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(Alliance News) - Stocks in London were in the green at midday on Monday, though easing from earlier highs, with Rolls-Royce shares leading the FTSE 100 on the back of a big contract win, while in the US Republicans dig in against President Joe Biden's multi trillion-dollar infrastructure bill.
The large-cap index was up 17.31 points, or 0.3%, at 7,068.77. The mid-cap FTSE 250 index was up 33.55 points, or 0.1%, at 23,642.37. The AIM All-Share index was up 5.00 points, or 0.4%, at 1,271.98.
The Cboe UK 100 index was up 0.2% at 702.40. The Cboe 250 was up 0.1% at 21,425.30. The Cboe Small Companies was 0.7% higher at 15,825.80.
In mainland Europe, the CAC 40 stock index in Paris was up 0.6% and the DAX 40 index in Frankfurt was up 0.8%.
US stock market futures were pointed mostly higher. The Dow Jones Industrial Average was called up 0.3% and the S&P 500 up 0.1%, but the Nasdaq Composite was called down 0.3%.
On the political front, US House Speaker Nancy Pelosi expressed confidence a massive infrastructure bill will pass this week but acknowledged it might not get a Monday vote as planned, with fellow Democrats warning critical work remains to meet the party's deadlines.
Democrats have been scrambling to hammer out a landmark plan to upgrade the nation's roads and bridges, but are also under immense pressure to finalise a USD3.5 trillion public investment package and fund the government to avert a looming shutdown - all by September 30.
The week is among the most critical of President Joe Biden's tenure, with opposition Republicans contesting his Build Back Better programme that would invest in climate change policy, lower childcare and education costs for working families and create millions of jobs.
Equipment rentals firm Ashtead Group was among the worst blue-chip performers, down 3.6%. Ashtead generates a bulk of its revenue in the US via its Sunbelt division.
IG Group's Chris Beauchamp commented: "Early gains for the FTSE 100 have been knocked back, but European markets are doing better and US futures look solid. The new week has started in a very different fashion to the last one, indices having staged an impressive recovery from last Tuesday's lows.
"China worries seem to have evaporated, or at least have dimmed in importance, and with the US once again talking about an infrastructure bill we seem to have a welcome return to some of the old themes that proved so fruitful for equity markets in the first half of the year."
In the FTSE 100, Rolls-Royce was the top gainer, up 10%, after the jet engine maker said its Rolls-Royce North America unit was selected by the US Air Force to provide the power plant for the Boeing B-52 Stratofortress. The stock was trading at its highest level in 18 months.
The agreement was signed under the Commercial Engine Replacement Program and is worth a potential USD2.6 billion.
As part of the deal, Rolls-Royce will build and test the F130 engines at its Indianapolis, Indiana, facility following the recent completion of a USD600 million investment in the manufacturing campus. The B-52 CERP win creates demand for 650 engines to be produced at the site.
Further, the Rolls-Royce F130 engine will replace the TF33-PW-103, which has powered the B-52 since the 1960s, and is projected to no longer be supportable beyond 2030. The B-52 original equipment manufacturer, Boeing, is responsible for integrating the engines onto the aircraft.
Shares in oil majors BP and Royal Dutch Shell 'A' and 'B' were up 2.8%. 3.1% and 3.3% respectively, tracking spot oil prices higher.
Brent oil was quoted at USD79.12 a barrel Monday at midday, up sharply from USD77.86 late Friday. The North Sea benchmark touched an intraday high of USD79.52 in early trade - its highest level since October 2018.
The spike in oil prices came amid a petrol crisis which has seen panic-buying in at least half of local stations in the UK.
UK Prime Minister Boris Johnson is said to be considering whether to call in soldiers to deliver fuel to petrol stations as pumps ran dry after days of panic buying.
Emergency measures were triggered on Sunday evening, with Business Secretary Kwasi Kwarteng choosing to suspend competition laws for the fuel industry to allow suppliers to target filling stations running low.
Multiple reports suggested that Johnson on Monday will mull whether to follow that by taking the drastic step of sending in the army to drive oil tankers as "frenzied buying" added to fuel supply issues caused by a lack of HGV drivers.
Prudential was up 2.3% after the insurer said it expects to raise HKD18.5 billion, about USD2.37 billion, from its Hong Kong share offering. Its Hong Kong-listed shares ended up 2.8% to HKD151.90.
The new shares will be priced at HKD143.80 each, equivalent to GBP13.52. That price was first reported by Bloomberg News on Friday last week. Earlier last week, Prudential had said the shares would be sold for a maximum of HKD172 each.
Hikma Pharmaceuticals was up 1.1% after the generic drugmaker said it has agreed to buy Carlsbad, California-based injectables supplier Custopharm for USD375 million.
Hikma said the acquisition complements its own injectable product portfolio and pipeline, adding 13 approved products and additional pipeline products. The company expects the acquisition to generate annual revenue of over USD80 million and for the acquisition to be accretive to Hikma's Injectables operating margin.
Conversely, United Utilities was down 1.2%, despite issuing an upbeat trading update. The water company said trading has been in line with expectations during its first half, with earnings set to climb despite the water company facing inflationary pressures.
In the FTSE 250, Cineworld Group was the best performer, up 12%, ahead of the release of the latest James Bond film, 'No Time To Die', from midnight on Wednesday.
The film, which is Daniel Craig's final outing as the eponymous superspy, has been postponed three times and seen strong demand in pre-booked ticket sales.
Smaller picture house Everyman Media Group was up 4.1%.
IWG was up 5.6% after Sky News reported on Sunday that Chief Executive Mark Dixon is exploring breaking up the office provider into several distinct companies.
Dixon is looking at options including a US listing for Worka, IWG's app that allows customers to book office space. The listing could be through an initial public offering or a merger with a special purpose acquisition company, Sky said, citing insiders.
Under the plans being considered, IWG's owned-property unit would be separated from its franchising business, according to the report.
The pound was quoted at USD1.3700 at midday on Monday, higher from USD1.3670 at the London equities close Friday.
The euro was priced at USD1.1705, lower from USD1.1710 in the wake of the German election results.
Four German political parties were positioning themselves to enter coalition talks on Monday, just hours after a final vote count showed a narrow victory for the centre-left Social Democrats (SPD) over the country's conservative alliance.
The SPD captured 25.7%, its best result in years, while the conservative CDU/CSU bloc of the outgoing chancellor, Angela Merkel, fell to a record low of 24.1% after her four consecutive terms in office. Both main candidates to be the next German chancellor, Olaf Scholz of the SPD and Armin Laschet of the Christian Democrats, say they want to form the next government.
Scholz has a better chance of doing so, but the German constitution does provide for the party with the second-largest vote share to head a government.
Analysts at ActivTrades said: "The euro has barely moved against the US dollar during early Monday trading. The victory of the centre left SPD in the German general election, albeit by a very narrow margin, which will require a coalition with other parties, doesn't in essence change much in terms of Germany's stance within the European context. Observers predict a protracted period of negotiations between the winning Social Democrats and their potential coalition partners, that could take weeks or perhaps even months.
"In the meantime, the current government will remain in place, but even after a new executive is formed it is very unlikely that political events in Europe's largest economy will dramatically influence the performance of the single currency, as any of the potential coalition scenarios will be benign from an EU standpoint."
Against the yen, the dollar was trading at JPY110.95 at midday, up from JPY110.73 late Friday.
Gold stood at USD1,758.12 an ounce early Monday, higher against USD1,751.33 late Friday.
A quiet economic calendar on Monday has US durable goods orders at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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