(Alliance News) - Stock prices in London were trading in the green on Friday midday, with the Bank of England's decision to hold fire on raising rates helping to drive up stocks and weaken the pound.
Focus now turns to a key US jobs report, expected to show the economy added 425,000 jobs in October, according to FXStreet consensus, up from an underwhelming 194,000 in September.
The large-cap FTSE 100 index was up 39.01 points, or 0.5%, at 7,318.92. The mid-cap FTSE 250 index was up 212.48 points, or 0.9%, at 23,683.59. The AIM All-Share index was up 0.2% at 1,237.81.
The Cboe UK 100 index was up 0.4% at 725.39. The Cboe 250 was up 1.0% at 21,167.81 and the Cboe Small Companies up 0.4% at 15,602.47.
The pound was quoted at USD1.3437 on Friday midday, down from USD1.3505 at the London equities close Thursday and trading around its worst levels for 2021.
"The Bank of England decision to hold off on rates continues to benefit stocks and hurt the pound," noted IG senior market analyst Joshua Mahony.
The governor of the BoE has defended his decision to keep interest rates at record lows despite inflation rising.
Speaking to BBC Radio 4's Today programme, Andrew Bailey said interest rates will rise but only when there were signs of demand and wages rising, rather than sky-high prices for global commodities such as computer chips and gas.
He also said the bank would seek more data on the end of the furlough scheme before making any decision.
On Thursday the bank surprised some by holding interest rates at 0.1% despite warning inflation could hit as high as 5%. The bank's remit is to keep inflation at between 2% and 3%.
"Markets are now pricing a first hike in February, bringing a potential three-month delay to the tightening schedule," said Mahony.
In mainland Europe, the CAC 40 stock index in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.2%.
Retail trade volumes declined in the eurozone in September, figures from Eurostat, the statistical office of the EU, showed.
In September, the seasonally adjusted volume of retail trade decreased month-on-month by 0.3% in the euro area and by 0.2% in the EU. In August, the retail trade volume was up by 1.0% in the euro area and by 0.8% in the EU when compared to July.
Among member states for which data are available, the largest monthly decreases in the total retail trade volume were registered in Germany, Finland and the Netherlands. The highest increases were observed in Estonia, Slovakia and Luxembourg.
On an annual basis, the calendar adjusted retail sales index increased by 2.5% in the euro area and by 3.2% in the EU in September.
The euro was priced at USD1.1532, soft from USD1.1547. Against the yen, the dollar was trading at JPY113.89 in London, firm from JPY113.72 on Thursday afternoon.
The dollar was trading on the front foot into Friday's all-important nonfarm payrolls figure, due at 1230 GMT.
"Traders will be keeping a close eye out for the latest jobs data today, although the FOMC decision to implement tapering does highlight the questionable impact a big or small payrolls figure would have," said IG's Mahony.
Ahead of the jobs data, the Dow Jones Industrial Average was called up 0.1%, the S&P 500 up 0.2% and Nasdaq Composite up 0.3%.
Brent oil was quoted at USD80.82 a barrel Friday midday, down from USD82.05 late Thursday. Gold stood at USD1,792.81 an ounce, slightly lower than USD1,793.00 on Thursday.
On the LSE, Standard Chartered was up 2.4% after UBS raised the bank to Buy from Neutral.
International Consolidated Airlines Group was up 1.4% after reporting a narrowed loss in the third quarter of 2021 amid improved operating conditions.
The parent company of British Airways and Aer Lingus said passenger capacity in the three months to September 30 was 43% of 2019, up from 22% in the three moths to June 30. Current passenger capacity visibility for quarter to December 31 is for around 60% of 2019 capacity.
IAG said cargo carried in the third quarter was up 37% on 2020, reaching 73% of 2019 levels, despite a reduction in cargo-only flights as passenger capacity increased, with 657 cargo-only flights operated in the quarter compared with 1,371 in the second quarter.
Reported operating loss for the third quarter totalled EUR452 million, narrowed from EUR1.92 billion a year ago. For the first nine months of 2021, the company reported an operating loss of EUR2.49 billion, narrowed from EUR5.98 billion a year ago.
"There's a significant recovery underway and our teams across the group are working hard to capture every opportunity. We continue to capitalise on surges in bookings when travel restrictions are lifted," said Chief Executive Luis Gallego.
Among the mid-caps, Morgan Advanced Materials was the second best performer, jumping 7.5% on Friday. The company posted sales for the first nine months of 2021 up 8.9% on an organic constant-currency basis, compared to the same period last year.
Looking ahead, the technical ceramics components manufacturer said it expects its full year organic constant-currency growth to be around the top end of its previous guidance range of 7% to 9%.
"The work we have done building our capabilities over the last four years has positioned us well, allowing us to deliver strong organic growth and expand our margins despite some of the supply chain challenges as the global economy recovers," said Chief Executive Pete Raby.
Beazley was up 5.9%. The London-based insurer said momentum from the first half has persisted into the second half, with rate rises and premium growth that have exceeded its expectations.
Gross premiums written in the nine months to September 30 increased by 29% to USD3.27 billion from USD2.53 billion a year earlier. Premium rates on renewal business increased by 23%.
Beazley said its initial estimate of catastrophe losses for the third quarter is USD125 million net of reinsurance. This includes an early estimate of losses in respect of Hurricane Ida in the US of USD85 million and USD40 million for the European floods.
The company also said its investments returned 0.2% in the third quarter and 1.4% in the first nine months of 2021. Returns from Beazley's fixed income investments have been low, reflecting the low and rising yield environment, although the company's inflation-linked bond exposures have made a positive contribution, it said.
Elsewhere, flavoured cordial Vimto producer Nichols jumped 11% after saying that it expects to report 2021 profit ahead of current market expectations. The company said revenue for the first nine months of 2021 was ahead of expectations, increasing by 17% year-on-year to GBP107 million.
The Vimto brand has continued to deliver a strong performance across all of its markets, Nichols highlighted.
Going forward, the company said it sees adjusted pretax profit for 2021 ahead of the current market consensus, which stands at GBP19.1 million. Nichols now anticipates that adjusted pretax profit for the year will be in the range of GBP21 million to GBP22 million. For 2020, the company posted adjusted pretax profit of GBP11.6 million.
President Energy was also up 11% in midday trade. The oil & gas company focussed on Latin America said its subsidiary Atome Energy agreed with ANDE, the national electric power company of Paraguay, for the supply of up to 250 megawatts of power for its production facility.
In addition, President Energy reported the spud of first new oil well in Puesto Guardian, Argentina. DP-2001 was spudded after having been delayed due to logistical issues on the 1,950 kilometres journey to the well site. Drilling is expected to take 30 days at a cost of USD3.5 million.
Elsewhere, President Energy said a programme of workovers of two gas wells in Rio Negro Province, Argentina, has commenced. The cost of the workovers is USD500,000 and will be completed during November.
The workover of the Triche well in US state of Louisiana also has commenced and is projected to continue for three weeks to plug back, perforate and produce from a higher section in the well. The cost of the workover to President is expected to be USD500,000.
Copyright 2021 Alliance News Limited. All Rights Reserved.
