Whitbread Share News (WTB)

(Alliance News) - Equities in London were looking for a strong end to a difficult week after inflation worries rocked markets and sparked heavy selling.

The FTSE 100 index was up 38.27 points, or 0.6%, at 7,001.60 early on Friday - at this level tracking for a week-to-date loss of 1.8%.

The mid-cap FTSE 250 index was up 169.51 points, or 0.8%, at 22,238.82. The AIM All-Share index was up 0.1% at 1,226.29.

The Cboe UK 100 index was up 0.6% at 698.37. The Cboe 250 was up 0.8% at 20,001.35, and the Cboe Small Companies up 0.4% at 14,969.52.

In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.5% early Friday.

European stocks were rebounding after a shaky couple of sessions following a US inflation overshoot.

On Wednesday, data had shown the annual US consumer inflation rate surged to 4.2% in April from March's 2.6%. Markets had expected an April rate of 3.6%. This was followed up on Thursday by US producer prices gaining 6.2% on year in April, ahead of forecasts for a 5.9% rise.

However, stocks in New York were able to look through the PPI print to close higher. The Dow Jones Industrial Average ending up 1.3%, the S&P 500 up 1.2%, and Nasdaq Composite up 0.7% - after all three indices posted losses in excess of 2% on Wednesday.

"The market serenity owed in part to more soothing words from the Fed, with Governor Waller opining that despite the high CPI report '...the factors putting upward pressure on inflation are temporary, and an accommodative monetary policy continues to have an important role to play in supporting the recovery.' Earlier the Richmond Fed's Barkin stated that he didn't view persistent recurring inflation as likely," commented Daiwa Capital Markets.

Helping to lift the FTSE 100 on Friday was Sage Group, shares rising 3.2% after raising its outlook for organic recurring revenue growth.

Revenue for the half-year to March 31 fell 4% to GBP937 million. Organic total revenue, meanwhile, rose 1.4% and organic recurring revenue was up 4.4%, underpinned by software subscription revenue growth of 11%.

Following the strong performance in the half, Sage said it now expects organic recurring revenue growth for the full-year to be towards the top end of its 3% to 5% guidance range. As previously guided, the organic operating margin is expected to be up to three percentage points below the 2020 financial year, reflecting "strategic investment" in the business.

Whitbread rose 2.2% after Morgan Stanley raised the Premier Inn hotel chain operator to Overweight from Equal Weight.

At the bottom of the blue-chip index were miners, falling back as commodity prices eased off recent highs. Rio Tinto shares were down 3.0%, Antofagasta was down 3.0% and BHP down 2.0%.

Brent oil was trading at USD66.98 a barrel, down from USD67.55 late Thursday.

Shooting to the top of the FTSE 250 was Sanne Group, up 26% at 758.98 pence after rebuffing a GBP1.3 billion takeover approach.

Cinven confirmed that it proposed a possible offer of 830 pence per share for Sanne which the company rejected, following a media report.

The private equity firm said it is considering its position and there can be no certainty any offer will be made.

The statement follows a Sky News report late on Thursday saying that Cinven offered GBP1.3 billion for the FTSE 250 company, which provides fund administration services to asset managers and companies.

Cinven said it made the approach on May 4 before it was rejected on May 12. The 830p-per-share proposal was a 38% premium to Sanne's closing price on Thursday of 603.00p. Sanne shareholders would have retained the right to receive the 9.9p-per-share final dividend if the offer had gone ahead, Cinven said.

The market rebound extended to Asia overnight, with the Japanese Nikkei 225 index ending up 2.3%. In China, the Shanghai Composite ended up 1.8%, while the Hang Seng index in Hong Kong was up 1.1% in late trade. The S&P/ASX 200 in Sydney ended up 0.5%.

The better mood saw the dollar edge down.

Sterling was quoted at USD1.4064 early Friday, firm on USD1.4045 at the London equities close on Thursday, even as UK government ministers are poised to order further action in response to the spread of the coronavirus variant dominant in India as new figures show cases have more than doubled in a week.

Data from Public Health England shows a rise in cases from 520 to 1,313 this week in the UK, with the agency saying cases were "rising in the community", and it was assessing the impact and severity of the variant. One response being considered is bringing forward the date for a second dose of vaccine for eligible groups to increase protection.

UK Prime Minister Boris Johnson has not ruled out local lockdowns being necessary to contain the spread of the virus. He said the government was "anxious" about the variant and "there is a range of things we could do, we are ruling nothing out" - though said there was "nothing that dissuades me" from easing England's lockdown further on Monday.

The euro traded at USD1.2113 early Friday, rising against USD1.2071 late Thursday.

Against the yen, the dollar declined to JPY109.39 versus JPY109.60 even as Japan's government is expected to widen a virus state of emergency Friday, just 10 weeks before the Tokyo Olympics, as campaigners submitted a petition with more than 350,000 signatures urging the Games be scrapped.

Gold was quoted at USD1,832.67 an ounce early Friday, up from USD1,823.80 on Thursday.

The economic events calendar on Friday has European Central Bank meeting minutes at 1230 BST and US retail sales figures at 1330 BST, followed by industrial production at 1415 BST.

By Lucy Heming; lucyheming@alliancenews.com

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