LONDON MARKET OPEN: Oil and travel lead way in end-of-week rally

(Alliance News) - An upbeat start to US earnings season and no major shocks on the data front this week saw stocks extend gains into Friday's session.

The FTSE 100 index was up 17.35 points, or 0.2%, at 7,225.06 early Friday. The mid-cap FTSE 250 index was up 54.99 points, or 0.2%, at 22,915.38. The AIM All-Share index was down 1.73 points, or 0.1%, at 1,223.35.

The Cboe UK 100 index was up 0.2% at 716.91. The Cboe 250 was up 0.1% at 20,679.66, and the Cboe Small Companies up 0.2% at 15,617.34.

In mainland Europe, the CAC 40 in Paris was up 0.5% while the DAX 40 in Frankfurt was up 0.2% early Friday.

Markets traded higher on Friday after hurdling the week's key risk events - the start of US earnings season and some key inflation data.

"We have seen really healthy numbers out of the US banking sector this week," said Naeem Aslam, chief market analyst at AvaTrade.

Goldman Sachs will top off the third-quarter reporting season for US banks, after a string of broadly well-received results from peers such as JP Morgan and Bank of America.

Capping off the week's data calendar are US retail sales at 1330 BST on Friday.

This follows data on Thursday which showed weekly US initial jobless claims hit a fresh post-pandemic low, at 293,000, while factory prices rose 8.6% annually at their fastest rate since November 2010, but not quite as fast as the 8.7% growth analysts had pencilled in.

In Asia on Friday, the Japanese Nikkei 225 index ended up 1.8%. In China, the Shanghai Composite ended up 0.4%, while the Hang Seng index in Hong Kong was up 1.3% in late trade. The S&P/ASX 200 in Sydney ended up 0.7%.

Sterling was quoted at USD1.3721 early Friday, up against USD1.3680 at the London equities close on Thursday.

The euro traded at USD1.1614 early Friday, higher than USD1.1587 late Thursday. Against the yen, the dollar was quoted at JPY114.13 versus JPY113.63 - the dollar breaking above the JPY114.0 mark for the first time in nearly three years.

Gold was quoted at USD1,788.92 an ounce early Friday, down from USD1,797.11 on Thursday.

With risk-on mood in full swing heading into the week's end, pandemic recovery plays such as British Airways parent International Consolidated Airlines and Premier Inn hotel owner Whitbread were up 2.3% and 2.2% respectively in early trade.

Oil majors gained ground as crude prices pushed higher. Brent oil was trading at USD84.87 a barrel, up from USD83.75 late Thursday.

BP shares were up 1.5% in morning trade, while Royal Dutch Shell 'A' and 'B' stock rose 1.1%.

At the bottom of the index was Pearson, down 2.4% despite backing full-year forecasts. While total sales rose in its financial year-to-date, there was continued weakness in US Higher Education Courseware.

All segments saw growth except for Higher Education, where sales fell 7% as growth in international courseware, including Canada and the UK, was more than offset by a 9% decline in US Higher Education Courseware. Pearson pointed to a decline in US enrolments, particularly in community colleges.

More positively, its new US learning app, Pearson+, launched in late July and is "progressing well" with over two million users.

Pearson said it remains on track to deliver full-year adjusted operating profit in line with market expectations, which it placed at GBP377 million. This would be up from GBP313 million in 2020, but still far lower than the GBP581 million achieved in 2019.

Hargreaves Lansdown fell 0.9% as it reported a slight dip in revenue on a normalisation of dealing volumes post-pandemic.

Assets under administration stood at GBP138.0 billion at the end of September, up 2% since June 30. It reported net new business of GBP1.3 billion in the quarter and net new clients at 23,000, slowing from the year ago's addition of 31,000, to take active client numbers to 1.7 million.

Revenue slipped to GBP142.2 million from GBP143.7 million a year ago. Asset-based revenue was higher, but this was more than offset by a drop in interest on client money and a reduction in share-dealing revenue.

"As anticipated share-dealing volumes have declined post Covid lockdowns and across the quarter averaged 861,000 deals per month versus 980,000 in the quarter last year and 479,000 the year before," the company said.

In the FTSE 250, Mediclinic rallied 4.7% as it reported revenue growth of 12% to GBP1.58 billion year-on-year for the six months to September 30. Compared with pre-pandemic levels, revenue was up 4% and all three divisions notched growth.

"The strong first-half delivered by Mediclinic Middle East, combined with a robust performance at Hirslanden in Switzerland, positions us well heading into the second-half of the year," said Chief Executive Ronnie van der Merwe.

QinetiQ rebounded 2.7% after Thursday's 13% tumble.

By Lucy Heming; lucyheming@alliancenews.com

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