LONDON (Alliance News) - Share prices were continuing to enjoy their Draghi boost at the open Friday, after the European Central Bank president on Thursday strongly hinted that further economic stimulus measures are coming in December.
Building supplies firm Travis Perkins led FTSE 100 gainers, up 2.2%, having lost 6.0% on Thursday after saying its 2015 earnings are set to come in at the low end of market expectations. The stock was benefiting from an upgrade by Citigroup to Buy early Friday.
In the FTSE 250, construction services firm Carillion also was benefiting from a broker upgrade, gaining 4.6% after being raised to Overweight by JPMorgan. Cable & Wireless was up 5.9% after confirming a takeover approach by Libery Global late Thursday.
At the other end of the mid-cap index, TalkTalk Telecom shares were down 5.5% after suffering a data breach.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 6,405.59
FTSE 250: up 0.2% at 17,075.72
AIM ALL-SHARE: up 0.1% at 745.66
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Hang Seng: up 1.3% at 23,150.36
Nikkei 225: closed up 2.1% at 18,825.30
DJIA: closed up 1.9% at 17,489.16
S&P 500: closed up 1.7% at 2,052.51
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GBP: down slightly at USD1.5396 (USD1.5419)
EUR: down at USD1.1115 (USD1.1156)
GOLD: up at USD1,173.60 per ounce (USD1,167)
OIL (Brent): up at USD48.60 a barrel (USD47.97)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)
08:30 Germany Markit Services, Manufacturing and Composite PMI preliminary
09:00 Italy Industrial Orders and Sales
09:00 EU Markit Services, Manufacturing and Composite PMI preliminary
10:00 Italy Retail Sales
11:00 Italy Wage Inflation
13:30 Canada Consumer Price Index
14:45 US Markit Manufacturing PMI preliminary
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European Central Bank chief Mario Draghi signalled on Thursday the ECB plans to boost its EUR1.1 trillion monetary stimulus plan in December to head off the threat to the eurozone posed by deflation and slowing emerging economies. "The degree of monetary accommodation will need to be re-examined at our December meeting," Draghi told a press conference after the ECB's governing council left interest rates at an historic low of 0.05%. Draghi said the ECB's EUR60 billion bond-buying programme, or quantitative easing scheme, could be extended beyond its current cut-off date of September 2016 "if necessary". "We are ready to act if needed," he said. "We are open to a whole menu of monetary policy instruments." Driving the bank's deposit rate deeper into negative territory to help force more money into the eurozone's financial system was one of the methods under consideration, Draghi said.
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Parliament on Thursday approved a principle of "English votes for English laws", meaning Scottish members could no longer have a final vote on laws solely for England or Wales. The Commons approved the change by a majority of 312 to 270, despite strong objections from some members. It adds an additional stage for parliamentary bills, in which a committee of solely English members, or English and Welsh members if appropriate, can examine legislation and have the right of veto before the whole parliament looks at it.
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British households perceive that the value of their home rose in October, though the rate of increase was slower than from the previous month, a survey from Knight Frank and Markit Economic showed. The house price sentiment index dropped to 58.1 in October from 59.3 in the previous month. However, a reading above 50 signals a rise in house prices.
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A leading economic index for China spiked in September, the latest survey from Conference Board revealed, climbing 1.6%. That follows the 1.0% increase in August and the 0.9% gain in July. The coincident index skidded 1.2% after rising 0.7% in August and 1.0% in July. "China's economic situation, as measured by the coincident index, slowed substantially in September, due to very weak consumer demand and a struggling industrial sector," said Andrew Polk, resident economist at the Conference Board China Center in Beijing.
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The manufacturing sector in Japan continued to expand in October, and at an accelerated pace, the latest survey from Nikkei revealed on Friday with a manufacturing PMI score of 52.5. That crushed expectations for a reading of 50.5, and it's up sharply from 51.0 in September to reach a year-and-a-half high.
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The leading index for Japan, which measures the future economic activity, dropped as initially estimated in August to the lowest level in fifteen months, final data from the Cabinet Office showed. The leading index dropped to 103.5 in August, confirming the flash data, from 105.0 in the previous month. The latest reading was the weakest since May 2014, when it marked the same 103.5.
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US congressman Paul Ryan said he would be a candidate for speaker of the House of Representatives, after he secured strong support from all factions of conservative opposition Republicans, who hold a majority in the lower chamber. The budget committee chairman who represents a rural district in the Midwestern state of Wisconsin is now poised to be elected next week to succeed Speaker John Boehner. Ryan, 45, who was the Republican vice presidential nominee in 2012.
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US President Barack Obama blocked a USD612 billion defence budget with a rare veto, saying the measure from Congress falls "woefully short" of what the military needs for the next year. He objected to a provision in the legislation impedes the closure of the US military prison at Guantanamo Bay, Cuba, and he said it would prevent a wide range of reforms needed to modernize the military for 21st-century threats. The budget passed the Senate and House of Representatives by large majorities.
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Airstrikes by a US-led coalition destroyed infrastructure in an oil field under the control of Islamic State forces in eastern Syria, a monitoring group said. "The strikes were carried on the al-Omar field near the city of Deir al-Zour. Our information is that it destroyed pipelines and oil storage tanks," Rami Abdel Rahman, head of the Britain-based Syrian Observatory for Human Rights, told dpa.
