LONDON MARKET MIDDAY: Travel Stocks Boosted By Ryanair; US Jobs Ahead

(Alliance News) - Stock prices in London were mixed at midday on Friday, with travel stocks in the green after Ryanair raised its annual profit guidance.

Ahead, investor attention will turn to the US jobs report for December in the afternoon.

The FTSE 100 index was up 5.63 points, or 0.1% at 7,603.75. The FTSE 250 was down 36.64 points, or 0.2% at 21,606.43, and the AIM All-Share was flat at 963.77.

The Cboe UK 100 was up 0.1% at 12,879.06, the Cboe UK 250 was down 0.2% at 19,497.44, and the Cboe Small Companies was down 0.3% at 12,391.42.

In Paris the CAC 40 was flat, while the DAX 30 in Frankfurt was up 0.2%.

In the FTSE 100, airline operators International Consolidated Airlines and easyJet were the top two performers, up 4.6% and 4.0% respectively, after peer Ryanair Holdings lifted profit guidance.

Blue-chip holiday firm TUI was up 1.3% and FTSE 250 budget airline Wizz Air Holdings was up 5.6%.

Ryanair upped its annual profit after tax guidance range to between EUR950 million and EUR1.1 billion, which could represent year-on-year hike of up to 19% from EUR885.0 million. It previously expected full-year profit after tax for the 12 months to March 31 to fall between the EUR800 million and EUR900 million range. In an unscheduled statement, the airline said the festive period was "characterised by higher than expected close-in bookings at better than expected yields".

Further, Ryanair said forward bookings for January to April have risen year-on-year. The stock was up 7.0%.

"Since forming in the mid-80s Ryanair has kept costs in check by offering a no-frills service. It also flies from a mix of primary and less expensive secondary airports, using its size to negotiate favourable terms," commented Hargreaves Lansdown's Nick Hyett.

At the other end of the large cap index, Mondi was down 2.5%. The paper and packaging firm said Chief Executive Peter Oswald is to step down from the board and leave the company at the end of March.

Oswald was appointed as CEO in February 2017 following the departure of predecessor David Hathorn. He took up the role in May that year. Mondi will now begin the process of searching for a successor to Oswald. In the meantime, Chief Financial Officer Andrew King has agreed to take on the role of interim CEO.

In the FTSE 250, B&M European Value Retail was the worst performer, down 8.1%. The discount retailer reported that its sales in the run-up to Christmas grew at a slower pace than expected, with its UK unit facing "reduced shopper footfall and political uncertainty".

In the 13 weeks to December 28, its third quarter, the company said revenue increased 9.0% to GBP1.19 billion from GBP1.09 billion last year. Its UK Stores delivered an 8.8% revenue rise to GBP957.4 million from GBP879.9 million. On a like-for-like basis, the UK unit posted a 0.3% sales rise.

B&M said like-for-like performance was hindered by the broader challenges faced by the UK retail market. B&M reported that it did not participate "in any early or unusual discounting activity over the quarter".

On AIM, Joules Group was down 21% after the clothing retailer said retail sales were significantly behind expectations because of a "disappointing" online sales performance.

In a trading update for seven weeks to January 5, the seller of British countryside clothing said its retail sales were significantly behind expectations and decreased by 4.5%. In the same period a year ago, sales rose 11.7%. The company said this was a result of disappointing online sales performance due to an internally generated stock availability issue throughout the important end of season sale event, which has now been addressed.

Joules said it expects second half cost headwinds as a result of US-China tariffs, which it expects to continue into next year. As a result, Joules warned underlying pretax profit will be "significantly below" market expectations for the financial year in May. For the 12 months to May 26, 2019, Joules had posted pretax profit of GBP12.9 million, 15% higher year-on-year, with the underlying figure rising 19% to GBP15.5 million.

The pound was quoted at USD1.3060 at midday, flat against USD1.3062 at the London equities close Thursday.

The euro stood at USD1.1087 at midday, marginally lower than USD1.1100 late Thursday.

Against the yen, the dollar was trading at JPY109.63, up slightly from JPY109.50 late Thursday.

Stocks in New York were set for a higher open ahead of the US jobs report for December at 1330 GMT.

The DJIA was called up 0.2%, the S&P 500 index up 0.3% and the Nasdaq Composite up 0.4%.

Consensus for the closely-watched nonfarm payrolls figure is for 164,000 jobs to be added in December, down from 264,000 jobs the month before. The US unemployment rate is expected to hold steady at 3.5%.

"It is clear the US labour market is in rude health, so the wages component will be of extra importance as realistically, the jobless rate is unlikely to fall much more without a rise in the earnings reading. If companies are struggling to fill vacancies they might have to offer higher wages to attract potential workers. A solid earnings reading should bode well for the economy as people who earn more tend to spend more - which drives the economy along," said CMC Markets analyst David Madden.

Brent oil was quoted at USD65.41 a barrel at midday, unchanged from late Thursday.

Gold was quoted at USD1,549.98 an ounce at midday, flat from USD1,550.20 late Thursday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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