LONDON MARKET OPEN: LSEG Slumps After HKEX Walks; easyJet, Page Drag

(Alliance News) - Stock prices in London opened higher on Tuesday, with the FTSE 100 shrugging off a decline by London Stock Exchange Group, while the FTSE 250 was up by hindered by falls for PageGroup and easyJet.

The FTSE 100 index was up 19.70 points, or 0.3% at 7,217.58. The FTSE 250 was up 23.45 points, or 0.1%, at 19,443.69. The AIM All-Share was up 0.1% at 863.62.

The Cboe UK 100 index was up 0.1% at 12,222.02. The Cboe UK 250 was up 0.1% at 17,368.62. The Cboe UK Small Companies was down 0.1% at 10,815.18.

In European equities, the CAC 40 index in Paris was up 0.1%, and the DAX 30 in Frankfurt was down 0.2%.

In the FTSE 100, London Stock Exchange Group was the worst performer, down 6.1% after Hong Kong Exchanges & Clearing pulled out of its bid to buy the UK bourse.

HKEX made a GBP29.6 billion offer, or GBP31.6 billion including debt, for LSEG in mid-September. The bid was rejected later that month. LSEG had said it saw "fundamental flaws" in the approach, and also noted any combination would come under intense scrutiny from a variety of regulators.

HKEX shares closed 3.0% higher on Tuesday in Hong Kong.

In the FTSE 250, Electrocomponents was up 5.1% after the electrical parts distributor reported an improved performance in the first half of its current financial year, as it continues to invest in strategic initiatives.

Electrocomponents said it expects to report 5% revenue growth in the six months to the end of September, thanks to continued "strong" performance in its Industrial division. The Digital unit, meanwhile, performed broadly in line during the period, Electrocomponents noted.

At the other end of the midcaps, PageGroup was down 11% after the recruiter said its third quarter was hurt by political and economic uncertainty in its larger markets, including Greater China, the UK and France.

Profit in PageGroup's Asia Pacific region fell by 4.0% to GBP44.1 million from GBP46.0 million, as PageGroup's operations in China declined on trade tariff uncertainty and social unrest hurting its business in Hong Kong. US-China trade war concerns also affected the group's business in Singapore.

In addition, profit from the UK dropped by 4.1% to GBP33.8 million from GBP35.2 million, as increased Brexit uncertainty took its toll on candidate and client confidence at all levels within the period.

Looking ahead, due to continued uncertainty and PageGroup's limited forward visibility, the company said it expects operating profit for 2019 to be in the range of GBP140 million to GBP150 million. In 2018, PageGroup's operating profit was GBP142.5 million.

easyJet was down 5.1% despite the budget airline saying it delivered a "solid" performance in the fourth quarter, continuing to perform in line with expectations.

easyJet expects headline pretax profit of between GBP420 million and GBP430 million - in the upper half of the airline's guidance range. In the year ending September 30, 2018, the airline recorded GBP578 million in headline pretax profit.

At constant currency, annual total revenue per seat is expected to decrease by about 2.7%. Last year, the airline reported revenue per seat of GBP61.94. In the second half, however, revenue per seat is expected to see slight growth, an outperformance on previous guidance.

Chief Executive Johan Lundgren attributed the increased demand on the "disruption" seen at rivals British Airways and Ryanair Holdings. British Airways is owned by FTSE 100-listed International Consolidated Airlines Group.

IAG and Ryanair have spent the summer fighting with pilot and cabin crew unions, with Ryanair hurt by several strikes.

IAG shares were down 0.8% and Ryanair was down 2.6%.

"The market consensus of the shares as a hold is indicative of mixed views on easyJet's prospects, which is likely to remain the case until there is some improved visibility on progress," commented Interactive Investor's Richard Hunter.

The Japanese Nikkei 225 index closed up 1.0%. In China, the Shanghai Composite closed up 0.3%, while the Hang Seng index in Hong Kong is up 0.4%. The Shanghai market reopened Tuesday after being shut for a week for the Golden Week holidays. Hong Kong also reopened on Tuesday after being closed for holiday on Monday.

Chinese business activity expanding at its quickest pace in five months in September, the Caixin general services purchasing managers' index showed.

The composite PMI, which covers both manufacturing and services, rose to 51.9 in September from 51.6 in August, its best performance since April.

Caixin said the improvement was helped by improved manufacturing output, despite a softer rise in activity in the services sector.

The pound was quoted at USD1.2284 Tuesday morning, lower than USD1.2321 at the London equities close Monday.

On the political front, campaigners are expected to lodge an appeal after a judge dismissed a legal action aimed at forcing UK Prime Minister Boris Johnson to request a Brexit extension if no withdrawal deal is secured with the EU by October 19.

The Outer House of the Court of Session in Edinburgh refused the order sought by SNP MP Joanna Cherry QC and others in a judgment on Monday. Lord Pentland ruled it was not necessary to compel Johnson to comply with the terms of the so-called Benn Act given the "unequivocal assurances" of Boris Johnson and the government made before the court. The court's Inner House is expected to hear an appeal on Tuesday.

Ahead, US Federal Reserve Chair Jerome Powell will speak at the National Association of Business Economics at 1930 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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