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BROKER RATING CHANGES
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TRADERS: JEFFERIES RAISES MAN GROUP TO 'BUY' ('HOLD')
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BERENBERG INITIATES TELECOM PLUS WITH 'BUY' - TARGET 1,400 PENCE
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BERENBERG INITIATES MOTHERCARE WITH 'HOLD' - TARGET 250 PENCE
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BERENBERG INITIATES AA WITH 'BUY' - TARGET 350 PENCE
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TRADERS: JPMORGAN RAISES CARILLION TO 'OVERWEIGHT' ('NEUTRAL')
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TRADERS: CITIGROUP RAISES TRAVIS PERKINS TO 'BUY' ('NEUTRAL')
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REPEAT: BERENBERG INITIATES CONNECT GROUP WITH 'BUY' - TARGET 200 PENCE
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COMPANIES - FTSE 100
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Three UK-listed banks were among those hit by a USD924.0 million fine for foreign-exchange rigging on Thursday, Sky News reported, following a settlement agreed in the US. Barclays, HSBC Holdings and The Royal Bank of Scotland Group are understood to have agreed to pay the fines following a US federal court hearing. Barclays will pay USD384.0 million, HSBC will pay USD285.0 million, and RBS will pay USD255.0 million, according to people familiar with the settlements.
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COMPANIES - FTSE 250
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TalkTalk Telecom Group confirmed that a criminal investigation has been launched by the Metropolitan Police's Cyber Crime Unit following a "significant and sustained" cyber attack on the company's website on Wednesday. The telecommunications company said the investigation by the Met is ongoing but said that the data compromised in the hack may have included names, addresses, dates of birth, phone numbers and email addresses. More importantly, it said the details at risk also included TalkTalk account information and credit card or bank details of its customers. TalkTalk has around 4.0 million subscribers, all of which have been informed about the breach as a "precaution".
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Cable and Wireless Communications late Thursday confirmed it is in talks with US cable company Liberty Global regarding a possible shares and cash takeover offer for C&W. The telecommunications company, which has operations in the Caribbean and Central America, said that shareholders are advised to take no action, and added there can be no certainty any firm offer will be made, or the terms on which any offer may be made. Under UK takeover code Liberty Global has until November 19 to either announce a firm intention to make an offer, or walk away.
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Data centre operator Telecity Group said the European Commission has begun a period of market testing, as part of commitments it has proposed to get approval for its GBP2.35 billion cash and share takeover by US peer Equinix. Telecity agreed the takeover from Equinix in May, terminating its previous deal to acquire Dutch data centre company Interxion Holding. As a result of this testing, the European Commission's Phase 1 review timetable is automatically extended by ten working days to November 13.
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William Hill reported a drop in net revenue and operating profit in the third quarter of 2015 and said it now expects full-year operating profit to be around the bottom of the analyst consensus range. The bookmaker said net revenue in the 13 weeks ended September 30 fell 9% on the same period the year before, as operating profit dropped 39%. As a result, the company now expects operating profit for the full year to be around the lower end of the GBP290.9 million to GBP312.1 million analyst consensus range. That would be down from the GBP372.2 million operating profit that William Hill achieved in 2014.
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Workspace Group said it has exchanged contracts for two acquisitions totalling GBP24.4 million. The real estate investment trust said it is buying Alexandra House in Wood Green for GBP14.0 million and Cannon Wharf in Surrey Quays for GBP10.4 million.
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Dechra Pharmaceuticals said it saw revenue rise 13% in its first quarter, driven by strong momentum across all of its business units, phasing of sales ahead of regional price increases, and contributions from its new subsidiaries. The veterinary pharmaceutical company's revenue was held back by the weaker euro and stronger dollar, however, and at constant currency revenue would have risen 21% in the quarter to end-September.
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Landscape products company Marshalls said its expectations for the full-year remain unchanged. In a short statement ahead of its analyst and investor day, being held in Leamington Spa on Friday, the company said its expectations for the year are consistent with those outlined at its interim results in August. In those results, Marshalls said trading conditions continue to be strong in its key markets and said that if this continued into the second half, its results for the year should come in ahead of its original expectations.
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COMPANIES - INTERNATIONAL
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Alphabet, the newly formed parent company of Internet giant Google, beat Wall Street expectations in its third quarter results. The performance reflects the financial results of Google "as it existed prior to the reorganization," according to the Alphabet statement. From July to September, the company's profits rose from USD2.74 billion during the same period a year ago to USD3.98 billion, Alphabet reported. Revenue grew 13% to USD18.7 billion. Advertising revenue, the company's biggest source of income, climbed 13% to USD16.78 billion. Analysts had predicted weaker numbers, and Alphabet's share price rose 10% in after-hours trading.
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Software giant Microsoft announced a profit for its fiscal first quarter that came in well above Wall Street's expectations. The better-than-expected performance came despite a significant drag from the negative impact of currency exchange rates. Revenue dipped from last year, hurt by a drop in its personal computing category. The company saw a particularly sharp decline in phone-related revenue, though it said this was largely the result of implementing a new strategy for the segment. Even with the top-line slide, the company's adjusted revenue figure came in slightly above analysts' predictions.
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Shares of Amazon rose 10% in after-hours trade after the online retailer reported a surprise third-quarter profit that beat Wall Street estimates by a huge margin, largely driven by a 23% jump in revenues. Seattle, Washington-based Amazon reported a third-quarter profit of USD79 million or USD0.17 per share, compared to last year's loss of USD437 million or USD0.95 per share. On average, 35 analysts polled by Thomson Reuters expected a loss of USD0.13 per share for the quarter. Amazon's sales for the third quarter grew 23% to USD25.36 billion from USD20.58 billion a year ago.
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AT&T reported a slight drop in profit for the third quarter, hurt largely by higher operating costs that offset a growth in revenue. However, earnings for the quarter trumped Wall Street estimates, while revenues fell short of expectations. The Dallas, Texas-based telecom giant's third-quarter profit dropped to USD2.99 billion or USD0.50 per share from USD3.13 billion or USD0.60 per share a year ago.
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Friday's Scheduled AGMs/EGMs
Hargreaves Lansdown
Kromek
Dechra Pharmceuticals
Treveria
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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