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LONDON (Alliance News) - UK shares opened higher Friday, helped by stabilised trading in China, with miners recovering some ground after two days of losses and supermarket Tesco the biggest gainer at the open, benefiting from an upgrade by Barclays.
The FTSE 100 index was up 0.5% at 5,986.57 points, the FTSE 250 was up 0.4% at 16,858.39, and the AIM All-Share was flat at 726.27. In Europe, the CAC 40 in Paris was down 0.1%, while the DAX 30 in Frankfurt was up 0.2%.
Tesco was the best blue-chip performer shortly after the open, up 3.5%, after Barclays upgraded the supermarket to Overweight from Equal Weight.
Broker ratings drove the movements in the blue-chip index in early trade, with outsourcer Capita up 1.7% after Nomura initiated it with a Buy recommendation and Marks & Spencer Group up 0.3% thanks to upgrades from S&P Capital IQ and Berenberg.
Intu Properties was at the bottom of the FTSE 100, down 2.1%, after Exane BNP cut the shopping centre developer and owner to Underperform from Neutral. Societe Generale also downgraded the group to Sell from Hold.
Miners were taking back some of the losses seen in the last two sessions. Glencore was up 2.3%, Rio Tinto up 1.4%, and Anglo American up 0.9%.
In the FTSE 250, Vectura Group was up 4.5% after the British-based pharmaceutical firm said it has completed a clinical trial for VR315 in the US, its generic therapy for asthma, and provided an update on one of its other developments.
VR315 is inhaled by patients using Vectura's proprietary dry powder inhaler and formulation technology, and the company said it can now confirm its partner for the VR315 and also the VR506 programmes in the US is Roxane Laboratories, a subsidiary of Boehringer Ingelheim.
In AIM, investment company Prospex Oil & Gas was up 23% after it said it agreed its first conditional acquisition since converting into an AIM investing company in April last year with a deal to buy a 49% stake in Hutton Poland.
Prospex will pay a total of GBP620,000 in cash for the 49% stake, with GBP130,000 to be paid initially and the balance to be deferred up to the end of August. Hutton has stakes in a number of exploration licences in Poland, including the Kolo licence area in the Polish Central Lowlands.
Confidence among investors was somewhat restored after China's central bank raised slightly the yuan reference rate and the country's securities regulator suspended its recently implemented circuit-breaker mechanism used to prevent further losses in its stock market.
In a statement late Thursday, the China Securities Regulatory Commission said the circuit breaker system would be halted starting Friday because it had produced "more negative impact than positive effects". The commission did not say how long the suspension would remain in place. It said it will undertake research and solicit opinions to improve the system.
The People's Bank of China raised Friday its guidance rate for the yuan for the first time in nine trading days, Reuters reported.
The PBOC set its daily midpoint rate for the yuan at 6.5636 per dollar prior to the market open, Reuters said. Under China's currency regime the yuan is allowed to deviate 2% either side of the midpoint. The rate was set at 6.5646 to the dollar on Thursday, compared to 6.5314 on Wednesday.
The Shanghai Composite ended up 2.3% on Friday, the Hang Seng index in Hong Kong closed up 0.6%, but the Japanese Nikkei 225 index finished down 0.4%.
Germany's exports and imports recovered in November from October, according to data from Destatis. Exports rose 0.4% in November from October, when it fell 1.3%. Likewise, imports grew 1.6% reversing a 3.2% drop in October. Economists had forecast exports to grow 0.5% and imports to improve 1.0%.
Another report from Destatis showed German industrial production decreased unexpectedly in November. Industrial production fell a seasonally 0.3% month-over-month in November, confounding economists' expectations for a 0.5% rise. In October, production grew 0.2%.
Still ahead in the economic calendar, UK's goods trade balance is due at 0930 GMT. In the US, nonfarm payrolls are due at 1330 GMT, and wholesale inventories are due at 1500 GMT.
By Daniel Ruiz; danielruiz@alliancenews.com
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