LONDON (Alliance News) - London stocks were attempting to end a dire week on a brighter note, the FTSE 100 rising amid optimism the latest round of trade talks between the US and China on Friday will bear fruit. British Airways-owner International Consolidated Airlines was supporting London's blue-chip index on Friday, offsetting a drag from Auto Trader, British Land and AstraZeneca. The FTSE 100 was up 39.16 points, or 0.5%, at 7,246.57 early Friday. Despite Friday's rise, the index of large-caps is on course to shed 1.9% this week.The FTSE 250 index was up 105.74 points, or 0.5%, at 19,391.32, while the AIM All-Share was up 0.4% at 958.18.The Cboe UK 100 index was up 0.8% at 12,292.48. The Cboe UK 250 was up 0.5% at 17,408.86. The Cboe UK Small Companies was up 0.1% at 11,718.60.In mainland Europe, the CAC 40 in Paris was up 0.8% while the DAX 30 in Frankfurt was 1.1% higher.In Asia on Friday, the Japanese Nikkei 225 index ended down 0.3%. However in China, the Shanghai Composite closed up 3.1% while the Hang Seng index in Hong Kong is up 0.9%.The performance of equities in Asia overnight suggests there remains "some optimism" a trade deal will be reached, said Lloyds Banking. "The spotlight therefore shifts to today's second day of official trade talks between both sides' representatives," said Lloyds. "While signs of progress would support a further recovery in market risk sentiment, the prospect of a complete breakdown in the negotiations may drive a stronger risk-off reaction in financial markets."In a statement late Thursday, the White House said trade talks that began in the US capital at 5pm local time had ended for the day and would resume on Friday.The resumption of talks comes after an increase in tariffs on billions of dollars worth of Chinese goods took effect Friday.Existing tariffs on USD200 billion worth of imports, from consumer goods such as suitcases and furniture along with certain food items, increased from 10% to 25% at the stroke of midnight in Washington.Trump announced the duty increase on Sunday, saying the move was necessary because trade negotiations are moving too slowly. On Wednesday he also accused Beijing of breaking provisions of the deal negotiated thus far in several rounds of talks.In London, IAG was the best performer in the FTSE 100 in early trade, up 4.2% despite posting a sharp drop in quarterly profit. On a statutory basis, operating profit before exceptional items tumbled to EUR135 million from EUR280 million a year ago. Including exceptional items, profit fell even more sharply to EUR135 million from EUR919 million.This was despite revenue rising 5.2% to EUR4.65 billion from EUR4.42 billion. Fuel unit costs for the quarter were up 16%, while passenger unit revenue was down 0.8%."In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable and are reporting an operating profit of EUR135 million," said Chief Executive Willie Walsh.Looking ahead, IAG expects its 2019 operating profit before exceptional items to be in line with 2018 on a proforma basis, while passenger unit revenue at constant currency is expected to improve over the remainder of the year.Separately, IAG said revenue passenger kilometres were up 7.7% in April year-on-year, while load factor improved to 83.4% from 81.9%. Auto Trader was at the bottom of the blue-chips, down 1.7% after Citigroup cut the car seller to Neutral from Buy. British Land was also dented by a rating downgrade, slipping 1.6% after Barclays cut the property investor to Underweight from Equal Weight. AstraZeneca slid 1.3% after pooled analyses of phase three trials of roxadustat showed the anaemia drug only outperformed in patients who were new to dialysis in terms of cardiovascular safety.The analyses looked at major adverse cardiovascular events, or MACE, which evaluates all-cause mortality, stroke, and myocardial infarction. The analyses also looked at MACE in addition to heart failure requiring hospitalisation and unstable angina requiring hospitalisation, known as MACE plus.The MACE and MACE plus outcomes in non dialysis-dependent patients showed no clinically-meaningful difference compared to placebo, which was also true in dialysis-dependent patients.However, MACE and MACE plus outcomes were better when compared to the drug epoetin alfa in patients who were new to dialysis.In the FTSE 250, wealth manager Brewin Dolphin fell 3.1% to 311.18 pence on news of a discounted share placing. Brewinis to carry out a fundraising following a series of acquisitions, it said, including a new one in Ireland.Brewin has bought the Irish wealth management unit of Investec for around EUR44 million. The firm, which confirmed mid-April it was in talks with Investec, said this builds on its plan to expand Irish operations, creating a "top three" wealth management business in the republic.Following the Investec deal and a number of others, Brewin plans raise approximately GBP60 million at a price of 305 pence a share. Liberum Capital and RBC Europe are acting as joint bookrunners for the placing.The 305p placing price is a 5.0% discount to Brewin's closing price of 321p on Thursday in London. Investec shares were up 1.9% early Friday.Millennium & Copthorne Hotels dipped 2.3% as it reported a halving in first-quarter profit. Total revenue for the first three months of the year amounted to GBP215 million, down 0.9% on a year ago. On a like-for-like basis, revenue per available room dipped 0.8%.Meanwhile, pretax profit slumped 58% to GBP11 million.Profit was hurt by refurbishments in London and Singapore and, in addition, net finance costs were GBP5 million higher. The hotel operator added that it is in the final stages of talks with Hilton regarding its operation of the Millennium Times Square New York as an affiliate of Hilton.Post the period end, for the first 21 days of April, like-for-like revenue per available room increased by 2.2%.The economic events calendar on Friday has UK industrial production and the first-quarter GDP reading at 0930 BST and US inflation data at 1330 BST. If first-quarter UK GDP grows 1.8% year-on-year, "it'll be another data point supporting the idea that the economy is trundling along regardless of political chaos", said Kit Juckes at Societe Generale.
19 Feb 2016 08:21
