(Alliance News) - Equities in London edged higher at the open on Friday, looking to end a rough week on a positive note.
Oil majors were among some of the risers in the FTSE 100, while Boohoo shot up on AIM after releasing a review into its supply chain.
The FTSE 100 index was up 8.02 points, or 0.1%, at 5,830.80 early Friday. At this level, the UK's blue-chip index is still down 2.9% since the week began.
The mid-cap FTSE 250 index was up 69.85 points, or 0.4%, at 16,872.54. The AIM All-Share index was up 1.0% at 950.54.
The Cboe UK 100 index was up 0.1% at 580.03. The Cboe 250 was up 0.2% at 14,286.29, and the Cboe Small Companies flat at 9,017.94.
In mainland Europe, the CAC 40 in Paris was down 0.4% while the DAX 30 in Frankfurt was down 0.2% early Friday.
"Asian equity markets were mostly positive as investors weighed optimism regarding further US fiscal stimulus against rising coronavirus cases in Europe. Reports yesterday appeared to signal a deal in Washington on more fiscal support might be closer. However, there were mounting concerns about a second wave of Covid-19 infections, with the UK and France recording the highest number of new cases since the start of the pandemic," said Lloyds Bank.
France reported a record number of new daily cases of coronavirus on Thursday, saying 16,096 fresh infections had been logged in the past 24 hours. The figures from Public Health France also showed that 52 people had died from the disease in hospital over the past day.
In the UK, as of 9am on Thursday, there had been a further 6,634 lab-confirmed cases of Covid-19, taking the overall number of cases confirmed to 416,363.
Speaking to Sky News on Thursday, Health Secretary Matt Hancock said almost 10,000 people a day are contracting coronavirus, fewer than the 100,000 per day estimated during the spring peak.
Revealing the damage to public finances caused by the coronavirus crisis, official figures showed UK government borrowing in August was the third highest of any month on record.
Public sector net borrowing, excluding public sector banks, is estimated to have been GBP35.9 billion in August, up by GBP30.5 billion on a year ago and the third highest borrowing in any month since records began in 1993.
Central government bodies are estimated to have spent GBP78.5 billion on day-to-day activities in August, being GBP19.5 billion more than in August 2019. This figure includes GBP6.1 billion on the Coronavirus Job Retention Scheme and GBP4.7 billion in Self Employment Income Support Scheme payments.
Borrowing in the first five months of this financial year - April to August - is estimated to have been GBP173.7 billion. This is GBP146.9 billion more than in the same period last year and the highest borrowing in any April to August period since records began.
Pantheon Macroeconomics commented: "Looking ahead, monthly borrowing will decline sharply, despite the further measures announced by the chancellor yesterday. The new Job Support Scheme, which will see the state cover one-third of the wages of the regular hours that employees do not work if employers cover another third, is markedly less generous than the previous Job Retention Scheme."
The pound was quoted at USD1.2796 after the data, higher than USD1.2713 at the London equities close on Thursday.
The euro traded at USD1.1675, up from than USD1.1645 late Thursday.
Against the yen, the dollar was quoted at JPY105.32, down versus JPY105.50. In Asia on Friday, the Japanese Nikkei 225 index closed up 0.6%.
In China, the Shanghai Composite is down 0.1%, while the Hang Seng index in Hong Kong is down 0.7%.
Chinese government debt is set to be included in a key global bonds index, which could see tens of billions of dollars of foreign investment in the country's increasingly internationalised financial markets.
The move by FTSE Russell comes as trading in China becomes an increasingly controversial move in Washington as relations between the superpowers grow increasingly fraught.
Inclusion in the FTSE World Government Bond index, which could begin next October if approved, means CGBs will be a must-have asset for investment giants such as pension funds desperate for good returns as the global bond market is battered by the virus pandemic.
In London, Boohoo shares jumped 17% after publishing an independent review conducted into its supply chain.
The review identified "many failings" in the Leicester supply chain and recommended improvements to Boohoo's corporate governance, compliance and monitoring processes. Alison Levitt, who was appointed to run the review, was satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, however.
Levitt is "confident that the adaptations which Boohoo should make involve a relatively easily-achieved realignment of its priorities and governance systems and that the board should not feel discouraged. It has already made a significant start on putting things right."
Boohoo said it will appoint two new non-executive directors, which will strengthen the board, and it plans for one of these roles to be filled by someone experienced in dealing with environmental, social and governance matters.
The retailer has recently appointed a new group director of responsible sourcing - who joins from a "major global apparel retailer" - and it plans to consolidate its approved supplier list. Boohoo will work more closely with suppliers to ensure they are able to "manage a more consistent and predictable flow of orders".
Boohoo Chief Executive John Lyttle said: "Today we publish Levitt's independent review in full. This has identified significant and clearly unacceptable issues in our supply chain, and the steps we had taken to address them, but it is clear that we need to go further and faster to improve our governance, oversight and compliance. As a result, the group is implementing necessary enhancements to its supplier audit and compliance procedures, and the board's oversight of these matters will increase significantly."
Royal Dutch Shell 'A' and 'B' shares were up 2.2% and 2.1% respectively, while BP rose 1.7%.
"The FTSE is managing to advance, as the prospect of additional US stimulus is dragging on the US dollar, offering some relief to the battered commodities. As commodity prices rise on the weaker dollar, heavy weight miners and oil majors are advancing," commented Fiona Cincotta at City Index.
Brent oil was trading at USD42.11 a barrel, rising from USD41.52 late Thursday.
Gold was quoted at USD1,867.77 an ounce early Friday, higher than USD1,859.50 on Thursday.
Wizz Air fell 2.1% after saying it now expects to operate half of last year's capacity in October, as it noted on-going travel restrictions due to Covid-19 and a drop in demand for travel over the winter.
"Furthermore, should the level of restrictions remain at the current level, Wizz Air anticipates not to operate at a higher level of capacity during winter than its projection for October," the central and eastern Europe-focused airline said.
Cineworld rose 4.3%, rebounding after slumping 15% on Thursday after reporting a USD1.6 billion interim loss.
The economic events calendar on Friday has US durable goods orders at 1330 BST.
By Lucy Heming; lucyheming@alliancenews.com
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