LONDON MARKET MIDDAY: Stocks mixed as investors eye Biden summits

(Alliance News) - Stock prices in London were lacking direction at midday on Thursday, with investors looking to a trifecta of summits, where western powers are set to discuss further sanctions against Moscow.

US President Joe Biden was meeting NATO and EU leaders in Brussels on Thursday in a show of trans-Atlantic unity exactly one month after the start of Russia's war in Ukraine.

Biden joins Western allies for a special meeting of NATO leaders, a G7 summit and an EU leaders' summit for talks on how to support the Ukrainian people, how to further punish Russia and the long-term changes necessary to ensure Europe's security.

A proposal to strengthen NATO's eastern flank with permanent troop deployments, supported by air and naval power, is still on the table. The move would mark a violation of the NATO-Russia Founding Act, and would likely escalate tensions with Russia.

The FTSE 100 index was up 16.66 points, or 0.2%, at 7,477.29. The mid-cap FTSE 250 index was down 141.92 points, or 0.7%, at 20,859.70. The AIM All-Share index was down 1.11 point, or 0.1%, at 1,035.73.

The Cboe UK 100 index was up 0.3% at 744.08. The Cboe 250 was down 0.5% at 18,418.65, and the Cboe Small Companies up 0.1% at 15,051.23.

In mainland Europe, the CAC 40 stock index in Paris was up 0.1% while the DAX 40 in Frankfurt was down 0.1%.

"Even if a certain degree of confidence seems to remain for equity markets so far, the current high market volatility and global growth uncertainties sparked by a range of risks (central banks policies, commodity crisis, geopolitical tensions) makes it really difficult for investors to balance their portfolios. Today's session is likely to remain volatile and without clear direction prior to some expected macro developments," commented ActivTrades analyst Pierre Veyret.

In the FTSE 100, precious metal miner Fresnillo was the best performer, up 2.7%, tracking spot gold prices higher.

Gold stood at USD1,946.57 an ounce Thursday at midday, higher against USD1,933.76 at the London equities close Wednesday.

At the other end of the large-caps, Next was worst performer, down 3.5%, after the clothing and homewares retailer downgraded its earnings expectations following the closure of websites in Ukraine and Russia.

For the financial year that ended January 29, revenue was up 31% to GBP4.63 billion from GBP3.53 billion the year before, and pretax profit surged to GBP823.1 million from GBP342.4 million. Pretax profit was marginally higher than the company's recent guidance of GBP822 million.

Looking ahead, Next reduced its central guidance for full-year full price sales growth to 5% from 7%, amid the closure of its websites in Ukraine and Russia.

It has lowered sales guidance by GBP85 million and knocked its profit outlook by GBP10 million.

As a result, it expects annual pretax profit of GBP850 million, down from the previous GBP860 million forecast. This would still represent 3.3% growth from financial 2022.

Schroders and Pearson were down 3.2% and 3.0% respectively, after the stocks went ex-dividend meaning new buyers no longer qualify for the latest payout.

International Consolidated Airlines was down 2.0%. Deutsche Bank cut the British Airways parent to 'hold' from 'buy'.

In the FTSE 250, Bridgepoint was the best performer, up 14%, after the private equity investment firm reported strong results in its maiden year as a listed company.

For 2021, pretax profit was GBP62.6 million, up 29% from GBP48.5 million in 2020, and total operating income GBP270.6 million, up 41% from GBP191.8 million.

Bridgepoint had total assets under management of EUR32.9 billion at December 31, up 24% from EUR26.6 billion at the same time the year before.

Bridgepoint declared a 3.64p dividend for 2021, up from 0.79p in 2020.

Looking ahead, Bridgepoint said it is well positioned for 2022, with its financial performance in line with expectations.

Games Workshop was up 6.7%. The miniature wargames maker and retailer increased its payout for its financial year to date, following solid trading for the third quarter.

Games Workshop said its trading performance for the three months that ended February 28 was in line with expectations.

Games Workshop also on Thursday declared a dividend of 70 pence per share, in line with its policy of distributing surplus cash. For the year to date, Games Workshop has declared a total payout of 235 pence, up 27% from 185p the same period a year prior.

Energean was up 3.7%. The hydrocarbon exploration and production company reported record revenue and a narrowed loss in 2021 on higher commodity prices and an increase in production volumes.

In 2021, the London-based company generated a pretax loss of USD90.7 million, narrowed from USD113.6 million in 2020.

Adjusted earnings before interest, tax, depreciation, amortization and exploration expense grew 96% to USD212 million from USD108 million. This was on revenue of USD495.0 million, up 47% from USD335.9 million.

Elsewhere in London, EnQuest was up 8.5% after the UK North Sea and Malaysia-focused oil and gas firm reported a considerable swing to profit for 2021.

EnQuest posted a pretax profit of USD352.4 million, swinging sharply from a loss of USD566.0 million in 2020.

The profit performance was helped mainly by a non-cash net impairment reversal of USD39.7 million from a USD422.5 million charge incurred in 2020, through an increase in the near and medium-term oil price and updated asset profiles.

Revenue grew 54% in 2021 to USD1.32 billion from USD855.1 million, as the average realised oil price hiked 76% to USD73.0 per barrel from USD41.6 in 2020.

The dollar was higher across the board.

The pound was quoted at USD1.3195 at midday on Thursday, lower against USD1.3201 at the London equities close Wednesday. The euro was priced at USD1.0990, down from USD1.1005. Against the yen, the dollar was trading at JPY121.67 in London, up from JPY121.03.

A strong contribution from the UK services sector helped to offset weaker manufacturing sector growth in March, preliminary survey results from S&P Global showed.

The flash UK services PMI registered 61.0 points in March, up from 60.5 in February. The latest reading was above the market forecast, cited by FXStreet, of 58.0.

However, the manufacturing PMI fell to a 13-month low of 55.5 points in March from 58.0 in February, and was well below market expectations of 56.7. The composite PMI slipped to 59.7 in March from 59.9 in February as a result, but was above market consensus of 57.8.

On the continent, business activity in the eurozone slowed during March, as the impact of the war in Ukraine offset the recovery of demand following the easing of Covid restrictions.

The S&P Global flash composite PMI decreased to 54.5 points in March, from 55.5 points in February. This was a two-month low for the eurozone.

The manufacturing PMI fell to a 14-month low of 57.0 points in March, down from 58.2 in February. The services PMI fell to 54.8 in March from 55.5 the month before.

Chancellor of the Exchequer Rishi Sunak warned the UK is facing "challenging and uncertain" times after official forecasters predicted the biggest fall in living standards on record.

Following his spring statement on Wednesday, the chancellor insisted the government was "on the side of hard-working families".

But the opposition Labour party said that he had done nothing to tackle the cost-of-living crisis facing households up and down the country.

In his Commons statement, Sunak announced a 5p cut in fuel duty and an increase in the threshold at which people pay national insurance contributions.

Appearing on an LBC radio phone-in on Wednesday evening, Sunak said 70% of people would be better off as a result - despite an impending increase in national insurance rates to pay for the NHS and social care.

Brent oil was quoted at USD122.00 a barrel on Thursday at midday, unchanged from USD121.99 late Wednesday.

New York was pointed to a higher open ahead of US jobless claims at 1230 GMT and PMI data at 1345 GMT.

The Dow Jones Industrial Average was called up 0.5%, the S&P 500 up 0.6%, and the Nasdaq Composite up 0.7%, based on futures trading. The indices closed down 1.3%, 1.2% and 1.3% respectively on Wednesday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com