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(Alliance News) - Stock prices in London were continuing to trend higher at midday on Friday with miners driving the FTSE 100, while in the US major banks received a boon from the US Federal Reserve over shareholder returns.
US President Joe Biden on Thursday promised 200 million doses of Covid-19 vaccine in his first 100 days in office, doubling his initial goal, as he said at his first news conference that he intended to seek another term in office.
The FTSE 100 index was up 45.70 points, or 0.6%, at 6,720.53, but is on track to end the week 0.8% lower.
The mid-cap FTSE 250 index was up 176.75 points, or 0.8%, at 21,454.81. The AIM All-Share index was 0.6% higher at 1,191.24.
The Cboe UK 100 index was up 0.8% at 670.25. The Cboe 250 was up 0.9% at 19,178.66, and the Cboe Small Companies up 0.4% at 13,835.44.
In mainland Europe, the CAC 40 in Paris was 0.5% higher, while the DAX 30 in Frankfurt was up 0.6%.
In the FTSE 100, Smiths Group was still the best performer at midday, up 6.5% after the engineer raised its dividend after what it called a "robust" performance in the first half and said it is making progress on the listing of its Medical division.
For the half year to January 31, revenue was down 7.3% to GBP1.15 billion from GBP1.24 billion the year before, but pretax profit jumped by 83% to GBP84 million from GBP46 million.
Smiths raised its interim dividend 6.4% to 11.7 pence from 11.0p prior. The increased payout, the company said, reflects its confidence in the medium and longer term prospects.
Smiths is currently pursuing the demerger of the Smiths Medical business to list it separately in London and said the process was on track for the end of 2021.
Miners were in the green, with Glencore, Antofagasta, Rio Tinto, Anglo American and BHP up 3.8%, 3.7%, 3.3%, 3.1% and 2.8%, respectively, amid higher oil prices.
Brent oil was quoted at USD63.02 a barrel Friday at midday, up sharply from USD61.61 at the London equities close Thursday.
"Investor interest for oil has rebounded in the last few hours, following the news the blockage of the Suez Canal may not have an early resolution," noted analysts at ActivTrades.
Oil prices were rallying on a hit to supplies caused by a giant container ship getting stuck in Egypt's Suez Canal for a fourth day, forcing companies to re-route services from the vital shipping lane past Africa.
AJ Bell's Russ Mould commented: "Miners and oil producers drove the FTSE higher despite growing concerns about parts of the world failing to get Covid under control and what that might mean for economic recovery.
"Front of mind for the market is the matter of the Suez Canal being blocked, potentially for many more days. What's important is how that might affect global trade and the fact it is already causing shipping rates to rise, which in turn could fuel inflation as extra costs are passed on to the consumer."
Next was up 1.8% after RBC Capital upgraded the clothing and homewares retailer to Outperform from Sector Perform.
At the other end of the large-caps, Burberry was continuing losses, down 1.5%. The fashion house lost a key Chinese brand ambassador and its hallmark check print was removed from Tencent's video game Honor of Kings, as it became the first luxury brand to be hit by the Chinese backlash to western accusations of abuses in Xinjiang. Chinese actress Zhou Dongyu terminated her contract with Burberry as the brand's ambassador. The stock closed down 4.6% on Thursday.
In the FTSE 250, Oxford Instruments was still the standout performer, up 15%, after the scientific and medical equipment provider said it expects annual revenue to be marginally ahead of year before.
Oxford Instruments expects annual adjusted operating profit in a range of GBP55 million to GBP57 million. It posted adjusted operating profit of GBP50.5 million in financial 2020.
The pound was quoted at USD1.3775 at midday on Friday, up from USD1.3727 at the London equities close Thursday.
On the economic front, UK retail sales rebounded on a monthly basis in February ahead of the easing of coronavirus restrictions, according to the Office for National Statistics.
On an annual basis, UK retail sales fell 3.7% in February slowing from a decline of 5.9% in January. The latest figure missed the market forecast, cited by FXStreet, for a 3.5% drop.
On a monthly basis, retail sales grew 2.1% in February, rebounding from a fall of 8.2% in January. The month-on-month print was in-line with market consensus.
In addition, the ONS said the share of shopping done online was a record high of 36% in February.
The euro was priced at USD1.1778 at midday, unchanged from late Thursday. Against the yen, the dollar was trading at JPY109.65, up from JPY109.15.
Gold was trading at USD1,724.04 an ounce, lower from USD1,732.44.
US stock market futures were pointed flat to higher after Biden doubled down on his vaccine pledge, with major banks in focus.
The Dow Jones Industrial Average was called up 0.2%, the S&P 500 was called up 0.3%, and the Nasdaq Composite was called flat.
Most American banks will be able to pay out dividends and buy back shares after June 30, the Federal Reserve said on Thursday, further relaxing restrictions implemented to safeguard the US financial system during the pandemic.
The central bank in June 2020 ordered 34 major US banks to suspend buybacks and limit dividend payments as Covid-19 caused a sharp economic downturn, then relaxed those restrictions in December, allowing limited capital distributions to an amount based on previous income.
In a statement, the Fed said banks will be able to make buybacks and dividend payments after the current round of financial resilience stress tests are over. Firms that have capital above the limits of the stress tests will have the restrictions lifted.
Goldman Sachs, JPMorgan Chase and Bank of America were up 1.5%, 1.7% and 1.8% respectively in pre-market trade in New York.
The international economic calendar has US personal income and consumption expenditure figures at 1230 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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