(Alliance News) - Stock prices in London opened sharply higher on Monday as investors continued to celebrate Friday's trade agreement between the US and China.
On the UK corporate front, midcap retailer Sports Direct International surged after reporting strong interim results, while Cineworld fell after announcing a substantial takeover in Canada.
The FTSE 100 index was 80.70 points, or 1.1%, higher at 7,434.14 early Monday. The mid-cap FTSE 250 was up 70.88 points, or 0.3%, at 21,578.67, and the AIM All-Share was up 3.25 points, or 0.4% at 920.96.
The Cboe UK 100 index was up 0.4% 12,514.20. The Cboe UK 250 was flat at 19,348.66 and the Cboe UK Small Companies was flat, at 11,675.40.
In European equities, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.5%.
On the London Stock Exchange, NMC Health was the best blue-chip performer, up 2.3% after the UAE-focused private healthcare group said it will buyback up to USD90 million out of USD450 million in 2025 convertible bonds.
London Stock Exchange Group was up 1.7%. The Financial Times reported Sunday that the stock exchange operator is to revamp management, which will include the departure of the current operations chief. This comes, the newspaper said, as part of an attempt to tackle underperformance at LSEG's trading technology business.
Among the changes will be the departure of Chief Operating Officer & Chief Information Officer Chris Corrado, to be replaced by Anthony McCarthy, who is currently information chief at LSEG's LCH clearing house.
In the FTSE 250, Sports Direct International was the standout performer, up 11% after the sportswear retailer reported a sharp rise in interim earnings despite what it called a tough and challenging retail environment.
For the half year ended October 27, revenue rose 14% to GBP2.04 billion from GBP1.79 billion last year and pretax profit more than doubled to GBP193.4 million from GBP74.4 million. The company attributed the sharp rise in profit to the sale and leaseback of the Shirebrook distribution centre for GBP120 million.
The company did not declare an interim dividend. Sports Direct said it was on track to complete its store elevation plan - intended to optimise its stores and online operations - by the end of the financial year.
Aston Martin Lagonda was up 3.1% after the luxury sports car maker late on Friday confirmed it was evaluating various funding options and is in talks with potential investors which may result in an equity investment.
Earlier in December, Autocar magazine reported that billionaire Lawrence Stroll was preparing a bid to buy a major stake in the DBX sports utility vehicle maker.
At the other end of the midcaps, Cineworld Group was the worst performer, down 7.4%. The multiplex operator announced plans to buy Cineplex, the largest cinema operator in Canada, for CAD2.8 billion, or about USD2.1 billion.
Cineworld said it will pay CAD34 in cash for each Cineplex share. Cineplex shares closed in Toronto on Friday at CAD24.01, giving it a market capitalisation of CAD1.52 billion.
Cineworld said the acquisition was unanimously supported by its board, but remains subject to Cineworld and Cineplex shareholder approvals and various regulatory consents. Cineworld's largest shareholder, Global City Theatres, which holds a 28% stake, has agreed to vote in favour of the acquisition.
The Japanese Nikkei 225 index closed down 0.3% on Monday. In China, the Shanghai Composite closed up 0.6%, while the Hang Seng index in Hong Kong closed down 0.6%.
Meanwhile, the US-China trade deal is "remarkable" in scope but it won't solve all the problems between the world's two biggest economies, the top US negotiator said Sunday.
"This is not just about agriculture and other purchases," US Trade Representative Robert Lighthizer said in an interview with CBS's 'Face the Nation'. "The way to think about this deal, is this is a first step in trying to integrate two very different systems to the benefit of both of us."
The so-called phase one agreement announced Friday includes elements dealing with intellectual property protections, technology, currency and financial services.
Lighthizer said the USD50 billion in additional purchases of American agricultural products by China is spelled out in writing in the agreement. Though the agreement is still being translated and has yet to be signed, Lighthizer insisted, "This is totally done".
China enjoyed a better-than-expected pick-up in the key retail and industrial sectors in November, economic data showed Monday, providing a further boost to Beijing after finally agreeing the mini trade pact with the US.
Industrial production increased 6.2% on-year last month, up from 4.7% in October and the best reading in six months. There was also positive news for the country's shops, with retail sales up 8.0%, compared with a 7.2% rise the month before.
The pound was quoted at USD1.3375 early Monday, up from USD1.3346 late Friday.
UK Prime Minister Boris Johnson is to address his new intake of Conservative MPs as they prepare to vote on his Brexit deal after his landslide victory.
The prime minister will welcome the more than 100 newly-elected colleagues, many of them from former Labour areas across the north and Midlands, to the House of Commons on Monday. Johnson will use his majority of 80 to get his Withdrawal Agreement Bill to implement Brexit approved so the UK can formally leave the EU by the end of January.
"As the dust settles around the UK general election, in which PM Johnson’s Conservative Party won a healthy majority, the focus is now on the next steps for the government. Speculation remains high that Mr Johnson could announce some changes to his cabinet today, particularly to take into account those members that are no longer MPs. However, over the weekend, news reports suggest that more sweeping changes are likely to wait until after the UK leaves the EU at the end of January," said analysts at Lloyds.
The euro was quoted at USD1.1142 early Monday, up from USD1.1123 late Friday. Against the yen, the dollar was trading at JPY109.38, flat against JPY109.35 at the London close Friday.
Gold was quoted at USD1,477.77 early Monday, firm against USD1,471.61 late Friday.
Brent oil was quoted at USD65.06 early Monday, up from USD64.58 late Friday.
The economic events calendar on Monday has manufacturing and services PMI readings from the eurozone and the UK at 0900 GMT and 0930 GMT respectively.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Aston Martin Lagonda (AML)