LONDON MARKET MIDDAY: Stocks set aside hawkish Fed, Russia war fears

(Alliance News) - Stocks in London were higher at midday on Friday shaking off fears over Russia sanctions and a hawkish Federal Reserve.

The FTSE 100 index was up 62.70 points, or 0.8%, at 7,614.51. The mid-cap FTSE 250 index was up 50.30 points, or 0.3%, at 21,088.10. The AIM All-Share index was up 2.61 points, or 0.2%, at 1,053.33.

The Cboe UK 100 index was up 1.0% at 758.24. The Cboe 250 was up 0.5% at 18,550.29, and the Cboe Small Companies up 0.% at 15,417.21.

In mainland Europe, the CAC 40 in Paris was up 1.4%, while the DAX 40 in Frankfurt was up 1.3%.

"All European benchmarks were in the green on Friday morning, with the best performances brought by Athens, Milan, and Paris, mostly due to energy shares," said ActivTrades analyst Pierre Veyret.

In the FTSE 100, oil majors Shell and BP were up 2.8% and 2.0% respectively, tracking spot oil prices higher.

Brent was quoted at USD101.00 a barrel on Friday at midday, up from USD99.08 a barrel Thursday evening.

Energy prices rose amid fresh sanctions on Russia. The EU on Thursday said it had approved an embargo on Russian coal, which was followed by Japan deciding the same on Friday, slamming Moscow for violations of international law in Ukraine.

In the FTSE 250, Ferrexpo was the best performer, up 12%. The Ukraine-focused iron ore pellet producer said its operations are outside the main conflict zones, allowing it to continue operations and deliveries to key customers in Europe.

The Baar, Switzerland-headquartered firm reported total iron ore pellet production of 2.7 million tonnes in the first quarter of 2022, in line with the same period in 2021. However, iron ore pellet production fell 11% below the fourth quarter, due to operational and logistical constraints following Russia's invasion of Ukraine.

Ferrexpo noted that logistics pathways to Europe through rail and barge remain open, while activities at the Black Sea port of Pivdennyi continue to be suspended. Sales to customers in Europe represented roughly 50% of sales in the past.

CMC Markets was up 9.0% after the online trading company said it expects its annual profit to come at the upper end of forecasts after enjoying its "strongest quarter" of its financial year.

The London-based firm said its net operating income performance for the year ended March 31 will be a non-pandemic record. CMC saw a bump in fortunes during the pandemic amid market volatility.

CMC said the fourth quarter was the strongest quarter of if its financial year, pushing annual net operating income to the top end of guidance at around GBP280 million. This would represent a 32% fall from GBP409.8 million a year prior, a period boosted by the pandemic. Compared to financial 2020, net operating income is up 11% from GBP252.0 million.

At the other end of the midcaps, International Public Partnerships was down 3.9% at 164.04 pence. The infrastructure investment company said it will launch a placing, open offer, offer for subscription and intermediaries offer at an issue price of 159.50p each.

The issue price represents a discount of 6.5% to the closing price of 170.60p on Thursday.

Elsewhere, Hollywood Bowl Group was up 7.2% after the tenpin bowling operator said it will reinstate its dividend after a record first half.

The Hemel Hempstead, England-based firm expects to report revenue for the first half to March 31 of GBP91.3 million, a marked rise from GBP12 million from a Covid-19-hit year prior.

It represents a "record" interim revenue figure, the company explained. Compared to pre-pandemic times, revenue was up 36% and climbed 27% on a like-for-like basis.

On AIM, Sensyne Health was down 68% after the clinical artificial intelligence company warned that without further financing it will not be able to continue beyond this month.

While the firm said it has entered a non-binding term sheet for an additional GBP15 million in financing, it added that it may have to cancel its AIM listing.

"Shareholders' attention is specifically drawn to the proposed term to cancel the company's shares from trading on AIM and the highly dilutive impact of granting conversion rights to the Noteholders and the proposed change in exercise price of the warrants associated with the loan notes," the company said.

Chief Executive & Founder Paul Drayson stepped down from the board with immediate effect. He will be replaced by Alex Snow, former CEO of Landsdowne Partners UK.

The dollar was higher across the board. The euro was priced at USD1.0872, down from USD1.0900. Against the yen, the dollar was trading at JPY124.06 in London, up from JPY123.85.

The single currency was under pressure as voters prepares to head to the polls for the first round of France's presidential election on Sunday.

French President Emmanuel Macron on Friday hit out at his main election rival, far-right leader Marine Le Pen, as his narrowing lead in polls intensified concerns among supporters that winning a second term is far from assured.

Macron accused Le Pen of "lying" to voters on social policy, having a "racist" programme aimed at dividing society and showing "complacency" in her ties with Russian leader Vladimir Putin.

The president is projected to come out on top in Sunday's first round of voting, but far short of the majority needed to avoid a run-off between the top two candidates on April 24 – and with Le Pen close behind.

Adding to the intrigue, far-left candidate Jean-Luc Melenchon is snapping at their heels in third place and still fancies his chances of causing an upset by reaching the second round.

While Macron easily beat Le Pen in the 2017 run-off, polls have shown a much tighter scenario this time, with the far-right leader reducing her gap with the incumbent each week.

"Emmanuel Macron is currently being challenged by Marine Le Pen in the early opinion polls and as Le Pen has previously voiced interest in France leaving Europe and the euro, the outcome of Sunday will likely add further volatility to the euro ahead of next week," said analysts at OFX.

The pound was quoted at USD1.3042 at midday on Friday, down from USD1.3057 at the London equities close Thursday.

UK Prime Minister Boris Johnson is set to meet the German Chancellor Olaf Scholz as they look to discuss how to help European countries wean themselves off Russian gas following the attack on Ukraine.

The PM will host Scholz at Downing Street on Friday, with a press conference planned for the afternoon.

Johnson is expected to offer assistance to Berlin, which is still heavily reliant on Russian gas, to reduce its dependence on Moscow's energy exports in a bid to starve Vladimir Putin's war machine of funds.

Meanwhile, European Commission President Ursula von der Leyen announced Friday that she was en route to the Ukrainian capital Kyiv, along with the bloc's diplomatic chief Josep Borrell.

Gold stood at USD1,930.82 an ounce, soft against USD1,931.30 late Thursday.

New York was pointed to a slightly higher open as investors continue to digest the Federal Reserve's hawkish commentary on interest rates.

The Dow Jones Industrial Average was called up 0.2%, the S&P 500 up 0.1%, and the Nasdaq Composite up 0.1%, based on futures trading.

The main data print on a quiet Friday will be wholesale inventories from the US at 1500 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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