(Alliance News) - Stock prices in London were higher midday Friday amid optimism that the punishing tit-for-tat tariff war between the US and China was set to pause.
The FTSE 100 index was up 0.6% at 7,230.60 midday Friday. The midcap FTSE 250 index was up 0.7% at 19,435.72. The AIM All-Share index was up 0.2% at 872.07.
The CBOE UK 100 index was up 0.7% at 12,258.92. The CBOE 250 was up 0.8% at 17,293.93, and the CBOE Small Companies was 0.1% down at 10,841.67.
Sterling was quoted at USD1.2178 midday Friday, lower than USD1.2196 at the London equities close on Thursday.
"The cooling of trade tensions between the US and China has helped equity markets for a second day," CMC Markets UK Market Analyst David Madden said.
"Beijing have made it clear they will not retaliate in the trade dispute, and even though the situation is still tense, traders are taking the opportunity to stagger into no man's land and pick up stocks," Madden added.
On Thursday, markets rose amid hopes that a pause in the escalation of the trade war between the US and China was on the cards. Chinese Commerce Ministry spokesman Gao Feng said that although Beijing had "sufficient means" to make countermeasures to fresh tariff hikes from the US, it was focused on "preventing the trade war from continuing to escalate."
"In recent months there has been a lot of too-and-froing between the Beijing and Washington DC, but things have simmered down in the past 24 hours, and some dealers have stepped into the fold," Madden continued. "As long as the trading relationship doesn't deteriorate any further, we could see a positive finish for the week."
Amongst the stocks moving in London, shares in software firm Micro Focus International were 6.7% higher, topping the FTSE 100 Index, after recovering some of the steep losses experienced on Thursday following a guidance cut.
On Thursday, Micro Focus sank almost a third after a "weak sales execution" and "deteriorating" economic environment forced it to forecast full year like-for-like revenue to fall between 6% and 8%. This was considerably weaker than the 4% to 6% fall previously forecast.
In the FTSE 250, builders merchant Grafton Group was 8.1% higher - topping the index - after delivering interim profit and revenue growth despite ongoing "market uncertainty".
For the six months ended June, pretax profit edged 1.0% higher to GBP90.9 million after revenue rose 2.4% to GBP1.48 billion. Performance was helped by its Irish units as well as "good" growth in the Netherlands, the UK division performed well despite a "softer market".
Grafton proposed a 6.5 pence per share interim dividend, up 8.3% on the year prior.
Looking forward, Grafton intends to remain focused on self-help initiatives amid ongoing pricing and volumes pressures in the market.
Loan provider Amigo Holdings was 6.9% higher as it clawed back a little of the 52% share price declines recorded on Thursday after slashing its loan book growth forecasts.
For the year ending March, Amigo expects its net loan book growth to be "broadly flat" rather than the previous mid-teens growth forecast. This was after Amigo chose to focus on new rather than existing customers amid the "evolving regulatory and economic environment."
Iron pellet maker Ferrexpo was 0.9% higher after it was "satisfied" no employees had any involvement in the potential misappropriation of funds its donated to an Ukrainian charity.
The firm is considering further steps with regards to the potential misuse of funds donated to the third-party Blooming Land medical and social services charity.
Elsewhere in London, AIM-listed footwear retailer Shoe Zone was 32% lower after delivering a profit warning amid "challenging" trading conditions.
Meanwhile, Chief Executive Officer Nick Davis resigned to be replaced by former chief and current Executive Chair Anthony Smith.
Shoe Zone warned that profit for the year ending October 5 will be "below its expectations" amid tough markets and would be hurt by a more than GBP2 million write-down to the value of its freehold properties.
"As has been widely publicised, the UK High Street is currently facing a challenging environment in which to operate," Smith said.
"While we therefore face a short-term impact on our balance sheet, we do not anticipate any change to our dividend policy, reflecting our confidence and excitement in the long-term growth opportunities," Smith added.
Spot gold was quoted at USD1,525.80 an ounce, down from USD1,536.50 at the London equities market close on Thursday.
Brent oil was quoted at USD60.24 a barrel midday Thursday, broadly flat on USD60.85 at the London close on Thursday.
In mainland Europe, the CAC 40 in Paris was 0.9% up and the DAX 30 in Frankfurt 1.1% higher. The euro was quoted at USD1.1042 at midday Friday, down from USD1.1058 late Thursday.
Data from Eurostat showed the eurozone flash consumer price index in August was 1.0% higher on the year prior. The print was unchanged from the July consumer inflation rate.
"The main story is that core inflation pressures remain weak overall," Pantheon Macroeconomics Chief Eurozone Economist Claus Vistesen said. "This picture is distorted, however, by a still very low German harmonised index of consumer prices services inflation rate, in contrast to a much stronger national rate."
"Shifts in the weights of the package holiday component in the EZ data are the main culprit, and base effects should drive inflation back up towards the end of the year," Vistesen added. "In the meantime, however, these data will be grist on the European Central Bank doves' mill that further easing is needed."
Meanwhile, the eurozone unemployment rate for July stood at 7.5%. This was unchanged on the June print, but marked an improvement on the 8.1% reported the year prior.
On Wall Street, stocks are pointed towards a higher session Friday. Dow Jones, S&P 500 and Nasdaq Composite all seen up 0.6%.
Still to come in the economic calendar on Friday, US personal spending figures are released at 1330 BST.
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Ferrexpo (FXPO)
Shoe Zone (SHOE)
Amigo (AMGO)