LONDON MARKET MIDDAY: Stocks Extend Bull Run Ahead Of US Banks Updates

LONDON (Alliance News) - Stocks in London were higher on Friday midday, with the FTSE 100 continuing an unbroken rally since the start of 2017, while the market awaits fourth-quarter trading updates from a string of large US banks in the London afternoon.

The FTSE 100 was up 0.3%, or 22.00 points, at 7,314.37 at midday, having ended on Thursday its 13th straight session higher. This was the blue-chip index's 11th straight record closing high.

The FTSE 250 was 0.2% higher at 18,334.70 and the AIM All Share was up 0.2% at 872.09.

The BATS UK 100 index was up 0.2% at 12,354.01, the BATS 250 was up 0.1% at 16,678.61, and the BATS Small Companies was flat at 11,043.27.

In Europe, the CAC 40 in Paris was 0.9% higher and the DAX 30 in Frankfurt also was up 0.6%.

"After a miserable day yesterday the bargain hunters have stepped in to rescue Barratt Developments, with the temptingly-low forward valuation and signs of healthy cash flow clearly providing an incentive," said IG analyst Chris Beauchamp.

Barratt was up 3.6% at 516.00 pence, the best FTSE 100 performer, recovering some ground after touching an intraday low of 489.20p on Thursday.

The housebuilder said on Thursday it expects a 7.0% year-on-year rise in its interim pretax profit as stronger demand outside London offset lower completion levels in the UK capital. Barratt said it anticipates it will build the same number or fewer homes in its current financial year than the one prior amid a more competitive land market in the UK.

ITV was another gainer, up 2.0%, after the broadcaster was added to investment bank Goldman Sachs's Conviction Buy list.

"The bank thinks ITV is one of the key potential targets, especially given that Liberty Global is already signalled its desire to go shopping in the sector," noted IG's Beauchamp.

At a broker conference last week, Liberty Global Chief Executive Mike Fries made comments suggesting the group sees European free-to-air broadcasters as an attractive space and that Liberty would consider making selective acquisitions in the industry.

At the moment, Liberty owns 9.9% of ITV and is taking a keen interest in the UK, where it already owns the Virgin Media television, telecoms and broadband business.

On the downside was Marks & Spencer, falling 1.2%, giving back the 1.0% gain seen on Thursday on the back of a positive Christmas update. Berenberg reiterated its Sell stance on M&S despite the retailer reporting third quarter figures above consensus estimates.

"We...believe the business remains structurally challenged by its lack of product differentiation and its oversized, inflexible store estate," said Berenberg analyst Michelle Wilson.

In the FTSE 250, SIG was up 12% after the building products supplier affirmed its underlying profit expectations for the year as it reported a marginal rise in like-for-like sales. SIG affirmed it continues to anticipate underlying pretax profit for 2016 of between GBP75.0 million and GBP80.0 million, down from GBP87.4 million in 2015. This was downgraded by the group in November.

Meanwhile, Grafton Group was up 6.8%. The builder's merchant reported strong revenue growth for 2016, driven by good trading in its UK and Ireland arms which offset a tougher period for its Belgian business. FTSE 100-listed peer Travis Perkins was up 2.0%.

Mid-cap pubs and restaurants operator Mitchells & Butlers was up 4.9%. It said like-for-like sales grew in the first 15 weeks of its financial year, with trading over the festive period particularly strong for all of its brands.

Furniture and homewares retailer Dunelm Group and water company Pennon Group were the two biggest FTSE 250 decliners, down 4.5% and 3.6%, respectively. Dunelm was downgraded to Underperform from Hold by Jefferies, while Pennon was cut to Underperform from Neutral by Credit Suisse.

In New York, stocks were called for a positive open, with the Dow 30, the S&P 500 index and the Nasdaq Composite all pointed up 0.2%.

The US earnings season gets underway on Friday afternoon, with a number of banks reporting fourth quarter figures. Among these are JP Morgan, Wells Fargo and Bank of America.

In the US economic calendar, retail sales and the producer price index are both at 1330 GMT. US business inventories are at 1500 GMT, and the Baker Hughes US oil rig count is at 1800 GMT.

Already released in a thin economic calendar Friday, the Credit Conditions Survey from the Bank of England showed that UK banks expect availability of secured credit to households to increase in three months to March, having remained unchanged in the three months to December.

By Daniel Ruiz; danielruiz@alliancenews.com

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