UK MORNING BRIEFING: Shares Gain On Positive Earnings Despite Fed

LONDON (Alliance News) - UK investors have shrugged off a slightly hawkish tone from the US Federal Reserve to bid shares higher in London Thursday.

Focus has shifted to US economic data due later in the session and to a raft of UK corporate earnings reports. FTSE 250 constituents RPS Group, Countrywide and National Express lead gainers on their positive pre-market statements, while St James's Place leads the FTSE 100 on its report of strong growth in funds under management. Barclays is the second leading blue-chip gainer, as it beat earnings expectations.

Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.1% at 6,456.77
FTSE 250: up 0.3% at 15,273.78
AIM ALL-SHARE: up 0.2% at 716.65
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Hang Seng: closed down 0.5% at 23,702.04
Nikkei 225: closed up 0.7% at 15,658.20
DJIA: closed down 0.2% at 16,974.31
S&P 500: closed down 0.1% at 1,982.30
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GBP-USD: down at USD1.5975
EUR-USD: down at USD1.2566

GOLD: down at USD1,202.34 per ounce
OIL (Brent): down at USD86.48 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in GMT)

08:55 Germany Unemployment Rate s.a.
10:00 EU Consumer and Industrial Confidence
10:00 EU Business Climate, Services Sentiment and Economic Sentiment Indicator
12:30 US Gross Domestic Product Preliminary
12:30 US Jobless Claims
12:30 US Personal Consumption Expenditures
13:00 Germany Consumer Price Index Preliminary
13:00 US Fed's Yellen Speech
14:30 US EIA Natural Gas Storage
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The US Federal Reserve voted Wednesday to end its monthly purchases of government-backed debt, citing "sufficient underlying strength in the broader economy" to halt the unconventional monetary stimulus programme. The central bank also kept its benchmark interest rate near zero, which it said "remains appropriate" - more than five years after the US escaped the 2007-09 recession. The unprecedented low Federal Funds rate, in place since December 2008, is likely to remain in place "for a considerable time," the Fed's monetary policy committee said, "especially if projected inflation continues to run below the committee's 2% longer-run goal."
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UK house prices rebound more than expected in October, survey figures from the Nationwide Building Society showed. The house price index recovered by 0.5% from September, when it fell 0.1% for the first time after sixteen consecutive months of rising. Economists were looking for a 0.3% increase. Year-on-year, house prices rose 9%, after an 9.4% gain in the previous month. Economists had forecast a 8.5% climb in prices. The unadjusted average house price rose to GBP189,333 in October from GBP188,374 in September.
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Germany's jobless rate remained unchanged in September, provisional results from the Federal Statistical Office showed. The unemployment rate held steady at adjusted 5% in September. In the same period of 2013, the rate was 5.2%. On an unadjusted basis, the jobless rate fell marginally to 4.9% from 5% in August.
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CHINA Q3 CURRENT A/C SURPLUS USD81.5 BLN VS. USD73.4 BLN IN Q2
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EU-brokered efforts to resolve a gas dispute between Russia and Ukraine were due to resume late Thursday, Russian Energy Minister Alexander Novak told local media, after talks in Brussels the previous night failed to deliver a breakthrough. Russia has not sold gas to Ukraine since June due to a row over billions of dollars in arrears. The EU is concerned that the showdown will disrupt gas supplies across the continent, where the energy-intensive winter is approaching. A sticking point in the talks late Wednesday had been Kiev's inability to provide a written guarantee for its next upfront gas payments, as demanded by Moscow, Novak told Russian media.
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The party of Ukrainian President Petro Poroshenko claimed victory Wednesday in parliamentary elections held at the weekend, while the pro-Russian separatists in the country's east said they were preparing for war.
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BROKER RATING CHANGES
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HSBC RAISES NEXT TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 7350 PENCE
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TRADERS: SOCGEN CUTS STANDARD CHARTERED TO 'HOLD' ('BUY')
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COMPANIES - FTSE 100
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Royal Dutch Shell reported higher earnings in the third quarter as revenue from its upstream and downstream activities both increased, despite production falling during the period. During the third quarter ended September 30, Shell said earnings totalled USD5.3 billion compared to USD4.2 billion in the third quarter of 2013. Revenue totalled USD107.85 billion, down from the second quarter when it totalled USD111.22 billion. In the third quarter of 2013, revenue reached USD116.51 billion.
