(Alliance News) - Stock markets in Europe were leaning green at midday on Thursday with sterling able to regain some ground in a quiet day as traders in the US take the day off for Thanksgiving.
The FTSE 100 was up 11.60 points, or 0.2%, at 7,297.92 midday Thursday.
Victoria Scholar, head of Investment at interactive investor, noted the FTSE 100 is nearing resistance at 7,300 points. A break above that would potentially pave the way for further gains, she said.
The mid-cap FTSE 250 index was up 41.98 points, or 0.2%, at 23,209.04. The AIM All-Share index was marginally higher, up 0.61 of a point at 1,201.78.
The Cboe UK 100 index was up 0.1% at 723.33. The Cboe 250 was flat at 20,663.29, and the Cboe Small Companies was down 0.4% at 15,186.84.
In mainland Europe, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.1%.
"The quiet Thanksgiving Day session in global markets has seen European indices edge slightly higher, taking their cue from a better finish to the day yesterday, especially in the US where the usual pre-holiday buying helped to lift stocks from the lows seen earlier in the session," IG's Chief Market Analyst Chris Beauchamp said.
On Wednesday, the Dow Industrials ended marginally lower, down 9.42 points. The S&P 500 ended up 0.2% and the Nasdaq Composite up 0.4%. The New York market is closed on Thursday for the Thanksgiving Day holiday and reopens for a half day on Friday.
Beauchamp continued: "With an empty calendar before us, markets will find it hard to make much headway, but at least the pound and euro might get some respite after the avalanche of selling they have suffered as everyone piles into the US dollar in expectation of a move to higher interest rates in the US."
Sterling was quoted at USD1.3326 midday Thursday, essentially unchanged from USD1.3328 at the London equities close on Wednesday. The euro traded at USD1.1221 midday Thursday, higher than USD1.1195 late Wednesday.
Against the yen, the dollar was soft at JPY115.34 versus JPY115.38 late Wednesday in London.
In London, InterContinental Hotels was up 2.9% in the FTSE 100, the best performer, after Jefferies upped the hotel operator to Buy.
Vodafone was stuck to the bottom of the blue chip-index, down 3.9%, as the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.
Among mid-caps, Vivo Energy was up 19%, the best performer, after it accepted a USD2.3 billion takeover offer from its largest shareholder, Vitol Group.
Vivo, a pan-African retailer of Shell and Engen-branded fuels and lubricants, will recommend a USD1.85 per share offer from Vitol Investment Partnership. The offer includes planned dividends.
In sterling terms, the offer is roughly a 25% premium to its closing price of 111.40 pence on Wednesday - which implies a market cap of about GBP1.4 billion. Vivo Energy shares were up 19% to 133.00p on Thursday around midday.
Geneva-based Vitol noted it has been in talks with one of Vivo's founding shareholders, Helios, over a potential deal for its 27% stake in Vivo. The bid for the entire company is intended to prevent minority shareholders from being put into an illiquid position.
Hochschild Mining jumped 15% as it "welcomed" a statement by the presidency of the Council of Ministers in Peru, which the miner believes clarified comments made late last week by the head of Cabinet.
"In particular, the company notes the government's commitment to upholding the rule of law and that its express recognition of the continued rights of mining companies to request extensions and modifications of existing permits for mining and exploration activities," Hochschild said.
"In line with the announcement, the company's operations in southern Ayacucho, Pallancata and Inmaculada will continue to operate under the existing legal framework."
The stock had plunged on Monday, more than halving at one point, after Hochschild reported the risk that the Peruvian government may close two of its three operating gold and silver mines, one of which is its largest in terms of production and has represented around three-quarters of its cashflow. However, the Peruvian government on Wednesday reaffirmed its respect for the current legal framework.
Mitchells & Butlers gained 3.9%.
The pub chain Mitchells & Butlers said its trading has been encouraging since pandemic restrictions have been lifted in the UK but noted there are still challenges with continued cost pressures.
In the 52 weeks to September 25, its pretax loss narrowed to GBP42 million from a GBP123 million loss the year before. Operating profit was up to GBP81 million from GBP8 million.
Revenue slumped 28% to GBP1.07 billion from GBP1.48 billion. Drinks like-for-like revenue in the period was down 22% versus financial 2019 but, more promisingly, Food revenue was up 2.5%. In total, like-for-like sales was down 9.6% from financial 2019.
Mitchells said that, for the eight weeks since the period-end, like-for-like sales versus a similar period in financial 2019 are up 2.7%, comprising an increase in like-for-like food sales of 9.5% and a decrease of like-for-like drink sales of 4.8%. Volumes remain in decline by between 10% and 15%.
Matt Britzman, equity analyst at Hargreaves Lansdown said: "Ultimately investors will need to remain patient. The group's agreed not to return any cash until at least January 2023, which should mean the balance sheet continues to improve even if capital expenditure rises. But there's a long road ahead, and progress needs to continue over what could be a tough winter period."
Capita gained 7.9% after Royal Bank of Canada upgraded the outsourcer to Outperform.
Gold was quoted at USD1,791.00 an ounce midday Thursday, up slightly on USD1,790.62 on Wednesday. Brent oil was trading at USD82.22 a barrel, down from USD82.73.
On the continent, ahead of minutes from the last European Central Bank meeting at 1230 GMT, data from the Federal Statistics Office of Germany showed Germany's economy expanded in the third quarter, but still remains smaller than it was before the coronavirus pandemic struck.
German gross domestic product grew 1.7% quarter-on-quarter in the three months to September 30, slightly behind FXStreet-cited forecasts of 1.8% growth. The second quarter GDP hike was upwardly revised to 2.0%.
Pantheon Macroeconomics Chief Eurozone Economist Claus Vistesen commented: "Economic activity in the euro area's largest economy was propelled by consumers' spending in the third quarter."
Annually, GDP growth in Germany was 2.5%, slowing from the second quarter's 10% hike.
Compared with the fourth quarter of 2019, the quarter before the coronavirus crisis began, GDP was 1.1% lower.
Vistesen continued: "Looking ahead, we are worried for the fourth quarter number. Growth in consumers' spending is now easing as the reopening bump fades, and the spectre of new virus restrictions indicate that a sharp slowdown lies ahead. In addition, the surveys have softened significantly, pointing to weakening momentum at the start of the fourth quarter, even before the potential hit from new restrictions."
The advance GfK consumer sentiment index for Germany fell to minus 1.6 for December, from a revised positive 1.0 for November, below the consensus of minus 0.5.
By Paul McGowan; paulmcgowan@alliancenews.com
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