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LONDON (Alliance News) - UK shares opened higher Wednesday morning, with pharmaceutical stocks leading the gainers, while shares in Sage Group were sold after the company reported lower pretax profit in its last financial year.
The FTSE 100 index opened up 0.4% at 6,423.58 points, the FTSE 250 was up 0.3% at 17,559.64 and the AIM All-Share was up 0.3% at 740.30. In Europe, the CAC 40 index in Paris was up 0.1%, while the DAX 30 in Frankfurt was flat.
Sage Group was down 2.8%, making it the worst performing stock in the blue-chip index, after it said its pretax profit edged lower in its recently-ended financial year due to restructuring costs, but its organic growth hit its target and the group remains confident on its outlook.
The enterprise software provider said its pretax profit for the year to the end of September was GBP275.8 million, slightly down from the GBP278.7 million it made a year earlier, due to higher one-off selling and administrative costs related to restructuring activity to save costs. Stripping out those one-offs, pretax profit rose to GBP358.5 million from GBP340.9 million.
Sage will pay a total dividend for the year of 13.10 pence per share, up from 12.12p the year before.
Drugmaker Astrazeneca was up 1.6% after being upgraded to Overweight from Underweight by Morgan Stanley. GlaxoSmithKline was also up 1.4% at 1,371p after the broker lifted the company's price target to 1,450p from 1,350p. Meanwhile, shares in Shire were adding 2.0%.
In the FTSE 250, Pub operator Greene King was the best mid-cap stock, up 6.8%, after it said its pretax profit and revenue rose in the first half thanks to the integration of the Spirit Pub business, though like-for-like sales growth also was solid and the group hiked its interim dividend.
Green King said its pretax profit for the 24 weeks to October 18 was GBP84.9 million, up from GBP72.0 million, as revenue surged up to GBP917.7 million from GBP614.9 million, driven by the acquisition of rival Spirit Pub Co. The group will pay an interim dividend of 8.45 pence, up from 7.95p.
At the other end of the mid-cap index, price comparison site Moneysupermarket.com Group was down 6.6% after saying its founder Simon Nixon has sold a 5.8% stake in the company through a share placing, almost half of his holding, and the company said he will step down from the board at the end of the year.
Nixon placed 32.0 million shares at 305.00 pence per share, raising gross proceeds of GBP98.0 million for Nixon. Shares in Moneysupermarket closed at 328.30p on Tuesday. The plan for the placing, conducted by Credit Suisse, had been disclosed on Tuesday.
Investors are likely to focus Wednesday on eurozone inflation data, due at 1000 GMT, a day before Thursday's highly anticipated European Central Bank monetary policy meeting.
Economists expect the inflation data to show a moderate pick-up year-on-year to 0.2% from a previous reading of 0.1% in October.
Oanda analyst Craig Erlam said the data could possibly still influence how aggressively the ECB will ease its monetary policy, "with any unexpected pickup in the data supporting a less bold approach."
The analyst said the market is expecting a cut to the deposit rate of between 10 and 20 basis points and an increase of between EUR10 billion and EUR20 billion in the bond buying program.
"A move at the lower end of this scale could disappoint investors, especially given the ECB's history of over-delivering once the decision to ease has been made," the analyst notes.
Also in the economic calendar, UK Construction PMI is expected at 0930 GMT. In the US, ADP employment change data are due at 1315 GMT, while Energy Information Administration crude oil stocks are due at 1530 GMT. At 1700 GMT, Federal Reserve Chair Janet Yellen speaks before the Economic Club of Washington, while at 1900 GMT, the Fed releases its Beige Book.
By Daniel Ruiz; danielruiz@alliancenews.com
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