(Alliance News) - A surging pound after the historically large victory for the UK Conservative Party in Thursday's general election put paid to the FTSE 100 index joining the rally at the open Friday.
With its array of overseas earners, London's leading stock index opened down 0.6%.
However, the domestic focused mid-cap stocks of the FTSE 250 lifted that index by 4.3% early Friday.
At the London Stock Exchange open, the pound was quoted just above USD1.34, having spiked above the USD1.35 mark following the release of exit poll results at 2200 GMT Thursday, and traded between this range throughout the early hours of the morning. The pound had been quoted at USD1.3127 at the London equities close on Thursday.
ING said it was the largest single day rally for the pound against the dollar since January 2017.
Nigel Green, chief executive and founder of deVere Group, said the pound could later move higher, to USD1.38 "or maybe even as high as USD1.40".
"Many traders were caught off guard by the size of the majority, and this may push the pound even higher than previous predictions," Green said.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.6% at 7,229.76
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Hang Seng: up 2.5% at 27,679.88
Nikkei 225: closed up 2.6% at 24,023.10
DJIA: closed up 220.75 points, 0.8%, at 28,132.05
S&P 500: closed up 0.9% at 3,168.57
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GBP: up at USD1.3425 (USD1.3127)
EUR: up at USD1.1164 (USD1.1118)
Gold: up at USD1,469.23 per ounce (USD1,466.10)
Oil (Brent): firm at USD64.64 a barrel (USD64.38)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1100 GMT Ireland gross domestic product
1100 GMT Ireland balance of payments
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Boris Johnson has hailed a political "earthquake" which saw Labour support crumble in its heartlands in the face of a Tory landslide. The UK prime minister was set to visit the Queen at Buckingham Palace on Friday with a comfortable majority after gambling on a snap election and winning big. In his victory speech after retaining his own seat, he claimed a "powerful new mandate to get Brexit done" as his party headed for its biggest Commons majority since the Thatcher era. Johnson later told jubilant aides in Conservative HQ: "We must understand now what an earthquake we have created. The way in which we have changed the political map of this country." The Tory landslide prompted Jeremy Corbyn to announce he will not lead Labour into another election after his party suffered humiliation. Lib Dem leader Jo Swinson also lost her seat to the SNP and quit as party leader. With most of the 650 seats declared, the PA news agency was predicting a Tory majority of 78. And Johnson was on course to finish with over 43% of the popular vote, the highest for a Tory leader since Margaret Thatcher's victory in 1979 and around the same as Tony Blair's in 1997.
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Donald Trump congratulated Johnson on his "great win" in the UK general election, and said the UK and US would be free to strike a "massive" new trade deal after Brexit. The US president said the agreement had the potential to be "far bigger and more lucrative" than any deal which could have been made with the EU. The prime minister's victory puts Britain firmly on course to leave the EU next month, and he will seek to strike a free trade deal by the end of 2020. Trump tweeted: "Congratulations to Boris Johnson on his great WIN! Britain and the US will now be free to strike a massive new Trade Deal after BREXIT. "This deal has the potential to be far bigger and more lucrative than any deal that could be made with the EU Celebrate Boris!"
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Democrats set a vote on impeachment charges against Trump for Friday morning US time after a frequently caustic 14-hour debate with Republicans over the US leader's alleged misconduct in seeking political support from Ukraine. In a shock late-night end to a marathon hearing of the House Judiciary Committee on Thursday, Chairman Jerry Nadler abruptly postponed a final vote on the two articles of impeachment, saying he wanted to give committee members time to "search their conscience" over the evidence presented against the US leader. Surprised Republicans bitterly accused Nadler of running a "kangaroo court," but Democrat Jamie Raskin said they did not want to be accused of taking such a momentous action against the president in the dead of night. The move came after 14 hours of argument broadcast live which served to underscore the deep political divide of the country.
