LONDON (Alliance News) - UK stock indices are pushing higher Thursday. After a tentative start in a market thinned by the US Thanksgiving Day holiday, stocks have been lifted by some reasonable European data and strong corporate results.
By mid-morning Thursday, the FTSE 100 is up 0.4% at 6,677.40, the FTSE 250 is up 0.5% at 15,488.67, and the AIM All-Share is up 0.3% at 822.08.
Major European markets also are higher, the DAX and the CAC40 both up about 0.4% as a slew of European economic data has largely been positively received.
The EU economic sentiment indicator came in at 98.8 for November, higher than the 98.0 expected and up from 97.7 in October. At the same time, the EU Consumer Confidence index came in in-line with expectations at 15.4 for November, an increase from 14.5 in October.
The German headline rate of unemployment remained unchanged for October, at 6.9%. However the number of people unemployed in the country rose by 10,000, 9,000 more than expected, while at the same time September's number was revised up to 3,000 from 2,000.
The EU M3 money supply was 1.4% year on year, lower than the 1.9% forecast by economists and significantly lower than the previous reading of 2.0%. The lower M3 reading means less money circulating in the economy and may add to concerns over eurozone disinflation.
Europe and inflation concerns will continue to provide the focus in to the afternoon, with German CPI data due at 1300 GMT. "The drop in Eurozone October CPI inflation to just 0.7% year on year was the precursor to the surprise ECB rate cut earlier in the month", says Rabobabk Senior Strategist Jane Foley. With Germany the clear economic driver within Europe, the CPI numbers will be closely watched.
Amid lots of European focused data the European Central Bank issued a warning to policy makers in its latest financial stability report Wednesday. In the bi-annual report, the bank said risks to the eurozone's financial system from outside the currency union had grown since its last assessment, due to talk in the US of the Fed scaling back its asset purchase program.
Both the euro and the pound are strong against the dollar. The euro is holding at about USD1.36, its highest level this month, while the pound is trading just above USD1.63, holding at 11-month highs.
Within UK equity sectors, tobacco stocks have been hit by a surprise U-turn from David Cameron. According to a morning report in the Times, cigarettes in the UK will be sold in plain packaging by the time of the next election. The tobacco share sector is down 1.3%, with Imperial Tobacco down 2.5% and British American Tobacco down 0.9%.
Retailers are also underperforming, the sector down 1.1% led lower by Kingfisher. The home improvement group is down nearly 5.0% after saying that trading for the third-quarter is behind expectations, mainly due to a weak performance from its French operations.
Within individual equities Thomas Cook is the stand out gainer. The travel company is up more than 13% after announcing expectation-beating cost savings.
Bank of England Governor Mark Carney has just delivered the bank's financial stability report and is answering questions.
While reading the report, Carney said the UK housing market no longer needs the support of the Funding for Lending scheme, and the scheme will now be re-focused onto small and medium sized businesses from property.
Housebuilding stocks had a strongly negative reaction the announcement, sending the sector down 1.8%. Barratt Developments took the biggest hit, currently down nearly 8.0%, while FTSE 100-listed Persimmon has dropped 5.0%. Bellway, Berkely Group and Taylor Wimpey are also all down close to 5.0%.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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Kingfisher (KGF)
British American Tobacco (BATS)