(Alliance News) - Stock prices in London are seen opening higher on Wednesday, with the FTSE 250 index setting a fresh record high on economic growth optimism, while investors shrugged off a pessimistic traffic outlook from Ryanair.
The IMF on Tuesday endorsed the view of a strong global economic rebound by hiking its 2021 growth forecast for the second time in three months, predicting a 6.0% expansion, from its 5.5% prior estimate.
The FTSE 100 index was up 23.03 points, or 0.4%, at 6,846.58 early Wednesday. The mid-cap FTSE 250 was up 89.83 points or 0.4%, at 22,084.31, breaching the 22,000 mark for the first time. The AIM All-Share index was down 0.1% at 1,222.76.
The Cboe UK 100 index was up 0.3% at 681.80. The Cboe 250 was up 0.4% at 19,725.30. The Cboe Small Companies was up 0.1% at 14,105.75.
In mainland Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were up 0.2% and 0.1% respectively.
"Despite the third wave in Europe, concerns over the AstraZeneca vaccine, and reported worries about an incoming slowdown in the UK's vaccination programme, yesterday's IMF growth upgrades have helped keep the markets feeling fresh," said Spreadex analyst Connor Campbell.
The trial of the Oxford University and AstraZeneca vaccine in children has been paused while regulators investigate reports of a rare form of blood clot among adults. Oxford said that no safety concerns have arisen from the trial itself, but it is waiting for more information from the Medicines & Healthcare products Regulatory Agency before giving any more vaccinations.
Regulatory bodies from the UK, Europe and the World Health Organisation are assessing data on the jab and a potential association with a rare form of blood clot. The WHO and the European Medicines Agency have confirmed they will publish findings later this week.
AstraZeneca shares were 0.8% lower in London.
In the FTSE 100, Royal Dutch Shell 'A' and 'B' shares were both up 1.2% after the oil major said earnings from its core Upstream division are expected to be positive in the first quarter, boosted by the current commodity price environment, but the Texas freeze will hit the result by as much as USD40 million.
Upstream production is expected to be between 2.40 million and 2.48 million barrels of oil equivalent per day, including 10,000 to 20,000 barrels per day lower production due to the Texas storm.
Shell had posted an adjusted loss in Upstream of USD2.85 billion for 2020 versus earnings of USD4.45 billion in 2019.
At the other end of the large-caps, Flutter Entertainment was the worst performer, down 2.7%, with the gambling firm embroiled in litigation issues with Rupert Murdoch's Fox Corp.
Fox Corp late Tuesday said it filed a lawsuit against Flutter Entertainment, the owner of US sports betting site FanDuel, over a disputed 18.6% option in FanDuel.
Fox wants to acquire an 18.6% stake in FanDuel at an USD11.2 billion valuation - the value set when Flutter acquired a 37.2% stake in FanDuel from Fastball in December.
CNBC reported late Tuesday that Flutter has argued Fox must pay fair market value to exercise the option in July. The price could be determined by a FanDuel initial public offering, which Flutter is considering.
Flutter, which merged its US operations with FanDuel in 2018, had raised its FanDuel holding to 95% in December in a USD4.18 billion deal. Flutter had enlisted Fox's to facilitate the deal, giving it the option to buy 18.6% of FanDuel in July this year.
In response, Flutter said "Fox's position that it has a right to acquire an 18.6% interest in FanDuel based on an USD11.2 billion valuation is incorrect. It would represent a windfall to Fox compared to the fair market valuation as of July 2021, to which the parties had previously agreed."
Flutter said it will not allow Fox's filing, "which is without merit, to distract from its business and will vigorously defend its position in the arbitration".
In the FTSE 250, Hilton Food Group was up 4.5% after the food packing company boosted its dividend as it reported profit growth for 2020, driven by Australia.
Revenue for the 53 weeks to January 3, 2021, came in at GBP2.77 billion, up a sharp 53% from GBP1.81 billion for the 52 weeks to December 29, 2019. Pretax profit rose by a quarter to GBP54.0 million from GBP43.2 million.
On the back of this strong performance, Hilton Food's total dividend for the year was raised to 26.0p from 21.4p.
Elsewhere, Ryanair Holdings was up 1.0%. The Irish carrier said it expects to report a pre-exceptional net loss of between EUR800 million and EUR850 million for the financial year that ended March 31, narrowed from the previously guided range of EUR850 million to EUR950 million.
Easter travel restrictions and lockdowns alongside a delayed traffic recovery into the peak summer 2021 season, due to the slow rollout in the EU of Covid-19 vaccines, means that 2022 traffic is likely to be towards the lower end of the previously guided range of 80 million to 120 million passengers, Ryanair noted.
"While it is not possible (at this time) to provide meaningful 2022 profit guidance, we do not share the recent optimism of certain analysts as we believe that the outcome for 2022 is currently close to breakeven," Ryanair said.
The company said its balance sheet remains strong, with year-end net cash of EUR3.15 billion and 84% of its owned fleet of 420 Boeing 737 jets unencumbered.
The pound was quoted at USD1.3780 early Wednesday, down from USD1.3848 at the London equities close on Tuesday.
The euro was priced at USD1.1879, up from USD1.1843. Against the yen, the dollar was trading at JPY109.75, lower from JPY109.83.
Brent oil was quoted at USD62.77 a barrel on Wednesday morning, down from USD63.42 late Tuesday in London. Gold was trading at USD1,739.10 an ounce, lower against USD1,744.00.
The Japanese Nikkei 225 index ended up 0.1%. In China, the Shanghai Composite closed down 0.2%, while the Hang Seng index in Hong Kong was down 0.8%.
The economic events calendar on Wednesday has a services PMI reading for the UK at 0930 BST. Elsewhere, minutes from the most recent US Federal Reserve meeting are released at 1900 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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