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(Alliance News) - London shares were more decisively in the green at midday after a slow start to Thursday's session, helped as the pound wobbled ahead of the potentially Brexit-deciding results of the first December UK general election in nearly a century.
The FTSE 100 index was 32.74 points higher, or 0.5%, at 7,248.99 Thursday. The mid-cap FTSE 250 index was 24.50 points higher, or 0.1%, at 20,671.61. The AIM All-Share index was up 0.3% at 897.84.
The Cboe UK 100 index was up 0.5% at 12,290.04. The Cboe 250 was 0.3% higher at 18,636.08, and the Cboe Small Companies down 0.2% at 11,342.49.
In mainland Europe, the CAC 40 in Paris was up 0.1% while the DAX 30 in Frankfurt was 0.2% higher in the early afternoon.
"European markets have got off to a positive start this morning taking their cues from last night's Fed meeting, however trading is fairly light ahead of this afternoon's ECB rate decision and today's UK election," said Michael Hewson at CMC Markets.
Polling booths have opened across Britain as voters head to ballot boxes, with market focus on an exit poll due at 2200 GMT to signal whether the Conservative party has managed to clinch a majority, or whether the country is in for another hung parliament.
UK Prime Minister Boris Johnson arrived at Central Methodist Hall in Westminster in the morning to cast his vote, while Labour Party leader Jeremy Corbyn was greeted by a small number of supporters as he took to the ballot box in Islington.
The third general election in less than five years has been largely dominated by the 2016 vote to leave the EU – with Labour pledging to give voters another say in a second referendum, while the Tories have vowed to take the UK out of the EU next month.
A poll by The Daily Telegraph and Savanta ComRes, published on Wednesday night, placed the Tories five points ahead of Corbyn's party – indicating the potential for a Conservative majority or a hung parliament. But a separate poll by Kantar put the Tories on 44%, Labour on 32% and the Liberal Democrats on 13%.
Voter turnout, however, could play a major role in the election outcome with rain, wind and chilly temperatures forecast for much of the country throughout Thursday.
"The base case scenario of somewhere between a 10-40 seat Conservative majority government is still odds on. The polls have tightened but bookmakers odds are still stacked heavily in favour of a Boris win," said Jasper Lawler at London Capital Group.
"If the election gives the Conservatives a working majority in parliament and assuming global sentiment holds up, we'd expect the negative FTSE-GBP relationship to break down temporarily," he added, "meaning investors simultaneously price in a better economic outcome for Britain by buying sterling while also loading up on the relative value to be found in UK listed shares."
Sterling was quoted at USD1.3161 Thursday, soft compared to USD1.3177 at the London equities close on Wednesday, having traded above the USD1.32 mark earlier in the morning.
Also in focus on Thursday is Christine Lagarde's first interest rate decision as head of the European Central Bank.
The ECB will announce its latest monetary policy decision at 1245 GMT, with a press conference to follow at 1330 GMT with Lagarde.
No change is expected in terms of interest rates, though traders will be waiting for the press conference to see if they can glean any hints on Lagarde's policy stance.
The euro was quoted at USD1.1133 Thursday ahead of the ECB, higher than USD1.1088 late Wednesday.
Elsewhere in forex, the yen was flat at midday in London. Against the yen, the dollar was quoted at JPY108.66, flat versus JPY108.68 late Wednesday.
In the US, stocks are pointed to a slightly higher open with the Dow Jones seen flat and both the S&P 500 and Nasdaq called up 0.1%.
To come in the economic calendar on Thursday are producer prices from the US at 1330 GMT.
In London, Standard Chartered was among those leading the blue-chip gainers on the sale of its stake in an Indonesian unit.
The emerging markets-focused lender was up 2.4% at midday.
Standard Chartered said it has sold off its entire 45% interest in PT Bank Permata for about USD1.3 billion in cash to Thai commercial lender Bangkok Bank Public Co. StanChart and Indonesia's PT Astra International jointly control Permata, each holding just under a 45% stake, giving them a combined holding of just over 89%.
StanChart noted the USD2.6 billion total price for Permata is 1.77 times the bank's book value as of September 30.
JD Sports Fashion rose 2.4% following a 9.5% fall on Wednesday on news of a major shareholder reducing its stake.
WPP was up 1.9% on plans for a share buyback. The advertising firm intends to buyback up to GBP300 million shares in order to reduce its share capital.
In the FTSE 250, Tullow Oil was racking up a third session of gains following a sharp fall on Monday.
On Monday the stock slumped 72% as it unveiled the suspension of its dividend, a "reset" of future production guidance, and the resignation of chief executive officer Paul McDade. However, as the stock has staged a partial rebound since then, it is only down 58% since the week began. That still means almost GBP1 billion has been wiped off the oil company's market value.
Dixons Carphone was 5.9% higher as the electricals retailer said it expects a surge in adjusted profit in its current financial year despite reporting a mixed performance in the first half.
The electrical goods and mobile phone retailer reported a pretax loss of GBP86 million for the 26 weeks to October 26, narrowed compared to the GBP440 million loss a year earlier, despite revenue slipping to GBP4.71 billion from GBP4.89 billion.
Adjusted pretax profit of GBP24 million still was sharply lower than the GBP60 million recorded a year prior. As previously guided, this is expected to be around GBP210 million for the full-year.
John Laing Group was down 11% after the infrastructure investor warned net asset value at the end of 2019 will be "marginally" below market expectations.
John Laing said it has continued to benefit from strong public private partnership project delivery in the second half but said "uncertainty remains over a number of factors", leading it to guide for NAV to fall below current market views.
These include the final level of value enhancements achieved on internal valuation and ongoing transactions and discussions continuing on "certain" PPP projects. Additionally are a decline in power price forecasts and changes in "macroeconomic and tax assumptions", as well as strength in the pound.
In commodities, gold was quoted at USD1,474.80 Thursday, firm versus USD1,471.82 at the London equities close on Wednesday. Brent was quoted at USD64.20 Thursday, higher than USD63.02 at the London equities close on Wednesday.
By Lucy Heming; lucyheming@alliancenews.com
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