LONDON MARKET OPEN: FTSE 100 restrained as pound rallies above USD1.42

(Alliance News) - In a modestly higher start to Tuesday's European equities trading, the FTSE 100 was weighed down as the pound charged above the USD1.42 mark again.

London's large-cap index was down 2.95 points at 7,048.64 early Tuesday. The mid-cap FTSE 250 index, less affected by currency fluctuations, was up 76.78 points, or 0.3%, at 22,560.51. The AIM All-Share index was up 0.4% at 1,254.53.

The Cboe UK 100 index was down 0.1% at 702.61. The Cboe 250 was up 0.3% at 20,296.99, and the Cboe Small Companies flat at 14,886.06.

In mainland Europe, the CAC 40 in Paris was up 0.1%, while the DAX 30 in Frankfurt traded 0.8% higher as it burst out the blocks after Monday's holiday in Germany.

London's FTSE 100 index lagged as sterling retested recent highs, trading at USD1.4203 early Tuesday from USD1.4157 at the London equities close on Monday.

"The US dollar fell against major currencies overnight as New York decided to have a lower inflation-risk session, which saw risk appetite rebound, leading to a rotation out of haven US dollars," said Jeffery Halley at Oanda.

The euro traded at USD1.2258, firm on USD1.2222 late Monday, despite figures showing the German economy fared slightly worse than initially expected at the start of 2021.

Gross domestic product shrank 1.8% quarter-on-quarter in the first three months of the year. This previously had been first reported as a 1.7% contraction, and follows 0.5% growth in the fourth quarter of 2020.

The dollar edged down to JPY108.62 early Tuesday from JPY108.75 in London late Monday.

In Asia on Tuesday, the Japanese Nikkei 225 index ended up 0.7%. In China, the Shanghai Composite closed up 2.4%, while the Hang Seng index in Hong Kong was up 1.7% in late trade. The S&P/ASX 200 in Sydney closed up 1.0%.

Gold was quoted at USD1,885.26 an ounce early Tuesday, lower than USD1,884.66 late Monday. Brent oil was trading at USD68.39 a barrel, up from USD68.00.

At the top of the FTSE 100 was Aveva, up 4.2% after the software firm reported a dip in annual revenue as it saw an improved second half following pandemic disruption.

Revenue on a proforma basis slipped 1.4% to GBP1.20 billion for the financial year that ended March 31, but pretax profit shot up to GBP50.6 million from GBP19.0 million. On a statutory basis, which only includes 13 days trading from OSIsoft, revenue fell 1.6% to GBP820.4 million from GBP933.8 million, and pretax profit tumbled to GBP34.2 million from GBP92.0 million.

Aveva completed its USD5.0 billion acquisition of real-time industrial data software firm OSIsoft on March 19. OSIsoft performed well in the full year ended March 31, Aveva said, achieving 6.6% growth on a constant currency basis.

"During the first half of the year, revenue for the standalone Aveva Group was impacted by the disruptions of the Covid-19 pandemic, although performance improved significantly during the second half, resulting in broadly flat year-on-year revenue on an organic constant currency basis," the company commented.

Looking ahead, Aveva said trading conditions have largely normalised in its major markets following disruption at the start of the pandemic. The firm proposed a 23.5 pence final dividend, up 1% on a year before after adjusting to reflect the bonus element of its recent rights issue.

Smiths Group fell 1.2%. The engineering firm has hired Paul Keel as its new chief executive, replacing Andy Reynolds Smith who will step down from his role and the board with immediate effect.

Keel has previously worked at 3M, within the US and UK, where in his time he led businesses including the Consumer Business Group.

Smiths added that it remains committed to the separation of its Smiths Medical division, saying it is "actively engaging with all options to maximise value for all stakeholders and to provide the company with an enhanced platform for future growth."

Royal Mail rose 4.3% in the FTSE 250 after Peel Hunt upgraded the postal operator to Buy from Hold.

Greencore sank 12%. The convenience foods maker reported a pretax loss of GBP1.8 million for the half-year to March 26, swinging from profit of GBP27.3 million a year before.

Amigo shares crashed 57% after it said the high court has not approved its scheme of arrangement to pay compensation claims. It noted this was despite an "overwhelmingly positive creditors' vote" and is now reviewing all options, including an appeal.

Amigo has repeatedly said it would go insolvent and that claimants would get nothing if the scheme failed.

"Amigo is incredibly disappointed that the scheme has not been approved despite the 74,877 customers who voted in support of the scheme, representing over 95% of those who voted. We are currently reviewing all our options and will provide an update at the earliest opportunity," said Chief Executive Gary Jennison.

By Lucy Heming; lucyheming@alliancenews.com

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