBC cut the outsourcer to Reduce from Hold.
Elsewhere, Wizz Air Holdings added 1.2%, after saying underlying net profit in its current financial year should reach the top end of its guidance following a strong performance in the year so far.
The Eastern and Central European-focused low-cost airline said underlying net profit in the year ending March 31 should be at the top end of its EUR200 million to EUR210 million guided range, after the strong performance delivered in the first nine months of the year continued into the fourth quarter.
Wizz Air said this was the result of a combination of robust ticket sales, lower fuel costs, strong load factors, and its "disciplined approach" to cost management. Wizz Air will report its full-year results on May 25.
The pound remained under pressure, also affected by the attacks in Brussels. Sterling was quoted at USD1.4174 after the open Wednesday. It stood at USD1.4208 at the close Tuesday, while it was at USD1.4396 prior to the news from Brussels.
"The assumption being taken by traders was that as far as the Brexit debate was concerned, events in Brussels yesterday could well make the arguments for staying in the EU much harder to justify by the 'remain' campaign," said CMC Markets chief market analyst Michael Hewson.
In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.7%.
In Asia, the Japanese Nikkei 225 index closed down 0.3% Wednesday, while in China the Shanghai Composite ended up 0.4%. The Hang Seng index in Hong Kong finished down 0.3%.
Wall Street ended mixed Tuesday, with the DJIA down 0.2%, the S&P 500 down 0.1% and the Nasdaq Composite up 0.3%.
There is a thin economic calendar Wednesday comprising just US new home sales data due at 1400 GMT and the Energy Information Association oil stocks at 1430 GMT. In the UK, the Bank of England's Financial Policy Committee is due to meet, with the statement from this meeting expected to be published on March 29.
By Daniel Ruiz; danielruiz@alliancenews.com
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