(Alliance News) - Stock prices in London were higher at midday on Tuesday on a busy day of company news, as investors look ahead to more earnings from high-profile US technology names.
The large-cap FTSE 100 index was up 49.08 points, or 0.7%, at 7,271.80. The mid-cap FTSE 250 index was up 167.22 points, or 0.7%, at 23,109.00. The AIM All-Share index was up 0.1% at 1,230.51.
The Cboe UK 100 index was up 0.6% at 720.21. The Cboe 250 was up 0.7% at 20,815.52, but the Cboe Small Companies was down 0.3% at 15,545.34.
In Paris, the CAC 40 stock index was up 0.5%, while the DAX 40 in Frankfurt was up 0.9%.
"The FTSE 100 made a strong start on Tuesday, lifted by some strong corporate updates and as investors reacted to the fresh records set on Wall Street overnight," said AJ Bell's investment director Russ Mould. "Strong corporate results are helping with sentiment. Tomorrow's budget in the UK and Thursday's European Central Bank meeting may help return the wider economy to the forefront of investors' minds. Whether this will be supportive or have a negative impact on markets remains to be seen."
In the FTSE 100, Reckitt Benckiser was the best performer, up 6.2%, after the household goods maker said third-quarter revenue rose on a like-for-like basis and raised its full-year revenue guidance.
Reckitt posted net revenue of GBP3.28 billion in the three months to September, up 3.3% on a like-for-like basis compared to the same period last year.
Looking ahead, the Dettol cleaning products maker said that, following stronger-than-expected trading, it expects like-for-like net revenue growth for 2021 in the range of 1% to 3%, up from 0% to 2% previously guided.
It also remains confident in delivering margin improvement in 2022 and is on track to exit 2022 with mid-single digit like-for-like net revenue growth.
B&M European Value Retail was up 2.8% after JPMorgan raised the variety store chain to Overweight from Neutral.
Whitbread was up 3.5% after the hospitality firm said its Premier Inn chain's recovery in the first half was ahead of expectations as lockdown restrictions eased in the UK and Germany.
For the six months to August 26, revenue more than doubled to GBP661.6 million from GBP250.8 million last year. Pretax loss was nearly eliminated, narrowing to GBP19.3 million from GBP724.7 million. Whitbread declared no interim dividend, in line with year before.
Looking ahead, Whitbread said its sales recovery is ahead of expectations, and its UK like-for-like revenue per available room run rate has "potential" to make a full recovery next year.
Whitbread said leisure demand remains strong in the UK heading into the second half, while business demand was improving.
In the FTSE 250, Essentra was up 4.5% after the company reported a robust start to the second half of the year, as it aims to become a "pure play global components" business over time.
Essentra, which manufactures plastic caps, clamps, fasteners and knobs, said it has simplified its portfolio over the past few years into three global businesses, each with leading market positions and a clear purpose and strategy.
Milton Keynes, England-based firm has now decided to review the full range of strategic options for the Filters business, which is likely to conclude in the second quarter of 2022 at the earliest. Essentra noted that its Filters division has made significant progress over the last four years on the delivery of all strategic "game changers" and now has attractive long-term growth prospects.
Elsewhere, THG was down 12%, despite the beauty products retailer and e-commerce platform provider delivering a strong quarterly performance and outlining steps to improve its corporate governance.
THG, which trades as The Hut Group, reported revenue of GBP507.8 million for the three months to September 30, up 34% from GBP378.1 million last year and up 86% on 2019.
Looking ahead, THG said it remains on target to trade "comfortably" ahead of expectations set out at the time of its September 2020 initial public offering. At the time, THG had guided to 2021 revenue growth of between 20% to 25%. For 2021, THG expects acquisitions to contribute GBP260 million to revenue.
At 269.00p on Tuesday, THG shares are worth barely more than half their 500p IPO price.
Turning to corporate governance, THG has appointed Russell Reynolds Associates to undertake the search for a new independent chair as it seeks to move to the Premium segment of the London Stock Exchange in 2022. Founder Matthew Moulding will cancel his 'golden' share to facilitate the move.
