LONDON MARKET MIDDAY: Micro Focus, AstraZeneca Help Extend FTSE Rally

LONDON (Alliance News) - The FTSE 100 was posting its fourth consecutive session of gains on Thursday at midday as an overall improvement in market mood due to hopes for US-China trade talks got an extra boost from the well-received annual results of Micro Focus and AstraZeneca.A double-digit share price decline for ConvaTec was preventing the FTSE 250 from enjoying a similarly positive session, despite gains for Indivior and Lancashire Holdings. The FTSE 100 was 21.17 points higher, or 0.3%, at 7,212.01 Thursday midday. The FTSE 250 was down 15.86 points, or 0.1%, at 18,956.76, and the AIM All-Share was up 0.2 at 912.60.The Cboe UK 100 was up 0.3% at 12,247.81, while the Cboe UK 250 was flat at 16,896.89 and the Cboe UK Small Companies unchanged at 11,243.03.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.8% and 0.4% respectively at midday."Optimism around Sino-US trade talks is continuing to provide a boost for equity markets on Thursday, with a meeting between President Xi and top US officials on Friday being closely monitored," said Oanda senior market analyst Craig Erlam."Trump's claim that negotiations are going 'very well' and reports that a 60 day extension is being considered is encouraging," Erlam continued. "This was always, realistically, the best possibly outcome of these initial talks, and I think we have to be pleased that this means two more months without new tariffs."Stocks in the US were set to benefit from Thursday's buoyant sentiment, with the Dow Jones pointed up 0.3%, the S&P 500 up 0.2% and the Nasdaq called 0.3% higher.In the US economic calendar on Thursday are US producer prices and retail sales figures, both at 1330 GMT.Released in the morning, data from the eurozone showed the bloc's economic growth slowed in 2018. In 2018, GDP grew by 1.8% in the eurozone and by 1.9% in the EU28, based on seasonally and calendar adjusted quarterly data. The annual growth rate for 2017 was 2.4% in the euro area and the same for EU28.For the fourth quarter alone, adjusted gross domestic product rose by 0.2% in both the eurozone and the EU28 from the third quarter. On an annual basis, seasonally adjusted GDP increased by 1.2% in the euro area and by 1.4% in the EU28 in the fourth quarter, slowing from 1.6% and 1.8% respectively in the third quarter.The figures came after just data from Germany showed the country narrowly managed to avoid a technical recession in 2018 as the economy stagnated.Germany's gross domestic product was unchanged from the third quarter, when the economy shrunk 0.2%. Economists were looking for a modest increase of 0.1%. On a year-on-year basis, GDP rose an unadjusted 0.9% in the fourth quarter after a 1.1% increase in the previous three months. Economists had expected 0.8% expansion.Germany's full year price-adjusted GDP growth for 2018 was revised down to 1.4% from 1.5%. Growth was the weakest since 2013, when the economy expanded 0.5%.The euro was quoted at USD1.1271 at midday, down from USD1.1288 late Wednesday.Helping drive the FTSE 100 higher on Thursday was a 14% rise for software firm Micro Focus International as it expanded its share buyback programme. The company software company also said that the most disruptive issues experienced since completion of the USD8.80 billion reverse takeover of Hewlett Packard Enterprise Software business were behind it. As a result of the acquisition, Micro Focus changed its accounting year and so reported statutory figures for the 18 months to the end of October 2018. The pro-forma results for the 12 months to October-end include the discontinued SUSE business and 12 months results for the acquired Hewlett Packard software business.For the 12 months to October, Micro Focus recorded 5.3% drop in pro-forma revenue to USD4.06 billion from USD4.29 billion in the same period a year ago. The revenue drop came in favourably compared to guidance of a 6% to 9% fall.Micro Focus said it has decided to extend its share buy-back programme by a further USD110 million. In August 2018, the company announced a USD200 million buy-back programme which was extended in November 2018 to USD400 million. Also among the gainers following a well-received set of annual results was pharmaceutical firm AstraZeneca, 5.7% higher as it guided towards earnings growth in 2019.The pharmaceutical giant's pretax profit for 2018 was USD1.99 billion, a