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BROKER RATING CHANGES
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HSBC RAISES IAG TO 'BUY' (HOLD) - PRICE TARGET 750 (550) PENCE
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HSBC RAISES AUTO TRADER GROUP TO 'BUY' ('HOLD') - TARGET 675 PENCE
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BARCLAYS RAISES UNITED UTILITIES TO 'OVERWEIGHT' (EQUAL WEIGHT) - PRICE TARGET 960 PENCE
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COMPANIES - FTSE 100
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Royal Bank of Scotland Group is set to give back GBP40 million to customers after discovering its foreign exchange desk was skimming cash on money transfers, the Daily Telegraph reported. The newspaper said workers on RBS's foreign exchange desk manipulated the rates applied to overseas transactions between 2010 and 2014 - earning the majority state-owned lender tens of millions of pounds in extra profits. The employees responsible changed computer systems, which meant 0.06% was added to the rate applied to more than 10 million foreign exchange payments from about 730,000 customers. That put on an extra 60 pence for every GBP1,000 sent abroad via bank transfer. Debit and credit card payments were unaffected, the paper noted. According to the Telegraph, RBS discovered the problem in 2014 but is only now getting around to redressing customers due to the scale of the issue. The Telegraph also noted this is the first case of its kind and RBS has voluntarily given back the money but has alerted the UK regulators of the situation.
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COMPANIES - FTSE 250
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Gold miner Centamin has appointed Chief Financial Officer Ross Jerrard as interim chief executive, following the departure of current boss Andrew Pardey, who will remain as an advisor until October next year. The search for a permanent CEO is going well, Centamin said, with interviews now underway. Centamin also has appointed Jim Rutherford as a non-executive director & deputy non-executive chair from the start of 2020. He replaces Gordon Edward Haslam, who will step down at the 2020 annual general meeting, when Rutherford will replace him in the role of chair.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Bowling alley chain owner Hollywood Bowl reported a "strong" financial year, with the company's outlook remaining solid. Revenue in the 12 months to September rose 7.8% to GBP129.9 million, with pretax profit climbing 15% to GBP27.6 million. Like-for-like revenue growth was 5.5%, accelerating from 1.8% growth in the prior year. Hollywood Bowl is paying a final dividend of 5.16 pence per share, as well as a special dividend of 4.50p, compared to a special payout of 4.33p the year before. These, alongside the interim dividend, take the year's total to 11.93p, up 13% year-on-year. Chief Executive Stephen Burns said he was "delighted" with "another year" of strong growth, and he said the company has made a solid start to its new financial year.
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Hurricane Energy has guided for revenue of USD165 million for 2019, and total production of 3.1 million barrels of oil, equivalent to 13,300 barrels per day. It produced no revenue in 2018, as the Lancaster field only came into production during this year. Hurricane said the early production system at Lancaster is performing strongly, and the licence containing the field has also been extended for five years. Looking to 2020, Hurricane has maintained guidance for production to be around 20,000 barrels of oil per day, though this excludes planned operational downtime. The company is also lining up drilling programmes at on both Lancaster and the Greater Warwick Area. However, at Warwick, it will not be able to drill before June, and a rig will remain idle costing the firm USD10 million. Hurricane said it is looking at other options for the rig in that time.
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COMPANIES - INTERNATIONAL
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US database software firm Oracle on Thursday reported slightly lower income in second-quarter, as the company's cloud licence revenue shrank. In the three months to November 30, net income declined to USD2.31 billion from USD2.33 billion the year before. The California-based firm's total revenue in the second quarter edged slightly higher to USD9.61 billion from USD9.57 billion the year before. Cloud Services & Licence Support revenue grew 3% to USD6.81 billion but Cloud Licence & On-Premise License revenue slipped 7% to USD1.13 billion. Hardware revenue was down 2% year on year to USD871 million, with Services revenue falling slightly to USD806 million. Total operating expenses were flat at USD6.43 billion.
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Friday's Shareholder Meetings
UP Global Sourcing
Amur Minerals
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By Tom Waite; thomaslwaite@alliancenews.com
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