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Barclays said it has set aside GBP500 million in light of regulators' investigations into alleged foreign exchange manipulation, as the British lender reported a rise in third-quarter pretax profit. In a statement, Barclays said it made a GBP1.22 billion pretax profit in the third quarter of 2014, compared with GBP1.17 billion in the corresponding quarter last year. On an adjusted basis, which strips out items such as the foreign exchange provision, own credit, and gains and losses on acquisitions and disposals, Barclays' third-quarter pretax profit increased to GBP1.59 billion from GBP1.39 billion. Barclays will pay a third interim dividend of 1.0 pence.
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Barclays, HSBC Holdings and Royal Bank of Scotland Group will make a total provision of about GBP1 billion for settlements with regulators following a probe into the abuse of foreign exchange benchmarks, Sky News reported on Wednesday. Sky News said it understands the banks plan to make the provision as part of their third-quarter results.
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A Saudi Arabia-based real estate company has sued Barclays for USD10 billion, claiming the bank stopped pursuing lease payments from the Saudi government on military complexes in the country in order to obtain a banking licence there, Reuters reported on Wednesday. Jadawel International, a unit of London-based MBI International Holdings Inc, claimed Barclays "hatched a fraudulent scheme" to secure a rare banking licence for the kingdom, according to the suit filed in New York.
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US federal and state prosecutors have reopened investigations into Standard Chartered to determine whether the bank withheld evidence of Iran sanctions violations, Bloomberg reported on Thursday, citing two people briefed on the matter. The US Justice Department, Manhattan District Attorney Cyrus Vance Jr and New York Department of Financial Service Superintendent Benjamin Lawsky are all reopening their inquiries into the bank to determine if it deliberately withheld information from regulators prior to the 2012 deferred prosecution agreement, Bloomberg added.
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Wealth manager St James's Place reported strong growth in funds under management in the third quarter, buoyed by a 23% increase in net inflows as clients took the opportunity of the higher limits now allowed on the amount that can be put into Individual Savings Accounts. The company said its funds under management stood at GBP49.1 billion at the end of September, up from GBP41.8 billion a year earlier and up 11% since the start of 2014, as it booked net inflows of GBP1.27 billion in the quarter, up from GBP1.03 billion a year earlier.
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AstraZeneca said the US Food and Drug Administration has approved its once-daily XIGDUO XR drug for the treatment of adults with type 2 diabetes. XIGDUO XR is already approved in Australia for the treatment of adults with type 2 diabetes, along with diet and exercise. XIGDUO, meanwhile, is approved in the European Union.
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BT Group raised its interim dividend by 15%, after reporting strong growth in profits, buoyed by growth in BT Sport subscribers and its fibre broadband operations and due to cost cutting. The company reported a pretax profit of GBP1.11 billion for the six months to September 30, up from GBP948 million a year earlier, even though revenue declined to GBP8.74 billion, from GBP8.94 billion. Its pretax profit in the fiscal second quarter rose to GBP690 million, from GBP609 million a year earlier, even though revenue fell to GBP4.38 billion, from GBP4.49 billion. Chief Executive Gavin Patterson said the results were slightly ahead of market expectations, driven by reduced costs and higher operating earnings.
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Aviva reported an 12% rise in value of new business from continuing operations, driven by increases across Europe and Asia more than offsetting a drop in the UK and Ireland. The insurer's value of new business from continuing operations in the first nine months of the year rose to GBP690 million from GBP619 million in the corresponding period last year.
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COMPANIES - FTSE 250
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Henderson Group said its assets under management increased in the third quarter, with net inflows boosted by its UK and European retail businesses and global institutional flows. The FTSE 250 investment manager said assets under management increased 2.5% to GBP76.6 billion at September 30. That number was further boosted to GBP79.9 billion on October 1 following the completion of its acquisition of US equity manager Geneva Capital Management for GBP120 million. The group said it saw net inflows of GBP1.4 billion in the period, driven by the performance of its UK retail, European retail and global institutional performance.
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Millennium & Copthorne Hotels said its pretax profit rose in the third quarter, broadly in line with a rise in revenue, but said it continues to be impacted by the strength of sterling. The FTSE 250 hotels company said its pretax profit in the three months to the end of September was GBP50.2 million, up 6.6% on the GBP47.1 million posted a year earlier. The rise was broadly in line with the 6.2% increase in revenue during the period to GBP215.9 million from GBP203.3 million the year earlier.