THG also named a Softbank Group executive to its board as a non-executive director. Andreas Hansson, managing director of SB Management, will join the board immediately. Softbank back in May subscribed for USD730 million in THG shares and signed an collaboration and option agreement.
Petrofac was down 19% at 128.77 pence after the oilfield services firm reported deteriorated profitability in the first half of 2021 amid challenging market conditions.
In addition, the company proposed an equity raise of USD275 million. The net proceeds of the equity raise, together with other components of the refinancing plan, will be used to reduce indebtedness and to pay the GBP77 million penalty recently imposed by the Serious Fraud Office over bribes paid by former staff.
The London-based oilfield services provider said revenue for the six months to June 30 totalled USD1.60 billion, down from USD2.10 billion posted for the first half of 2020. Net loss widened to USD86 million from USD78 million year-on-year.
Petrofac is placing 173.6 million new shares at 115.00 pence each, a 27% discount to Monday's closing price of 158.00p.
Stocks were mixed in Asia amid concerns over a fresh virus outbreak in China, which has left tens of thousands of people in lockdown.
The pound was recovering from earlier losses, quoted at USD1.3820 at midday on Tuesday, up from USD1.3772 at the London equities close Monday, as investors look ahead to the UK government budget on Wednesday.
The budget will be delivered by UK Chancellor of the Exchequer Rishi Sunak on Wednesday at 1230 BST.
Millions of UK public sector workers are in line for a budget pay rise as chancellor announced the UK's economy is "firmly back on track" after the coronavirus pandemic.
Sunak confirmed he will scrap the year-long public sector pay freeze in his statement, paving the way for a possible wage increase next year for those such as teachers, nurses, police and armed forces personnel.
The chancellor last November "paused" public sector pay increases for 2021-22, with the exception of the NHS and those earning less than GBP24,000, after heavy borrowing during the Covid-19 crisis.
In addition, the UK government announced it will increase the minimum wage for around two million workers, with those aged 23 and over to see their pay increase from GBP8.91 an hour to GBP9.50 as of April 1.
The 59p hourly boost to the so-called "national living wage" will mean a full-time worker on the lowest pay will receive a rise of more than GBP1,000 per year, according to the government, in an inflation-busting 6.6% hike.
"The pound doesn't usually react drastically to the UK budget and in light of the slowing economic recovery, but inflationary environment, Sunak is expected to refrain from any major fiscal policy changes this week. Still, the balancing act is always tricky, let alone during a waning economic recovery with potentially new economic restrictions on the horizon to combat rising Covid-19 cases," said analysts at Western Union.
The euro was priced at USD1.1615, firm from USD1.1612. Against the yen, the dollar was trading at JPY114.00, up from JPY113.68.
Brent oil was quoted at USD85.71 a barrel Tuesday at midday, down from USD86.57 late Monday. Gold stood at USD1,802.25 an ounce, lower from USD1,807.93.
The economic events calendar on Tuesday has a US consumer confidence index print at 1500 BST.
US stock market futures were pointed to a higher start as investors brace for more earnings from Twitter, Google-parent Alphabet, and Microsoft after the closing bell on Wall Street.
The Dow Jones Industrial Average was called up 0.3%, the S&P 500 up 0.4% and Nasdaq Composite up 0.6%.
Investors will be looking to see if Microsoft can make a strong start as it posts first quarter numbers, with focus on its biggest driver - the Intelligent Cloud unit. The stock was up 0.7% in pre-market trade.
Alphabet will post earnings against a backdrop of complaints from US regulators pertaining to issues related to the Google owner's market dominance in online advertising and over privacy concerns.
Market participants will be on the look out for any commentary around the recently released Pixel 6 phone, currently available for pre-order. The flagship device will attempt to take market share from rivals Apple and Samsung with its aggressive pricing. Alphabet shares were up 0.1% in pre-market.
Twitter was up 1.5% in pre-market trade with investors looking to see if the social media firm provides any update on its Twitter Blue subscription offering, as the platform attempts to maximise revenue from its user base.
Facebook shares were up 2.5% in pre-market trade after the social media firm late Monday reported solid quarterly growth and said it would add USD50 billion to its share buyback programme.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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