LONDON MARKET OPEN: Smiths Group surges after raising dividend

(Alliance News) - Stock prices in London opened higher on Friday as US President Joe Biden doubled down on his vaccine pledge, while Smiths Group led the FTSE 100 after lifting its dividend and said its medical unit demerger was on track.

Biden on Thursday promised 200 million doses of Covid-19 vaccine in his first 100 days in office, doubling his initial goal, as he said at his first news conference that he intended to seek another term in office.

The FTSE 100 index was up 53.00 points, or 0.8%, at 6,727.83. The mid-cap FTSE 250 index was up 141.76 points, or 0.5%, at 21,419.60. The AIM All-Share index was 0.5% higher at 1,190.93.

The Cboe UK 100 index was up 0.9% at 670.32. The Cboe 250 was up 0.6% at 19,128.66, and the Cboe Small Companies up 0.1% at 13,795.44.

In mainland Europe, the CAC 40 in Paris was up 0.7%, while the DAX 30 in Frankfurt was up 0.9%.

The Japanese Nikkei 225 index closed up 1.6%. In China, the Shanghai Composite ended up 1.6%, while the Hang Seng index in Hong Kong finished up 1.6%.

Biden began his news conference by announcing that he planned to administer 200 million doses of Covid-19 vaccine in his first 100 days - the end of April.

Amid speculation that Biden is laying the groundwork for Harris to run in 2024, the president said he was "a great respecter of fate" but plans to run. "My plan is to run for reelection. That's my expectation," Biden said.

In the FTSE 100, Smiths Group was the best performer early Friday, up 6.0%, after the engineer said it delivered a robust performance in the first half, despite market disruptions caused by the coronavirus pandemic.

For the half year to January 31, revenue was down 7.3% to GBP1.24 billion from GBP1.15 billion the year before, but pretax profit jumped to GBP84 million from GBP46 million.

Smiths Group raised its interim dividend 6.4% to 11.7 pence from 11.0p prior.

Smiths is currently pursuing the demerger of the Smiths Medical business to list it separately in London and said the process was on track for the end of 2021.

Next was up 2.0% after RBC Capital upgraded the clothing and homewares retailer to Outperform from Sector Perform.

Aviva was up 1.8% after the insurer sold its Aviva Poland unit for EUR2.5 billion in cash to Germany's Allianz, continuing its streamlining effort.

Aviva Poland generated GBP130 million in IFRS profit after tax in 2020. It had an IFRS net asset value of GBP400 million on December 31, meaning a GBP1.8 billion uplift in value from the sale price, the company said.

Aviva said the proceeds of the sale will raise its Solvency II cover ratio by 13 percentage points.

The sale of Aviva Poland is the eighth divestment Aviva has announced in the past eight months under the streamlining strategy of Chief Executive Officer Amanda Blanc, and Aviva said the deal successfully concludes the planned refocus of the company's portfolio.

At the other end of the large-caps, Imperial Brands was the worst performer, down 1.8%, after Jefferies downgraded the tobacco stock to Hold from Buy. British American Tobacco was up 0.5% after Jefferies raised it to Buy from Hold.

Ocado was 0.9% lower after Berenberg cut the online grocer to Hold from Buy.

In the FTSE 250, Oxford Instruments was the standout performer, up 12%, after the scientific and medical equipment provider said it expects annual revenue to be marginally ahead of year before.

Oxford Instruments expects annual adjusted operating profit in a range of GBP55 million to GBP57 million. It posted adjusted operating profit of GBP50.5 million in financial 2020.

The pound was quoted at USD1.3775 early Friday, up from USD1.3727 at the London equities close Thursday.

UK retail sales rebounded on a monthly basis in February ahead of the easing of coronavirus restrictions, according to the Office for National Statistics.

On an annual basis, UK retail sales fell 3.7% in February slowing from a decline of 5.9% in January. The latest figure missed the market forecast, cited by FXStreet, for a 3.5% drop.

On a monthly basis, retail sales grew 2.1% in February, rebounding from a fall of 8.2% in January. The month-on-month print was in-line with market consensus.

In addition, the ONS said the share of shopping done online was a record high of 36% in February.

The euro was priced at USD1.1783, marginally higher from USD1.1778. Against the yen, the dollar was trading at JPY109.25, up from JPY109.15.

Brent oil was quoted at USD63.02 a barrel Friday morning, up sharply from USD61.61 at the London equities close Thursday. Gold was trading at USD1,728.04 an ounce, lower from USD1,732.44.

The international economic calendar has US personal income and consumption expenditure figures at 1230 GMT.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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