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Transport operator National Express Group said its third-quarter pretax profit was up nearly 15% on the year, driven by revenue growth, performance improvements and cost cutting, and said it is on track to meet its profit and cash expectations for the year as a whole. In a statement, it said the growth meant it was progressively recovering the one-off hits and currency translation impact it suffered in the first half of the year. National Express said passenger numbers and revenue are up in all its divisions so far this year. Revenue was up 4% on the year in the three months to end-September in its UK bus unit and 3% in the year to date.
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Al Noor Hospitals Group said its revenue increased in the third quarter in line with its expectations and said it is on track to meet forecasts for the full year. The FTSE 250 company, which provides healthcare services in Abu Dhabi, said revenue in the three months to September 30 was up 20.5% to USD101.2 million from USD84 million a year earlier. Al Noor said the rise was in line with its expectations and said its earnings before income, taxation, depreciation and amortisation margins were stable in the period.
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Countrywide said its earnings and revenue both increased in the third quarter, though it said it was seeing an impact from the slowdown in the London market and sounded a note of caution on the possible challenges it may face in 2015. The FTSE 250 estate agency said revenue in the third quarter to the end of September was GBP188.4 million, up 22% year-on-year, with earnings before income, taxation, depreciation and amortisation at GBP40.2 million, up 38%.
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RPS Group said it will again increase its full-year dividend by 15%, after saying it is on track to report good growth for 2014 on a constant currency basis, while investments in its international platform are providing "significant" growth opportunities. In a statement, the energy and environmental consultancy did caution that currency volatility and the uncertainty affecting the oil and gas sector make it difficult to predict the full-year result with precision, but trading so far in 2014 suggests it is on track to achieve market expectations.
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COMPANIES - LONDON MAIN MARKET AND AIM
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National Australia Bank is considering float its Clydesdale and Yorkshire banking businesses as it looks to speed up its exit from the UK in order to focus on its Australian and New Zealand markets, the Financial Times reported. The bank said it will apply "greater urgency" to dealing with low-returning assets as it saw a 9.8% fall in earnings for the year to the end of September, the FT said.
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COMPANIES - INTERNATIONAL
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German conglomerate Bayer reported that its third-quarter net income advanced by 12.7% to EUR826 million from last year's EUR733 million euros. Quarterly sales rose 5.6% to EUR10.187 billion from last year's EUR9.643 billion.
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German aviation group Deutsche Lufthansa recorded higher profit for the nine-month period and confirmed its full-year operating profit projection of EUR1 billion. For the period from January to September 2014, the Group posted an operating profit of EUR849 million, higher than last year's EUR663 million.
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South Korean conglomerate Samsung Electronics reported a profit for the third quarter that nearly halved from last year, reflecting the continued drop in demand for its flagship Galaxy smartphones and tablets amid stiff competition, partially offset by the improving performance in the chip business. Sales for the quarter came in slightly lower, while operating profit came in marginally higher than Samsung's guidance released earlier in the month.
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Baidu Inc reported net income for the third quarter of RMB3.88 billion or RMB11.00 per ADS, compared to RMB3.05 billion or RMB8.63 per ADS for the year-ago quarter. Total revenue for the third quarter rose 52% to RMB13.52 billion from RMB8.89 billion a year ago.
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Kraft Foods Group on Wednesday reported a decline in profit for the third quarter, hurt by higher commodity costs that offset a marginal climb in sales, with weak operating margins pronounced at the cheese, and meals and desserts segments. Kraft, which has been grappling with increased commodity costs, had raised prices, but that was not enough to arrest the slide in profit for the quarter.
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Life insurer MetLife on Wednesday reported a surge in third-quarter profit, led mainly by derivative gains and lower catastrophe losses, as both earnings and revenue topped Wall Street estimates.
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Thursday's Scheduled AGMs/EGMs

Ashmore Group
Genesis Emerging Markets Fund
Alumasc Group
Clinigen Group
Pacific Horizon
Redde
Dignity
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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