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(Alliance News) - Stocks in London continued on their bumpy journey on Friday, recouping by midday the steep losses suffered on Thursday, as investors got back into a buying mood.
"After the recession rout there was a calmer feel to market proceedings on Friday," AJ Bell investment director Russ Mould said. "A late recovery on Wall Street on Thursday may have helped investors' mood but the up and down nature of trading is a reminder of just how febrile things are right now."
The FTSE 100 index was up 118.60 points, or 1.6%, at 7,351.94 midday Friday. The mid-cap FTSE 250 index was up 249.60 points, or 1.3%, at 19,730.48. The AIM All-Share index was up 11.43 points, or 1.2%, at 950.50.
The Cboe UK 100 index was up 1.6% at 733.02. The Cboe 250 was up 1.4% at 17,462.20 and the Cboe Small Companies up 0.5% at 14,527.82.
In Paris, the CAC 40 stock index was up 1.5%, and the DAX 40 in Frankfurt was 1.3% higher.
AJ Bell's Mould continued: "Fed Chair Jerome Powell did his best to douse some of the burning panic which had set in over the latest US inflation number and what it might mean for interest rates by suggesting talk of 0.75 percentage point rate hikes was off the mark."
Powell - confirmed Thursday by the US Senate for a second term - also expressed confidence that the US economy is strong enough to withstand tighter monetary policies.
According to Bloomberg, Powell reaffirmed that the Fed was likely to raise rates by a half point but isn't "actively considering" a 75-basis point move.
The pound was quoted at USD1.2187 midday Friday, sliding from USD1.2229 at the London equities close on Thursday. The euro was priced at USD1.0380, soft against USD1.0417.
Against the yen, the dollar was trading at JPY128.93, up from JPY128.25.
Ricardo Evangelista, senior analyst at ActivTrades, said: "The US dollar lost some ground to other major currencies during early Friday trading, but remains close to the almost 20-year high reached during the previous session.
"This dollar strength is explained by the markets pricing in the Federal Reserve's resolve to control inflation through tighter monetary policy measures, including higher interest rates, which contrasts with a more dovish stance from other major central banks, in a dynamic that naturally supports the dollar. At the same time, tighter monetary policies mean less stimulus, increasing the likelihood of a slowdown in economic growth, a scenario that also supports the greenback, due to its haven appeal during times of greater uncertainty."
In London, Scottish Mortgage Investment Trust, which invests heavily in US tech stocks, was up 2.9%, aided by the reversal of fortunes by the Nasdaq Composite in New York on Thursday.
On Friday, it is set to open 1.6% higher, while the Dow Jones Industrial Average was seen up 0.7% and the S&P 500 up 1.0%.
Fawad Razaqzada, market analyst at City Index and Forex.com, said: "There was a sense of calm in the markets, but again without any fundamental news to suggest this is perhaps the bottom. Global equity indices and US futures continued their recovery after the comeback on Wall Street the day before. But as we have seen time and time again, stocks have struggled to sustain any recovery attempts, as traders have been quick to take profit on rebounds amid a bearish macro back drop – rising interest rates, low growth and high inflation."
Back in London, Sage was up 1.2%.
The accounting software firm left its full-year outlook unchanged, after what it called a strong first-half performance, with its Business Cloud offering leading a rise in recurring revenue.
In the six months to March 31, Sage recorded pretax profit of GBP189 million, down slightly from GBP190 million in the same period a year prior.
Revenue also was broadly flat, slipping to GBP934 million from GBP937 million. Sage noted, however, that organic revenue was up 5%, driven by Sage Business Cloud growth of 21%.
Meanwhile, annualised recurring revenue rose by 10% to GBP1.78 billion from GBP1.63 billion a year before. "Cloud native" ARR growth was 43%, Sage said.
Sage upped its interim dividend by 5.0% to 6.30 pence from 6.05p.
For financial 2022, Sage continues to expect organic recurring revenue growth in the region of 8% to 9%.
AJ Bell's Mould said: "Fitting the rather soporific mood of markets were results from accounting software firm Sage. The company may be about as exciting as John Major reading the dictionary, but the shares performed well off the back of strong first-half results.
"In uncertain times a mundane marvel like Sage is likely to get a warm reception from the market and a sizeable increase in recurring revenue and just being on track to hit expectations was enough to see it receive a gold star from investors."
In New York, Twitter was down 16% to USD37.99 in pre-market trading after Elon Musk said his deal to buy the social media platform has been paused, as he awaits details related to the number of spam and fake accounts on the microblogging site.
Musk, who in April agreed to buy the company for slightly more than USD54 a share, took to Twitter on Friday to announce: "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users."
In a regulatory filing from earlier in May, Twitter said that fake or spam accounts made up "fewer than 5% of our monetizable daily active users" during the first quarter of 2022.
Twitter shares have yet to close at Musk's USD54.20 offer price since the deal was announced, suggesting the market already was sceptical about whether it would ahead.
Brent oil was quoted at USD109.38 a barrel on Friday at midday, higher from USD108.55 late Thursday.
Gold stood at USD1,816.80 an ounce, sharply lower against USD1,838.71.
Still to come on Friday, a US import & export prices report is due at 1330 BST.
By Paul McGowan; paulmcgowan@alliancenews.com
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