MARKET COMMENT: Vodafone Leads UK Shares Higher

LONDON (Alliance News) - UK shares are modestly higher Tuesday, lifted by Vodafone earnings, amid a lack of economic data and observation of Armistice Day in some markets.

At mid-morning, the FTSE 100 is up 0.1% at 6,620.75, the FTSE 250 is up 0.2% at 15,626.19 and the AIM All-Share index is flat at 723.58.

In Europe, Germany's DAX is up 0.4%. France is closed for Armistice Day.

Vodafone tops the FTSE 100 leaders, rising 5.8% after forecasting higher earnings for the 2015 financial year and raising its interim dividend. The telecom company expects earnings before interest, tax, depreciation and amortisation for 2015 to be between GBP11.6 billion and GBP11.9 billion, up from its previous guidance of GBP11.4 billion to GBP11.9 billion, and the company raised its interim dividend to 3.60 pence, up from 3.53 pence. First-half revenue rose 8.9% to GBP20.75 billion and EBITDA climbed 5.5% GBP5.88 billion.

Land Securities is up 2.7% as the property developer said the shift in its retail portfolio to better quality properties is paying off. It reported higher net asset value per share of 1,183 pence on September 30 and said its valuation surplus over the period was GBP880.2 million, representing 7.5% growth. Its combined portfolio was valued at GBP13.2 billion.

Friends Life is 0.8% higher despite reporting a fall in value of new business in the first nine months of its financial year, largely due to the reduction in retirement income value of new business. The life assurer reported GBP94 million of value of new business from continuing operations in the period compared with GBP123 million a year earlier. Retirement income value of new business fell to GBP40 million from GBP64 million.

CRH is down 2.5% after its operating earnings and like-for-like sales grew 3% in the third quarter, as growing demand in the US more than offset moderating markets in Europe. The building materials company reiterated its forecast for earnings growth of about 10% in the whole of 2014 as earnings before interest and taxes by rose 6% on the year, driven by 10% growth in the Americas.

Renishaw is the leading FTSE 250 stock, up 9.9%, as it reported strong demand across its product lines and said it will up investment in manufacturing capacity in order to meet demand. The company said its anticipates pretax profit for the full year to be GBP95 million to GBP105 million, on revenue of between GBP425 million and GBP445 million.

Taylor Wimpey shares are up 3.5% after upgrading its operating margin growth forecast for 2014 and reiterating its medium-term forecasts, saying the recent slowdown in the UK housing market meant it is now growing at a steady and sustainable rate. The housebuilder said it is fully sold for its targeted 2014 completions and is building its order book for 2015, with 25% of 2015 completions already forward sold. The company's results are giving a lift to the sector, with Redrow up 3%, Bovis Homes up 2.3% and Persimmon up 1.3%.

Also in the FTSE 250, Oxford Instruments, down 1.9%, said it expects earnings to be at the lower end of market expectations for the full year, despite second half results forecast to be ahead of the previous year. It reported a sharp drop in pretax profit to GBP2.7 million due to higher operating costs, and exceptional costs of GBP11.8 million, despite seeing revenue rise to GBP178.5 million from GBP166.3 million.

Brent crude oil remains under pressure, hitting a low of USD81.21 a barrel, its lowest level in four years. At mid-morning, it was flat on the day at USD81.93.

US futures point to modest gains on Wall Street, with the DJIA, the S&P 500 and the Nasdaq Composite all called 0.1% higher.

In Asia, the Nikkei closed up 2.1% Tuesday despite an unexpected fall in Japanese consumer confidence in October. The Hang Seng closed up 0.3% and the Shanghai Composite ended down 0.2%.

By Ian Edmondson; ianedmondson@alliancenews.com

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