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(Alliance News) - Stock prices in London opened higher on Wednesday, though trading remaining cautious following the recent turbulence in the banking sector.
The FTSE 100 index opened up 27.00 points, 0.4%, at 7,511.25. The FTSE 250 was up 54.27 points, 0.3%, at 18,450.96 and the AIM All-Share was up 1.95 points, 0.3%, at 794.40.
The Cboe UK 100 was up 0.3% at 750.77, the Cboe UK 250 was up 0.3% at 16,040.75, and the Cboe Small Companies was up 0.2% at 13,227.87.
"There still appears to be an abundance of caution when it comes to driving prices higher, in the wake of the turmoil of last week with the rise in yields also pressuring US markets, which also struggled with the Nasdaq 100 feeling the effects of firmer rates the most," said CMC Markets' Michael Hewson.
Stocks on Wall Street slid on Tuesday, with the Dow Jones Industrial Average ending down 0.1%, the S&P 500 down 0.2%, and the Nasdaq Composite down 0.5%.
In European equities on Wednesday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.5%.
German consumer sentiment "painted a mixed picture" in March, according to the latest Growth for Knowledge survey. Income expectations continued to improve, but the propensity to buy did not change much, GfK said.
GfK noted that while stable employment conditions would generally increase the propensity to buy, the indicator is being held back by the notable losses in purchasing power. "Accordingly, private consumption is unlikely to make a positive contribution to economic growth in Germany this year," GfK's Rolf Burkl predicted.
In Zurich, UBS was up 1.4%, after it enlisted the help of its former chief executive officer, following its takeover of Credit Suisse. Sergio Ermotti, currently chair at reinsurer Swiss Re, will retake the helm of the Swiss bank next month.
Ermotti was previously CEO of UBS from late 2011 to October 2020, during which time he "successfully repositioned UBS following the severe challenges arising from the global financial crisis", the bank asserted.
Incumbent UBS CEO Ralph Hamers has "agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country", UBS said.
"The new CEO will have the immediate challenges of cutting staff, reducing Credit Suisse’s investment bank, finding other synergies between the two lenders and convincing shareholders about the prospects for the arranged marriage," said interactive investor's Victoria Scholar.
Swiss Re slipped 0.4%. Credit Suisse was up 1.6%.
The dollar was stronger early Wednesday in London
The pound was quoted at USD1.2325, lower than USD1.2339 at the London equities close on Tuesday. The euro traded at USD1.0824, steady on USD1.0839. Against the yen, the dollar was quoted at JPY131.87, up versus JPY130.98.
On the London Stock Exchange, shares in clothing and homewares retailer Next lost 6.1%.
Next hailed a "good year" in 2022 despite various challenges, but expects a "difficult" year ahead.
In the financial year that ended in January, revenue rose 8.8% to GBP5.03 billion from GBP4.63 billion the year before, as total trading sales rose 8.4% to GBP5.15 billion. Total pretax profit edged up 5.7% to GBP869.3 million from GBP823.1 million.
The board proposed a final dividend of 140 pence, taking the total payout for the year to 206p. Next said it intends to maintain the 206p payout for the new financial year, based on achieving its pretax profit guidance of GBP795 million.
It reiterated guidance of total full price sales to fall by 1.5% in financial 2024 from financial 2023, with the first half performance to be weaker than the second half. "Selling price inflation is forecast to be more benign that previously thought," Next said.
"With profits set to decline, we question its prospects for longer-term growth," commented Shore Capital analysts.
"Although the company is focusing on online growth, cost management, and investing in technology and infrastructure, we are not fully confident that these initiatives will deliver growth for shareholders."
Elsewhere in the FTSE 100, broker ratings were moving some individual shares.
Tesco was up 2.0%, as Morgan Stanley raised the stock to 'overweight'. WPP added 1.8%, as it was upped to 'outperform' by Exane BNP.
Meanwhile, Smith & Nephew fell 1.2%, as Barclays cut the stock to 'hold'.
Gold was quoted at USD1,961.78 an ounce early Wednesday, edging lower from USD1,967.14 on Tuesday.
Brent oil was trading at USD79.03 a barrel, up slightly from USD78.09
"With concerns around a potential full-blown banking crisis easing off and supply disruptions in Iraq, price action has turned more positive. However brent crude is still down by 3.5% year-to-date and down 12% over a one-year period following last year’s geopolitical driven commodity surge," said ii's Scholar.
In the FTSE 250, Essentra rose 2.5%.
The components business said annual revenue in 2022 rose to GBP337.9 million from GBP301.7 million, as its pretax loss widened to GBP29.1 million from GBP7.1 million.
Essentra recommended an final ordinary dividend of 1.0p per share, bringing the total payout to 3.3p, just over half of the 6.0p paid out in 2021.
Essentra said it also will begin its GBP60 million buyback programme, to repurchase ordinary shares at 25p each. The programme returns the proceeds from its Packaging and Filters disposals, with the firm to pay out a special dividend of 29.8p.
Essentra said it outlook for 2023 remains unchanged. "Although we continue to see distributor destocking, trading in Europe continues to be robust and China's reopening will increasingly benefit our business in Asia," Essentra said. In the year to date, like-for-like orders are 8% ahead of 2022 levels.
On AIM, Versarien fell 22%.
After the sudden resignation of CEO Neill Ricketts sent its shares plunging earlier this month, the engineering materials company revealed it is likely to need further funding, and is reviewing all appropriate options.
"At this time it is not possible to be more specific on the type of funding that may be secured."
This comes despite "significant cost reductions", Versarien said, including reducing headcount and discretionary spending. The non-executive directors have waived remuneration indefinitely, with executive directors' pay also under review.
"Whilst we remain confident of the commercial benefits of our graphene technology and that it can bring significant returns to Versarien, the company continues to face a number of challenges that the board is working hard to overcome," it said.
Executive directors Chris Leigh and Steve Hodge have been leading the firm while it looks at options for recruiting a new CEO.
In Asia on Wednesday, the Nikkei 225 index closed up 1.3%. In China, the Shanghai Composite was down 0.2%, while the Hang Seng index in Hong Kong was up 1.8%. The S&P/ASX 200 in Sydney closed up 0.2%.
By Elizabeth Winter, Alliance News senior markets reporter
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