LONDON MARKET MIDDAY: Mondi Stands Out As FTSE 100 Rises

LONDON (Alliance News) - Shares in London were higher by midday Thursday, even with ex-dividend stocks dragging on the FTSE 100, as firm crude prices supported oil stocks and paper and packaging stock Mondi rose after a well-received trading update.

The Bank of England's Monetary Policy Committee voted unanimously to leave UK interest rates unchanged at 0.5% and the stock of purchased assets at GBP375 billion. The central bank said UK economic growth is likely to be 0.3% in the second quarter.

Following the BoE rate decision, together with the release of the MPC meeting minutes and the Quarterly Inflation Report, Governor Mark Carney will answer questions at a press conference starting at 1230 BST.

The FTSE 100 index was up 0.4%, or 24.38 points, at 6,186.87. The FTSE 250 was up 0.3% at 16,773.03 and the AIM All-Share flat at 726.70.

Shares in Mondi were up 1.7%. The Anglo-South African company said underlying operating profit grew in the first quarter as strong contributions from some divisions offset lower selling prices in others. Mondi said underlying operating profit for the quarter to the end of March was EUR269.0 million, 14% higher than the EUR236.0 million it made a year earlier.

Consumer Packaging, Uncoated Fine Paper and the group's South African arm all made strong contributions in the quarter, Mondi said, offsetting lower selling prices in some Packaging Paper segments and margin pressures on its Fibre Packaging business.

Gold miners Randgold Resources and Fresnillo, up 0.9% and 0.2%, respectively, were benefiting from price target increases by Goldman Sachs, while the broker kept a Neutral stance on Randgold and a Sell recommendation on Fresnillo.

Shares in oil majors were benefiting from higher crude prices, with Royal Dutch Shell 'A' shares up 1.0% and BP up 1.3%.

The price of Brent oil had surged Wednesday after an unexpected decline in US crude oil inventories. The US Energy Information Administration reported a 3.4 million barrel fall in crude oil supplies for the week ended May 6. Expectations were for a 714,000 barrels increase, whilst a week ago US crude production rose by 2.7 million barrels.

Brent was quoted at USD47.85 a barrel at midday Thursday, having hit a high earlier in the day of USD48.03 a barrel, close to its 2016 high of USD48.25 reached in late April. Brent stood at USD47.06 a barrel at the London equities close on Wednesday.

British Gas owner Centrica, down 3.2%, and motor insurer Admiral Group, down 1.8%, were among the worst performers in the FTSE 100, after going ex-dividend, meaning new buyers no longer qualify for the latest dividend payment. Other big ex-dividend stocks in the red were J Sainsbury, Wm Morrison Supermarkets, Inmarsat and GlaxoSmithKline.

ITV was trading down 1.3%. The broadcaster said it has made a good start to 2016, with revenue up 14% in its first quarter, but struck a more cautious tone in its guidance for advertising revenues for its first half against what it called a "backdrop of uncertainty".

In a statement ahead of its annual general meeting, ITV said total revenue rose 14% to GBP755 million in the three months to the end of March from GBP665 million a year before. This included flat net advertising revenue, 44% growth in the ITV Studios segment, and 17% growth in its online, pay and interactive segment.

ITV's share of viewing was up 3%, including a 1% rise in share of viewing for its core family of channels. ITV cited a "robust" traditional UK television market, and also saw a strong performance online, where viewing consumption grew 22%. The company said it expects to deliver "good group profit growth" in the first half, against a backdrop of uncertainty in the UK advertising market which it has experienced "since the debate over Brexit began", it said.

In the FTSE 250, SuperGroup was the biggest mid-cap gainer, up 13%. The fashion retailer owner the Superdry brand posted growth in total and like-for-like revenue for the financial year to April 23, with a particularly strong performance in the fourth quarter, as one of its founders stepped down to lead a design consultancy.

Shares in property investor CLS Holdings were up 6.4% at 1,675.00 pence after it launched a buyback programme for up to 10% of its shares, with a view to boosting its net asset value per share. It believes its current share price, at a significant discount to its last reported net asset value per share, "does not adequately reflect the value of its property portfolio and development pipeline."

Meanwhile, miner Polymetal was up 8.0%, benefiting from an upgrade to Buy from Neutral by Goldman Sachs.

Shares in 3i Infrastructure were down 4.8% at 170.398p, among the biggest fallers in the FTSE 250. The infrastructure investment company launched a capital raising in order to fund new investments and committed to a progressive dividend policy moving forward after increasing the payout in the recently ended financial year.

The placing will see 3i Infrastructure raise around GBP350.0 million by issuing shares equal to more than a quarter of its existing share capital, and at a discount to its closing share price on Wednesday of 179.00p.

In Paris, the CAC 40 index was up 0.7% and the DAX 30 in Frankfurt was down 1.0%.

Eurozone industrial production declined unexpectedly in March, data from Eurostat showed.

Industrial output dropped 0.8% month-on-month, slower than the revised 1.2% decline seen in February. Economists had forecast output to remain flat in March. Eurostat initially estimated a 0.8% fall for February. On a yearly basis, industrial production growth eased to 0.2% from revised 1.0% in February. This was the slowest growth in three months and weaker than the expected growth of 0.9%.

Still in the economic calendar Thursday, US import and export data are due at 1330 BST, alongside initial and continuing jobless claims.

Stocks in New York were called for a higher open, with the Dow 30 seen up 0.4% and the S&P 500 and the Nasdaq Composite both seen up 0.6%.

The three indices would be recovering some of the ground lost on Wednesday, after traders cashed in on the rally seen on Tuesday. The Dow and the S&P 500 had posted their biggest one-day percentage gains in two months , both up 1.3%, amid a rebound by most commodities prices.

In Asia on Thursday, the Japanese Nikkei 225 index ended up 0.4%. In China, the Shanghai Composite finished flat, while the Hang Seng index in Hong Kong fell 0.7%.

By Daniel Ruiz; danielruiz@alliancenews.com

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