(Alliance News) - Stock prices in London opened higher on Wednesday, with a cooler reading of the US labour market on Tuesday lifting spirits, while the dollar showed some resilience despite the weaker jobs opening data.
Focus turns to Wednesday's ADP jobs report at 1315 GMT. While not the official nonfarm payrolls, it will provide an insight into the health of the US jobs market. According to FXStreet cited consensus, there are expected to be 130,000 job additions, picking up from 113,000 in October.
The FTSE 100 index opened 26.66 points higher, 0.3%, at 7,516.50. The FTSE 250 rose 107.99 points, 0.6%, at 18,595.52, and the AIM All-Share added 0.65 points, or 0.1%, at 717.33.
The Cboe UK 100 was up 0.4% at 750.60, the Cboe UK 250 traded 0.7% higher at 16,124.99, and the Cboe Small Companies shot up 1.9% at 13,693.73.
Stocks in Asia were higher. The Nikkei 225 climbed 2.0% in Tokyo, China's Shanghai Composite ended down 0.1%, while the Hang Seng in Hong Kong shot up 0.8%. The S&P/ASX 200 surged 1.7% in Sydney.
In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.2%, the S&P 500 down 0.1% and the Nasdaq Composite down 0.3%.
Sterling was quoted at USD1.2600 early Wednesday, lower than USD1.2613 at the London equities close on Tuesday. The euro traded at USD1.0779 early Wednesday, lower than USD1.0809 late Tuesday. Against the yen, the dollar was quoted at JPY147.06 down slightly from JPY147.10.
"The larger-than-expected drop in October's JOLTS job openings has offered new reasons to speculate on more rate cuts from the Federal Reserve next year, but the stronger ISM services figures in November have worked as an offsetting factor in terms of FX impact," ING analysts commented.
"Shorting the euro appears to be one of the most popular bets in FX at the moment. Comments by hawkish hardliners like Isabel Schnabel yesterday – who suggested that another hike is now off the table and essentially moved the discussion to rate cuts – have added further pressure on the euro."
Schnabel, once one of the ECB's more hawkish voices, told Reuters that the central bank can take further hikes off the table. Roughly a month ago, she said another hike may have been an option.
"When the facts change, I change my mind. What do you do, sir," Schanbel told Reuters, referencing a line from economist John Maynard Keynes.
In London, British American Tobacco was the worst FTSE 100 performer, down 7.6%.
Imperial Brands fell 1.6% in a negative read-across.
Share price falls for Diageo, Shell and BP, three index heavyweights, also kept a lid on the FTSE 100's progress early Wednesday.
Guinness maker Diageo fell 0.5% after UBS cut the stock to 'sell'. BP and Shell lost 0.2% and 0.3%, as Crude prices slipped. Brent oil was trading at USD77.30 a barrel early Wednesday, lower than USD78.49 late Tuesday.
On the up, Ocado climbed 5.0% after JPMorgan lifted it to 'neutral'.
Paragon Banking surged 11%. The lender announced a new share buyback and reported healthy annual earnings.
It reported total operating income of GBP466.0 million for the year ended September 30, up 19% from GBP393.0 million. Pretax profit declined by 52% to GBP199.9 million from GBP417.9 million. Its bottom line was hurt by GBP77.7 million worth of fair value losses, compared to GBP191.9 million worth of gains a year prior. On an underlying basis, profit surged 25% to GBP277.6 million.
"We have today announced a further GBP50.0 million share buy-back for the 2024 financial year. Reflecting the sustained performance of the group, strength of our capital ratios and liquidity level, since 2015, the group has returned over GBP948.5 million to shareholders via share buybacks and dividends," Chief Executive Nigel Terrington said.
Paragon lifted its total dividend by 31% to 37.4 pence from 28.6p.
Tour operator Tui added 8.4%. It hailed "positive booking momentum" and it announced it is mulling delisting from the London Stock Exchange.
Tui said there has been a "notable liquidity migration from UK to Germany".
"In light of the views expressed by shareholders and any further feedback from shareholders, the executive board is currently considering, if an upgrade to a Prime Standard listing in Frankfurt with MDAX inclusion and a delisting from the London Stock Exchange would be in the best interest of shareholders," Tui added.
For the financial year ended September 30, revenue improved by a quarter to EUR20.67 billion from EUR16.55 billion. It swung to a pretax profit of EUR551 million from a loss of EUR146 million.
Underlying earnings before interest and tax totalled EUR977 million, more than doubling from EUR409 million.
For the fourth-quarter alone, revenue surged 11% on-year to EUR8.48 billion and pretax profit jumped 30% to EUR1.15 billion.
Looking to financial 2024, Tui expects revenue to rise 10% year-on-year and its underlying Ebit to improve 25%.
"Our guidance for FY24 is provided within the framework of the current macroeconomic as well as geopolitical uncertainties especially in the Middle East. It is based on the current positive booking momentum across both seasons, albeit with summer at an early stage, as well as a return to a normal hedging policy," it added.
Looking further afield, it set out a medium-term target of achieving compound annual underlying Ebit growth of 7% to 10%.
Ten Entertainment shot up 31%. The ten pin bowling operator agreed to a GBP287 million takeover from a vehicle indirectly owned by investment funds advised by Trive Capital Partners.
Neon Buyer will pay 412.5 pence per Ten Entertainment share, a 33% premium to its 310p closing price on Tuesday.
Ten Entertainment said: "Notwithstanding the opportunities to accelerate this growth, the TEG directors are conscious of the need to be balanced against the uncertainties and risks that exist in the short and medium term. TEG is not immune to the highly unstable national and international political outlook together with a volatile economic backdrop, all of which have impacted UK economic conditions and UK consumer confidence as well as having led to significant inflation in certain input costs."
Gold was quoted at USD2,030.67 an ounce early Wednesday, higher than USD2,018.22 on Tuesday.
By Eric Cunha, Alliance News news editor
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