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(Alliance News) - Stock prices in London opened higher in London on Thursday, as optimism returned to the markets and fears of banking crisis contagion faded.
The FTSE 100 index opened up 36.08 points, 0.5%, at 7,600.35. The FTSE 250 was up 178.77 points, 1.0%, at 18,811.58, and the AIM All-Share was up 4.54 points, 0.6%, at 800.74.
The Cboe UK 100 was up 0.6% at 759.77, and the Cboe UK 250 rose 1.1% to 16,420.11. The Cboe Small Companies was marginally lower at 13,247.57.
In European equities, the CAC 40 in Paris was up 0.9%, while the DAX 40 in Frankfurt was up 1.1%.
"Another day without any unwelcome banking surprises lifted markets as investors headed back towards a risk-on approach," said interactive investor's Richard Hunter.
This was seen in New York overnight. The Dow Jones Industrial Average closed up 1.0%, the S&P 500 up 1.4%, and the tech-heavy Nasdaq Composite up 1.8%.
Chipmaker Micron Technology added 7.2% after saying that inventory issues were improving.
"The rosy outlook statement added fuel to the fire of optimists, who read the news as being indicative that the overall economy was holding up, given that the company's chips are used in a wide variety of industries," ii's Hunter said.
The dollar was slightly weaker against major currencies.
Sterling was quoted at USD1.2329 early Thursday in London, higher than USD1.2326 at the London equities close on Wednesday. The euro traded at USD1.0845, higher than USD1.0834. Against the yen, the dollar was quoted at JPY132.38, down slightly versus JPY132.51.
In early local economics news, the Confederation for British Industry said its latest growth report showed "signs of green shoots" amid projections that UK industry will return to growth in the next quarter.
However, the fresh CBI data showed that activity across the UK private sector contracted by around 4% over the three months to March. It is the eight consecutive quarter of decline but the mildest drop since July 2022.
The drop was largely driven by weakness in the service sector, amid an 11% drop in consumer services volumes, according to the survey.
In the FTSE 100, there was some early weakness in insurance stocks, with Aviva and Phoenix Group down 4.0%.
SSE rose 2.5% as it upgraded its guidance for the financial year that ends on Friday. It now expects adjusted earnings per share of over 160p, compared to previous guidance of over 150p.
"This reflects the strength and stability of SSE's balanced mix of regulated and market-facing businesses and the continued narrowing of the range of probable financial outcomes for the period," the electricity utility explained.
SSE also said it plans to delivery record investment during the year, in excess of GBP2.5 billion, as part of its 'net zero acceleration programme'.
Miners also were lifting London's large cap index, with Endeavour Mining, Anglo American and Fresnillo up 1.7%, 1.3% and 1.4%, respectively.
Brent oil was trading at USD78.23 a barrel early Thursday, slightly lower than USD78.37 late Wednesday. Gold fetched USD1,968.52 an ounce, up from USD1,967.03.
Mining stocks had a strong day in Australia as well. The S&P/ASX 200 in Sydney closed up 1.0%, with BHP adding 2.4% and Rio Tinto rising 1.8%.
Elsewhere in Asia on Thursday, investor sentiment was more mixed. The Nikkei 225 index in Tokyo closed down 0.4%. In China, the Shanghai Composite closed up 0.7%, while the Hang Seng index in Hong Kong was up 0.3%.
In the FTSE 250, it was a bad day for energy stocks.
Drax Group plunged 11%.
The Yorkshire, England-based power generator's biomass carbon-capture and storage project was rejected by the UK's Department for Energy Security & Net Zero, Bloomberg reported.
Ithaca Energy fell 2.7%
The North Sea oil and gas operator downgraded 2023 production guidance to 68,000 to 74,000 barrels of oil equivalent per day from a previous range of 72,000 to 80,000, due to lower first quarter volumes, non-operated portfolio delivery, and the hit from the UK energy profit levy on capital programmes.
This came alongside largely positive results in 2022, as annual revenue jumped to USD2.60 billion from USD1.43 billion a year before. Pretax profit multiplied to USD2.24 billion from USD763.1 million, and to USD1.03 billion after tax from USD426.0 million.
Ithaca said it achieved record production of 71,400 barrels of oil equivalent per day, which was up 26% from 2021.
It was a better day for Moonpig, which was recently booted out of the FTSE 250 to make way for Ithaca.
The online greeting cards company jumped 14%, after reporting its "largest ever week of sales" in the UK leading up to Mother's Day.
It backed revenue expectations for the year ending April 30 to be GBP320 million, and also left expectations for annual adjusted earnings before interest, tax, depreciation and amortisation unchanged. It expects revenue to grow in financial 2024, with a weighting towards the second half.
On AIM, Bowleven dropped 17%.
The Africa-focused oil and gas explorer and producer said it expects to raise additional equity capital this year to fund its operations. It warned, dependent on timings of certain transactions related to Etinde, it could use up all its existing cash resources by the end of the year without further capital.
"We remain on the verge of what we believe to be a major turning point in the business with the expected upcoming change of the Etinde operatorship once Perenco secures regulatory approval," said CEO Eli Chahin.
Still to come in Thursday's economic calendar, there is the final iteration of US gross domestic product data for the final quarter of 2022 at 1330 BST.
CMC's Michael Hewson said the market is expecting a "modest revision upwards to 2.8% [annual growth] from 2.7%, which would be a modest slowdown from the 3.2% seen in Q3".
Shortly before, there will be a flash German inflation reading for March at 1300 BST.
Inflation had remained unchanged at 8.7% in February, with the market having expected it to cool to 8.5%. Market consensus, as cited by FXStreet, is expecting a reading of 7.3% this month. On a EU harmonised basis, inflation is expected to cool to 7.5% from 9.3%.
By Elizabeth Winter, Alliance News senior markets reporter
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