drop of 11% from USD2.23 billion in 2017. Product sales in 2018 were USD21.05 billion, an increase of 4.5% from USD20.15 billion the year before. Consensus was for USD21.00 billion.Astra's 2019 guidance is for a high single-digit percentage increase in product sales at constant currency, following a 4% year-on-year rise in 2018.It is also guiding for core earnings per share of between USD3.50 and USD3.70 at constant currency. In 2018, core earnings per share totalled USD3.46, dropping 19% from USD4.28 in 2017.Slightly offsetting the strong share performances by Micro Focus and Astra was Coca-Cola HBC, down 4.1% as its earnings marginally undershot analyst consensus and it noted currency headwinds in the year ahead.Comparable earnings before interest and tax were EUR680.7 million, 9.6% higher on 2017, compared to consensus of EUR682.3 million. The comparable Ebit margin was 10.2%, up from 9.5% in 2017, against consensus of 10.3%. Looking forward, Coca-Cola HBC is "well-placed" to withstand expected economic slowdowns in many of its markets, but it still expects volumes to grow across all segments in 2019. Nigeria should return to volume growth, the firm added. In 2019, Coca-Coca HBC is guiding for a EUR50 million hit on Ebit from currency headwinds. RSA Insurance was down 1.5% after JPMorgan cut its rating on the insurer to Neutral from Overweight.Slumped at the bottom of the FTSE 250 was ConvaTec, down a sharp 19% as it promised "swift and strong action" on "failures in execution". The company's pretax profit was USD201.2 million for the year to December 31, rising 23% from USD164.0 million in 2017. Overall, revenue grew 4.0% to USD1.83 billion from USD1.76 billion but organic growth was only 0.2%, far below ConvaTec's forecast organic growth of 2.5% to 3.0%. "These are disappointing results, in light of our revenue and margin guidance at the beginning of 2018. With the executive committee, I have undertaken an extensive review of the business since my appointment as CEO and it is clear that swift and strong action is required," said ConvaTec Interim Chief Executive Officer Rick Anderson.Meanwhile, there were gains for Indivior, the stock up 5.5%, after posting a sharp increase in annual profit despite 2018 seeing a "series of market challenges".The pharmaceutical company's pretax profit for the year ended December 31 came in at USD278 million, twice its USD137 million profit the year before. This was a the result of a significant drop in selling, general and administrative expenses to USD494 million from USD707 million in 2017.Revenue fell to USD1.01 billion from USD1.09 billion due to a loss of market share for Suboxone Film, which averaged and exited 2018 at 53% versus an average of 59% in 2017. Revenue also was hit by an increase in government channels through Medicaid in the US.Insurer Lancashire, up 7.1%, returned to a profit in 2018, with its underwriting operations becoming profitable once again. The FTSE 250-listed insurer posted a pretax profit of USD33.6 million for 2018, compared to a loss of USD72.9 million in 2017. The company's combined ratio, a measure of underwriting profitability, was 92.2% in 2017 compared to 124.9% in 2017. A figure under 100% denotes underwriting profitability. Lancashire's gross written premiums climbed to USD638.5 million from USD591.6 million a year prior, with net premiums up to USD417.7 million from USD398.0 million. Elsewhere on the Main Market, shares in Restaurant Group fell 14% as it announced Chief Executive Officer Andy McCue will leave the company, citing "extenuating personal circumstances" for the "untimely" departure.A search for a replacement is currently underway and McCue will remain in his role until a successor is recruited. He was named CEO in August 2016.Restaurant Group owns dining brands such as Frankie & Benny's, Chiquito, Garfunkel's and only recently acquired Asian food chain Wagamama."While we don't know the full story as to why Andy McCue has resigned beyond it being for personal reasons, the news will rock the ship once more at Restaurant Group," said Russ Mould, investment director at AJ Bell."There is a risk, or an opportunity depending on how you view it, that McCue's replacement will want to tear up the recovery plan and make some more radical changes. Whoever takes the top seat will definitely need some bright ideas to get this one-time leisure sector superstar back on track," Mould added.