(Alliance News) - Stocks in London ended in the green on Thursday, after US President Donald Trump highlighted the potential for a pre-election stimulus as US jobless claims rose ahead of forecasts.
The large cap FTSE 100 index closed up 31.78 points, or 0.5%, at 5,978.03. The FTSE 250 ended up 0.8% at 17,946.16, and the AIM All-Share closed up 0.5% at 978.19.
The Cboe UK 100 ended up 0.7% at 595.80, the Cboe UK 250 closed up 0.9% at 15,242.61, and the Cboe Small Companies ended up 0.3% at 9,502.31.
In European equities on Thursday, the CAC 40 in Paris and the DAX 30 in Frankfurt ended up 0.6% and 0.9% higher, respectively.
"Global markets are on the rise as traders acclimatised to an apparent increase in the likeliness of a fresh bout of stimulus ahead of the election," said Joshua Mahony, senior market analyst at IG.
President Trump said Thursday that he sees "really good" odds of reaching a deal with Democrats in Congress on a new round of coronavirus stimulus for the battered US economy.
"We're starting to have some very productive talks," he said, referring specifically to assistance for airlines and USD1,200 checks for workers.
"We're talking about a bigger deal than airlines," he told Fox Business News. "I think we have a really good chance of doing something."
Around the time of the closing bell in London, House Speaker Nancy Pelosi said no "standalone" relief for US airlines would pass Congress without guarantees that the White House and Republicans would back a broader Covid-19 stimulus package.
"I have been very open to having a standalone bill for the airlines, or part of a bigger bill. But there is no standalone bill without a bigger bill," the top Democrat in Washington told reporters.
Stocks in New York were in the green at the London equities close, with the Dow Jones Industrial Average and the S&P 500 index up 0.2% and 0.5%, respectively, and the Nasdaq Composite up 0.4%.
"The need for another bout of stimulus is becoming increasingly apparent, with today's rise in jobless claims the fourth such occasion in the past two months," added Mahony.
US initial jobless claims edged down last week, data from the Department of Labor showed on Thursday, though did not fall quite as much as analysts had been expecting.
Initial claims for the week to October 3 came in at 840,000, down from 849,000 the week prior. Consensus, according to FXStreet, had seen claims falling to 820,000.
Continuing claims for the week to September 26 were 11.0 million, down from 12.0 million the week prior. This was slightly better than expected, with economists having penciled in claims of 11.4 million.
The pound was quoted at USD1.2932 at the London equities close Thursday, firm compared to USD1.2919 at the close on Wednesday.
The euro stood at USD1.1753 at the European equities close Thursday, lower from USD1.1766 at the same time on Wednesday. Against the yen, the dollar was trading at JPY105.99 compared to JPY105.96 late Wednesday.
On the London Stock Exchange, Tesco closed up 1.5% after the grocer posted interim profit growth and boosted its payout by 21%.
Supermarket chain Tesco, which is headquartered in Welwyn Garden City, recorded a GBP551 million pretax profit for the 26 weeks ended August 29, up 29% from GBP428 million the year before.
Revenue increased to GBP28.72 billion from GBP28.51 billion after a particularly strong performance in its UK & Republic of Ireland region, where revenue rose 1.7% to GBP26.34 billion from GBP25.90 billion. Group sales were up 6.5% at actual exchange rates, with a 69% increase in online sales - the rate of growth hitting 90% in the second quarter.
In terms of outlook, Tesco is expecting to report a "broadly even balance to the year in terms of 1H/2H retail profitability" with retail operating profit in its current financial year to be at least the same level as financial 2020 on a continuing operations basis.
The grocer increased its interim dividend per share by 21% to 3.20p from 2.65p.
On the other side of the blue-chip index was Hargreaves Lansdown, closing down 5.0%, despite reporting higher revenue and assets in the first quarter.
Hargreaves's revenue for the three months ended September 30 was GBP143.7 million, a 12% increase from the year before. Closing assets under administration for the period came to GBP106.9 billion, 2.8% higher than the opening AuA of GBP104.0 billion, thanks to a GBP2.1 billion positive market movement plus new business.
New business in the period was GBP800 million, down from GBP1.7 billion the year before - though the year before figure was also GBP800 million excluding back book transfers.
Among the mid-caps, Unite Group closed 2.0% lower after saying that its rental income is set to decline, as expected. The company retained its earnings guidance as it entered the final stages of the 2021 academic year lettings cycle.
The student accommodation company said 88% of bed spaces across its whole portfolio have been let for the academic year ending 2021, compared for 98% the prior year. Since A-Level results in August, new lettings have partially offset the unusually high number of cancellations due to Covid-19.
However, after a recent rise in UK Covid-19 cases, completed lettings fell just short of Unite's 90% occupancy target.
The company is targeting further sales from January 2021 starts from direct let customers plus universities, where talks have already begun.
Cairn Energy closed down 1.6% after Peel Hunt cut the oil & gas exploration and development company to Add from Buy.
In the green, meanwhile, was TalkTalk, closing up 17%, amid a GBP1.1 billion takeover approach from shareholder Toscafund Asset Management.
The offer for TalkTalk's entire share capital is priced at 97p per share, has a full unlisted share alternative, and is to be made by a newly formed company. TalkTalk has 1.15 billion shares in issue, meaning the offer would be worth around GBP1.12 billion.
"The board has considered the terms of the proposal and has agreed to progress the proposal further with TAM along with taking advice from the company's advisers," said TalkTalk, adding that there can be no certainty a firm offer will be made.
Network International Holdings closed up 5.9% on Thursday, after JPMorgan upped the payments solutions provider to Overweight from Neutral.
In Friday's corporate calendar, there are trading statements from bus operator Stagecoach Group, fragrance & flavour manufacturer Treatt and asset manager Premier Miton.
Brent oil was quoted at USD42.80 a barrel at the London equities close Thursday, up from USD41.62 late Wednesday.
The Organization of the Petroleum Exporting Countries has predicted oil will continue to be the world's main energy resource despite growing demand for renewables, according to its annual market outlook.
The cartel expects oil supplies from OPEC's 13 members to grow from a third of the global energy mix in 2019 to 40% in the next 25 years, while supplies from non-OPEC countries are projected to fall.
Following this year's drop in global energy needs due to the coronavirus crisis, demand is set to grow by a quarter until 2045, according to OPEC's World Oil Outlook.
The cartel's analysts expect the global economy to double in size by then. A growing world population and expanding middle classes in developing countries would further increase the thirst for energy.
Demand for renewable energy is projected to grow faster than for any other source, at an annual rate of 6.6%.
Elsewhere in the commodity space, gold was quoted at USD1,889.10 an ounce at the London equities close Thursday, firm against USD1,887.20 at the close on Wednesday.
In the economic calendar on Friday, there is UK monthly GDP estimates at 0700 BST.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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