(Alliance News) - The FTSE 100 lagged European peers on Tuesday as a firmer pound weighed, with the benchmark London index flat as Frankfurt's DAX 30 raced off to a fresh high.
London's large-cap index was up 0.80 of a point at 7,052.39 midday Tuesday. The more UK domestic-focused FTSE 250 index was up 23.28 points, or 0.1%, at 22,507.01. The AIM All-Share index, primarily composed of smaller companies, was up 0.2% at 1,252.41.
The Cboe UK 100 index was down 0.1% at 702.88. The Cboe 250 was up 0.1% at 20,245.09, and the Cboe Small Companies flat at 14,876.54.
In mainland Europe, the CAC 40 in Paris was up 0.1%, while the DAX 30 in Frankfurt traded 0.8% higher in a strong post-holiday showing, reaching a new record peak of 15,568.60.
"The Dax is leading the charge higher in Europe, following on from a strong close on Wall Street. A combination of M&A activity, upbeat Ifo business sentiment data, and easing US inflation fears have helped drive the German equities market to a fresh all-time high," said Sophie Griffiths, market analyst at Oanda.
At the top of the DAX was Deutsche Wohnen, surging 15%. German property companies Deutsche Wohnen and Vonovia late Monday announced they had inked an agreement to merge via a public takeover offer to all shareholders of Deutsche Wohnen.
Based on the offer, Deutsche Wohnen is valued at around EUR18 billion, reflecting a premium of around 18% on the closing price of shares in Deutsche Wohnen last Friday at EUR45.14 each. Vonovia shares closed at EUR52.10 each on Friday.
In second place in Frankfurt's blue-chip index were Delivery Hero, up 5.2%, and semiconductor firm Infineon Technologies, up 3.3%.
"Tech stocks are rallying after the Nasdaq outperformed its peers overnight. Easing inflation fears are most beneficial for high-growth tech stocks," said Oanda's Griffiths.
In New York, the tech-heavy Nasdaq Composite was set for another outperformance on Tuesday, called up 0.7%, while the Dow Jones Industrial Average was pointed to rise 0.3% and the S&P 500 by 0.4% when the bell rings. The Nasdaq index gained 1.4% on Monday.
In London, online food delivery platform Just Eat Takeaway rose 4.0% and online grocer Ocado rose 2.8%, the two amongst the top performers in the FTSE 100.
Ocado enjoyed the sharpest growth in sales among UK supermarkets in the 12-weeks to May 16, according to the latest grocery market survey by Kantar. Ocado's sales were 15% higher at GBP562 million from GBP487 million a year earlier. Ocado's UK market share climbed to 1.8% from 1.6%. However, Ocado's sales growth showed some signs of slowing. They had jumped 28% annually in the 12 weeks to April 18.
At the top of the blue-chip index Tuesday was industrial software firm Aveva, rising 4.2%. It reported a dip in annual revenue but an improved second half and expressed optimism after completing the deal to buy Osisoft.
Revenue in the financial year that ended March 31 fell 1.6% to GBP820.4 million from GBP933.8 million, while pretax profit tumbled to GBP34.2 million from GBP92.0 million. The figures include only 13 days' trading from Osisoft, the industrial data software firm which Aveva acquired on March 19 for USD5.0 billion.
When Osisoft's results are included for the entire 12 months, revenue is shown to have fallen 1.4% to GBP1.20 billion from GBP1.21 billion, while pretax profit shot up to GBP50.6 million from GBP19.0 million.
The company said trading conditions have largely normalised in its major markets, after suffering disruption at the start of the pandemic.
While Aveva, Just Eat and Ocada all gained, the overall FTSE 100 index stagnated as a stronger pound weighed.
Sterling was quoted at USD1.4177 at midday Tuesday, down from morning highs of USD1.42 but still up from USD1.4157 at the London equities close on Monday.
The euro traded at USD1.2257, firm on USD1.2222 late Monday, despite figures showing the German economy fared slightly worse than initially expected at the start of 2021. However, there was more upbeat news from a survey by the Munich-based Ifo Institute for Economic Research
Gross domestic product shrank 1.8% quarter-on-quarter in the first three months of the year. This previously had been first reported as a 1.7% contraction, and follows 0.5% growth in the fourth quarter of 2020.
Meanwhile, Ifo said Germany's business climate index improved to 99.2 points in May from 96.6 points in April. May's figure is the best score for two years, Ifo noted. The manufacturing industry climbed "slightly", while the services economy reached its best level since February of last year.
ING commented: "This morning's German GDP data is already history. The strong May reading of the Ifo index shows that optimism about a strong economic rebound is spreading."
The dollar edged up to JPY108.93 on Tuesday from JPY108.75 in London late Monday.
Gold was quoted at USD1,882.65 an ounce at midday, lower than USD1,884.66 late Monday. Brent oil was trading at USD68.22 a barrel, up from USD68.00.
Back in London, Royal Mail was the second best mid-cap performer, up 5.7%, after Peel Hunt raised the postal operator to Buy from Hold.
Greencore shares dived 17% after saying its first-half performance was hurt by lockdown measures, reducing demand for on-the-go food.
The Leinster, Ireland-based firm has seen sales recover somewhat as restrictions ease, though it noted revenue in the early weeks of the second half of its financial year were still 14% below pre-pandemic levels.
Revenue in the six months ended March 26 fell 19% year-on-year to GBP577.1 million from GBP712.7 million. Greencore swung to a pretax loss of GBP1.8 million from a GBP27.3 million profit a year earlier.
Avon Rubber fell 6.4% as it posted a first half swing to profit, unveiled plans to change its name, and said that its finance chief will step down before the end of March 2022.
In the six months ended March 31, revenue rose 41% year-on-year to USD122.0 million from USD86.5 million. Avon Rubber swung to a pretax profit of USD5.4 million from a USD1.8 million loss a year earlier.
To better reflect recent changes to its business, including the acquisition of helmet maker Team Wendy, Chief Executive Officer Paul McDonald said the company proposes changing its name to Avon Protection during the second half of the year. In addition, the company said Chief Financial Officer Nick Keveth will depart before the end of March 2022.
Amigo shares plummeted, halving in value, after the UK high court rejected the guarantor loans provider's scheme to settle compensation claims.
At the end of December, Amigo pursued a scheme of arrangement in order to attain certainty on the total liabilities from customer complaints. It believed that such a scheme would prove to be the best vehicle for addressing customer redress claims, but admitted that the plan would not allow all claims arising from unaffordable lending to be paid in full.
Some 95% of customers voted in favour of the scheme. But the UK Financial Conduct Authority decided to appear at the court to oppose the scheme, on the grounds that it is not fair in its current form.
On Tuesday, Amigo said the court has not approved the scheme despite an "overwhelmingly positive creditors' vote" and is now reviewing all options, including an appeal. Amigo has repeatedly said it would go insolvent and that claimants would get nothing if the scheme failed.
The court move raises "yet more questions over the future of the business", said AJ Bell investment director Russ Mould.
The FCA said it was "carefully considering" the court judgement and Amigo's response, adding it believes the company can propose a fairer scheme to customers.
"This is an important judgment and any firm considering a scheme of arrangement should take it into consideration," the FCA warned.
Shares in FTSE 250-listed subprime lender Provident Financial fell 5.6% in a negative read-across. It in March warned its Consumer Credit Division faces liquidation unless a scheme of arrangement can be agreed to pay off customer complaints, and in May said it was exiting the home credit business.
By Lucy Heming; lucyheming@alliancenews.com
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