LONDON (Alliance News) - Stock prices in London were higher midday Friday, as optimism over global trade talks and weakness in the pound sent the FTSE 100 index back above the 7,000 mark. The two-day US-China trade negotiations ended without concrete results, though US President Donald Trump said he still hopes to reach a deal by the March 1 deadline.China's delegation said the latest round of trade talks with the US ended with "important progress" on some of the thorniest issues, state media reported. The sides held "candid, specific and constructive" discussions during the two-day meeting in Washington, the Xinhua news agency said. With the deadline for closing trade negotiations a month away, Trump sat down with a high-ranking Chinese delegation at the White House on Thursday, in an attempt to advance a deal and stave off a slew of new tariffs. Trump said a final deal can only be reached when he meets with Chinese President Xi Jinping in February, though there is not yet a fixed date."The sense of some gradual, if nebulous, progress on the trade front reflected China's renewed promise to import 'substantially' more agricultural, energy, industrial products and services from the US. And President Trump announced that Treasury Secretary Steve Mnuchin and Trade Representative Robert Lighthizer would return to China for further meetings in the middle of this month. And, ahead of the week-long Lunar New Year holiday, investors seemingly judged that was sufficient for the time being," commented analysts at Daiwa Capital Markets. The FTSE 100 index was up 47.75 points, or 0.7%, at 7,016.60. The large cap index hit an intraday high of 7,022.35 in early trade, its highest level since early January. The FTSE 250 was 22.75 points higher, or 0.1%, at 18,850.72, and the AIM All-Share was up 0.7% at 917.98.The Cboe UK 100 was up 0.7% at 11,911.41, while the Cboe UK 250 was up 0.5% at 16,780.49 and the Cboe UK Small Companies down 0.1% at 11,309.93.In Paris the CAC 40 was up 0.1%, while the DAX 30 in Frankfurt was down 0.2%. On the London Stock Exchange, Paddy Power Betfair was among the best blue-chip performers, up 2.5% after the bookmaker said it acquired a controlling stake in Georgian online gaming company Adjarabet for GBP101 million in cash. Paddy Power Betfair has acquired a 51% interest in Adjarabet, and through option arrangements expects to acquire the remaining 49% three years later. The acquisition will provide Paddy Power with exposure to the Georgian market and the growing Armenian market, it said.At the other end of the list of London large caps, Fresnillo was the worst performer, down 2.9%. The gold miner was tracking spot gold prices lower.The precious metal was quoted at USD1,318.10 an ounce, down from USD1,322.57, retreating from the eight-month highs reached on Thursday as demand for safe-haven assets waned. Intertek was down 0.9% after Jefferies downgraded the product testing and certification company to Hold from Buy. In the FTSE 250, Plus500 was the best performer, up 4.0% after Peel Hunt raised the contracts-for-difference trading provider and forex broker to Add from Hold. TalkTalk Telecom was the worst mid-cap performer, down 6.8% after the home phone and broadband provider revealed that its earnings for its full financial year are set to miss analyst consensus, despite record client demand for its services in the third quarter.Looking to its financial year ending March, TalkTalk said its underlying business is on track with "significant" year-on-year headline profit growth expected, as the company benefits from lower fibre input costs and further cost reductions as it continues to simplify the business.TalkTalk is guiding for headline earnings before interest, tax, depreciation and amortisation of GBP245 million to GBP250 million, from GBP197 million a year prior. This is below the market consensus of GBP259 million however.Earnings will be hit by between GBP10 million to GBP15 million due to accounting changes, investment, and mix in the Fibre segment. The pound was down, quoted at USD1.3060 at midday compared to USD1.3137 at the London equities close Thursday, after data showed the UK manufacturing sector made a lacklustre start to 2019, slipping to its lowest level in three months, according to IHS Markit. The IHS Markit/CIPS UK Purchasing Managers' Index fell to 52.8 in January, down from the 54.2 score in December, registering its second-weakest reading since July 2016. Economists were expecting a manufacturing PMI reading of 53.5.Domestic manufacturers are bracing for supply-chain disruptions in the coming months if the UK leaves the European Union without a deal and are stockpiling goods at the fastest rate since records began."The manufacturing PMI would have been worse if it had not been for stockpiling that is currently taking place ahead of the Brexit deadline, with new export business stagnating. With stocks of inputs rising at the sharpest rate on record, this is the first clear sign that businesses are making real preparations for a no-deal Brexit," said IG market analyst Joshua Mahony.The euro was marginally higher, quoted at USD1.1465 at midday, against USD1.1450 at the European equities close Thursday. Eurozone consumer price inflation slowed for a third month in January to its lowest level in eleven months, preliminary data from Eurostat showed.The consumer price index rose 1.4% year-on-year in January after a 1.6% increase in December. The latest inflation figure was in line with economists' expectations.Core inflation, which excludes prices of energy food, alcohol and tobacco, accelerated to 1.1% in January from 1% in December. Economists had expected the rate to remain steady.The European Central Bank targets inflation "below, but close to 2%"."While the move higher in services inflation is mildly encouraging for the ECB, it remains the case that the fall in unemployment and pickup in wage growth is taking longer than expected to feed through to core CPI. Also, the impact of the decline in headline inflation on pay settlements remains to be seen. Given that the balance of risks for growth has also 'moved to the downside', policymakers have become increasingly cautious about signalling when the first interest rate rise is likely to occur," said analysts at Lloyds. The eurozone manufacturing sector moved closer to stagnation in January amid a modest gain in output and a sharp fall in new orders, survey data from IHS Markit showed.The final Eurozone manufacturing Purchasing Managers' Index dropped to 50.5, in line with the flash estimate, from 51.4 in December. A PMI reading above 50 suggests growth in the factory sector.The manufacturing PMI has now fallen for six consecutive months to reach its lowest level since November 2014, IHS Markit said."The euro's recent strength is not a function of any improvement in economic conditions in the region (in fact quite the contrary, the latest PMI reading suggest near contractionary environment amongst most member nations), rather it is simply an expression of its role as the anti-dollar," noted analysts at BK Asset Management. Stocks in New York were set to open mixed ahead of the US jobs report for January, due at 1330 GMT.The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index flat and the Nasdaq Composite down 0.4%.Economists expect US employment to rise by 165,000 jobs in January after an addition of 312,000 jobs in December. The jobless rate is expected to hold steady at 3.9%.Ahead in the US earnings calendar, oil majors Chevron and Exxon Mobil will release fourth-quarter earnings before the market open in New York.
14 Mar 2016 15:56
