LONDON MARKET MIDDAY: Stocks Higher On US-China Trade Optimism

LONDON (Alliance News) - Stocks in London were higher at midday on Friday on hopes of a breakthrough surrounding the US-China trade talks.There is some progress in US-China trade talks, with reports suggesting that the US is considering lifting tariffs on Chinese imports to calm volatile stock markets and encourage Beijing to make concessions in ongoing trade talks.The Wall Street Journal newspaper on Thursday reported the US is considering lifting tariffs on Chinese goods in an effort to calm markets and give Beijing an incentive to make deeper concessions. People close to internal deliberations told the Journal that Treasury Secretary Steven Mnuchin proposed the idea of lifting some or all tariffs in a series of strategy meetings. The FTSE 100 was up 81.58 points, or 1.2%, at 6,916.50, while the FTSE 250 was 125.81 points higher, or 0.7%, at 18,663.41. The AIM All-Share was up 0.7% at 910.40.The Cboe UK 100 was up 1.3% at 11,751.28, while the Cboe UK 250 was up 0.9% at 16,672.33 and the Cboe UK Small Companies up 0.3% at 11,080.08.In mainland Europe, the CAC 40 in Paris was up 1.4%, while the DAX 30 in Frankfurt 1.1% was higher at midday."The WSJ article yesterday describing talks within the government of a potential easing in tariffs currently imposed on Chinese imports has helped boost market sentiment. Ultimately, with the US seeking concessions from the Chinese, they are clearly becoming aware that they will need to show good faith, and markets are clearly taking this potential move as a step closer to finding a deal between the two sides," said IG market analyst Joshua Mahony.On the London Stock Exchange, ITV was the best blue chip performer, up 3.6% with shares in the broadcaster rebounding after being hit by a broker downgrade on Thursday. The stock closed down down 5.9% on Thursday.At the other end of the large cap index, airlines were lower suffering a negative read-across after Irish carrier Ryanair Holdings issued a profit warning.Ryanair shares were down 1.9%.easyJet was the worst performer, down 2.4% and British Airways parent International Consolidated Airlines Group was down 1.0%. easyJet was downgraded to Neutral from Overweight by JPMorgan.For its financial year ending March, Ryanair is guiding for profit after tax of between EUR1.0 billion and EUR1.1 billion. Its prior guidance range was EUR1.1 billion to EUR1.2 billion.Profit after tax in its previous financial year was EUR1.5 billion, meaning profit will be down as much as 50% in financial 2019. The previous year's figure had been up 10% on financial 2017. Winter fares are expected to fall 7%, Ryanair said, compared to prior guidance of 2%. ThinkMarkets analyst Naeem Aslam commented; "if you want to keep your investors happy, you need to make sure that you are running your affairs correctly. You cannot just afford battles with unions, or strikes as both of these effect company's growth number and most importantly you want to show that your customer service policies and the image is friendly and Ryanair really needs to get a good grip on this."In the FTSE 250, Greencoat UK Wind was up 4.7% after the UK wind farms investor raised its annual payout following an increase in net asset value per share over 2018. The mid-cap company reported NAV of GBP1.39 billion as at December 31, or 123.1 pence per share. As at the end of 2017, Greencoat's NAV was GBP1.14 billion, or 111.2p a share. Greencoat declared a dividend of 1.69p per share for the final quarter of 2018, taking the total payout for the year to 6.76p per share, up from 6.49p paid the year prior. For 2019, the company is targeting a dividend of 6.94p per share.At the other end of the midcap index, Sophos Group was the worst performer, down 24% after the cyber security company reported a "subdued billings performance" for the third quarter of its financial year, which is expected to continue into the final quarter. For the three months to the end of December, billings dipped by 0.6% to USD193.7 million from USD194.0 million. For the nine-month period, billings increased slightly by 1.9% to USD546.4 million from USD536.3 million. Sophos attributed the subdued performance to a "modest decline" in billings from new customers, and a decline in hardware billings. This led to earnings before interest, taxes, deprecation and amortisation declining by 8.3% for the nine-month period to USD103.9 million from USD113.3 million. Notably, the group expects third quarter trends to continue into the final quarter of its financial year, which would lead to a modest decline in constant currency billings.The pound was marginally higher, quoted at USD1.2955 at midday compared to USD1.2920 at the London equities close on Thursday, despite disappointing UK retail sales data. UK retail sales slowed in December from the prior month, as Black Friday sales shifted consumer spending away from the previously all-important Christmas season, the latest UK retail sales figures released by the Office for National Statistics showed. Data released from the ONS on Friday showed during the five weeks from November 25 to December 29, the overall quantity bought decreased by 0.9% on the prior month, as all sectors excluding food and fuel declined. The time period excluded Black Friday but included the technology sales day Cyber Monday. If compared with the same period a year earlier, December 2018 sales were up 3.7% in value and 3.0% in quantity. Meanwhile, in the three months to December, sales dipped 0.2% by volume and 0.1% by amount spent on the previous three months, with declines across all main sectors except fuel.Stocks in New York are seen opening higher taking cues from Asia and Europe amid the positive trade sentiment. The DJIA was called up 0.5% and the S&P 500 index and the Nasdaq Composite were both called up 0.3%.After the US closing bell on Thursday, credit card provider American Express reported quarterly earnings that missed Wall Street expectations, while online video streaming company Netflix topped fourth quarter subscriber and profit estimates.In the US earnings calendar, the world's largest oilfield services firm Schlumberger will report fourth quarter earnings before the opening bell in New York. Financial markets in the US are closed on Monday for Martin Luther King Day while world leaders will gather in Davos, Switzerland for the World Economic Forum starting on Tuesday.