LONDON MARKET MIDDAY: Brexit And Italy Risk Focus Shifts To Brussels

LONDON (Alliance News) - Stocks in Europe were racking up some gains on Wednesday ahead of the Thanksgiving holiday in the US, with NMC Health and Johnson Matthey vying for the top spot in the FTSE 100.The FTSE 100 was up 0.7%, or 49.74 points, at 6,997.66 by midday. The FTSE 250 was up 0.2%, or 32.73 points, at 18,399.09. The AIM All-Share was down 0.1% at 925.98.The Cboe UK 100 was up 0.7% at 11,876.00, the Cboe UK 250 down 0.1% at 16,514.56, and the Cboe UK Small Companies flat at 11,402.87.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.4% and 0.6%, respectively.On Wall Street, stocks will attempt to rebound from Tuesday's slump. The Dow Jones Industrial Average is called up 0.4% following a 2.2% slide on Tuesday, while the S&P 500 is pointed up 0.4% and the Nasdaq up 0.7%."Yesterday, major US indices extended their losses into a second-day as the relentless selling in technology and high beta names continued to wreak havoc. However, the bleeding seems to have temporarily stopped in this morning's Euro session as equities rally along with US futures, reducing some of this week's losses," said Dean Popplewell, vice president of market analysis at Oanda.In a thin economic calendar on Wednesday, official figures showed UK government borrowing hit a three-year high in October after a steep rise in spending and a slowdown in tax receipt growth. The Office for National Statistics said public sector net borrowing, excluding state-owned banks, rose by GBP1.6 billion last month to GBP8.8 billion. This was the highest October borrowing since 2015 and was far more than the GBP6.2 billion economists had expected.Despite the October surge, year-to-date borrowing was still sharply lower at GBP26.7 billion - down by GBP11.2 billion year-on-year and the lowest for 13 years.In political news, attention is on Brussels as UK Prime Minister Theresa May heads there after Prime Minister's Questions to meet European Commission President Jean-Claude Juncker for talks ahead of the special EU Brexit summit on Sunday.Meanwhile, Italy braces for a negative Commission verdict on its big spending plans, opening the door to potential punitive action and even fines.Meeting in Brussels, the Commission is expected to reconfirm a rejection of Italy's draft budget for 2019, and possibly initiate an excessive deficit procedure. The procedure sets deadlines and targets for member states in breach of eurozone fiscal rules, and foresees fines of up to 0.2% of gross domestic product for those in continued non-compliance.Italy and the Commission have been at odds since September, when Rome's populist government decided to sharply increase the deficit for 2019, in defiance of eurozone budget discipline rules.To come in the economic calendar on Wednesday is data from the US, including initial and continuing jobless claims at 1330 GMT, with durable goods orders at the same time, and existing home sales at 1500 GMT.Bank of England Governor Mark Carney will speak at The Prince's Accounting for Sustainability Summit in London at 1515 GMT. Neck-and-neck at the top of the FTSE 100 were Johnson Matthey and NMC Health, both up 8.2%.Private hospital operator NMC was gaining after JPMorgan raised its rating on the stock to Overweight from Neutral.Johnson Matthey, meanwhile, was higher after the specialty chemicals firm said it expects a full-year operating performance towards the top end of guidance.Revenue for the half-year to September 30 grew 10% to GBP7.11 billion, with pretax profit up 19% to GBP244 million. The blue-chip firm raised its interim payout by 7% to 23.25p.Following the strong interim performance, Johnson Matthey said it expects growth in its operating performance at constant rates towards the upper end of previous guidance of mid- to high-single digit growth.Sage tumbled 4.1% as the accounting software firm said it will focus on "accelerating" its transition to a software-as-a-service company in the financial year ahead, aiming to increase recurring revenue and subscriptions.For the year ended September 30, Sage's organic revenue increased 6.8% to GBP1.82 billion from GBP1.70 billion the year before, slightly behind the firm's guided target. Recurring revenue increased 6.7% to GBP1.44 billion from GBP1.35 billion, of which subscription revenue jumped 25% to GBP839 million from GBP670 million.On a statutory basis, revenue for the year came in at GBP1.85 billion, up from GBP1.72 billion the year before, and pretax profit rose to GBP398 million from GBP342 million.Looking ahead, Sage said it expects recurring revenue growth of between 8% and 9% for its recently commenced financial year, with software and software related services and processing revenue expected to be flat or decline by mid-single digits, driven by a focus on driving subscription and recurring revenue.Kingfisher sank 3.3%, as the DIY retailer acknowledged there is unlikely to be an easy fix to problems in France. For the three months to October 31, total group sales increased by a miniscule 0.2% to GBP3.05 billion, though they were up 1.4% at constant currency. On a like-for-like basis, sales fell 1.3%, led by a 7.3% decline in France at its brand Castorama.Chief Executive Officer Veronique Laury said: "Our main challenge is Castorama France, and we shared our action plan to fix it at the half year. We have accelerated our move to an everyday low price strategy and have launched a new marketing campaign to make it visible to our customers, however there is no quick fix."Nestled at the bottom of the FTSE 250 were Indivior, SSP Group and Babcock International.The worst performer for the second consecutive session, Indivior, had sunk 12% by midday to extend Tuesday's 47% plunge. Just before the market close on Tuesday, the London-listed firm said the US Court of Appeals for the Federal Circuit had vacated the preliminary injunction against Dr Reddy's. The injunction against the Indian pharmaceutical company for the sale of its generic version of Sublingual film, used for the treatment of opioid addiction, was granted in July.On Wednesday, Indivior said its guidance for net revenue of USD990 million to USD1.02 billion and net income of USD230 million to USD255 million "remains valid" unless there is certainty Dr Reddy's product enters the market in 2018. In this case, there would be a risk to the standing guidance."Should generic buprenorphine/naloxone sublingual film enter the market in 2018, the result would most likely be a rapid and material loss of market share for Suboxone (buprenorphine and naloxone) Sublingual Film," said Indivior. SSP Group was down 7.7% despite proposing a special return to shareholders and posting strong annual figures, after saying Chief Executive Kate Swann has decided to step down at the end of May.Swann will be succeeded by Simon Smith, currently chief executive officer for UK & Ireland, who will take up the role on June 1.SSP's revenue for the year to September 30 grew 7.8% to GBP2.56 billion, with like-for-like sales up 2.8%, driven by airplane passengers and "retailing initiatives". Pretax profit shot up 26% to GBP182.9 million from GBP144.8 million.The food and drinks concessions firm proposed a final dividend of 5.4p per share, bringing its full-year dividend to 10.2p, up 26% on last year. In addition, SSP plans a special dividend worth GBP150 million, "underpinning confidence in the business".Defence firm Babock was 7.1% lower after it warned on a revenue hit from the ending of its Magnox joint venture.For the six months to September, Babcock's pretax profit fell 64% to GBP65.1 million, though on an underlying basis the figure was 2.5% higher at GBP245.5 million. Revenue fell 2.7% to GBP2.25 billion, with underlying revenue slipping 2.3% to GBP2.58 billion. The Magnox contract is with the UK's Nuclear Decommissioning Authority, with Babcock cleaning up reactor sites. The ending of the contract had previously been expected to hit revenue by around GBP100 million for its next financial year, but Babcock has now guided for a GBP250 million hit.