(Alliance News) - Soothing words from China about its trade conflict with the US helped markets rise on Thursday, with the FTSE 100 racking up over 80 points despite shares in Micro Focus International diving on a guidance cut.
The FTSE 100 was up 83.73 points, or 1.2%, at 7,198.44. The FTSE 250 was 48.88 points higher, or 0.3%, at 19,251.87 and the AIM All-Share was up 0.1% at 869.80.
The Cboe UK 100 index was up 1.0% at 12,202.12. The Cboe UK 250 was up 0.1% at 17,134.75 and the Cboe UK Small Companies was flat at 10,856.12.
In mainland Europe in the afternoon, the CAC 40 in Paris was up 1.4% while the DAX 30 in Frankfurt was up 1.2%.
Stocks in Europe were higher, with Wall Street also on course for a bright open, after Beijing hinted it may break the cycle of retaliation in the trade war with the US.
Last week China and the US exchanged the latest blows in the year-long trade dispute, with Beijing announcing it would hit USD75 billion worth of US goods. US President Donald Trump lashed out immediately in return by increasing existing and planned tariffs on a total of USD550 billion in Chinese products.
"China has sufficient means to take counter-measures, but under the current situation, we believe that the issue that should really be discussed is cancelling further tariffs on USD550 billion of Chinese goods, and preventing the trade war from continuing to escalate," said commerce ministry spokesman Gao Feng on Thursday.
In earlier rounds of escalation, Beijing had pledged to hit back at any US tariff hike.
"The escalation of the trade war is not beneficial to China, and it is not beneficial to the US," said Gao. He stopped short of confirming face-to-face trade talks next month, saying "the two sides are discussing this issue".
In New York, both the Dow Jones and the S&P 500 are called up 0.9% while the Nasdaq Composite is seen 1.1% higher.
"The largely hopeful tones of the update from China has lifted market sentiment, and that sparked buying this morning. US-China relations have been volatile recently, but for now there is a sense that things are heading in the right direction, and that has coaxed some traders back into the market," said David Madden at CMC Markets.
Thursday's positive trade sentiment was helping the FTSE 100 to overcome steep losses for constituent Micro Focus International, which tumbled 24% in the wake of a guidance downgrade.
The software company blamed weak sales execution and delays in customer contracts as a result of a deteriorating market environment for not meeting its previous constant-currency revenue guidance of a 4% to 6% year-on-year drop for the financial year to October 31. It now expects revenue to fall by around 6% to 8% year-on-year.
Against this backdrop, Micro Focus said it has decided to accelerate a strategic review of its operations. The review will focus on a range of strategic, operational and financial alternatives available to the company.
Russ Mould, investment director at AJ Bell, said the words 'strategic review' are a "dreaded phrase".
"This normally spells a long period of uncertainty for staff and shareholders as they wait to find out the new strategic direction of the business. One could even see Micro Focus put itself up for sale and private equity companies could be interested," Mould said.
Another rough tumble on the London Stock Exchange on Thursday was suffered by Amigo Holdings, with the loan provider diving 41% as it also cut its outlook.
The lender said it is being "proactive and pragmatic" in an "evolving regulatory and economic environment", and, as a result, will prioritise new customer lending over existing customers. This is expected to hit Amigo's repeat lending growth, due to its "enhanced" credit policy.
Amigo's net loan book growth is now expected to be "broadly flat" in financial 2020. The company had previously guided to mid-teens growth.
The company's net loan book at March 31, the end of Amigo's financial year, stood at GBP707.6 million, and in the three months to June 30, the company's loan book grew 14% to GBP728.4 million.
Oilfield services firm Hunting delivered a more warmly-received set of results, the stock trading 4.6% higher at midday.
Hunting's profit rose in the first half of 2019 as the company's Asia Pacific, US, and Europe the Middle East & Africa segments all posted growth.
Hunting recorded USD40.1 million pretax profit for the six months to June 30, 5.5% above its USD38.0 million profit a year before, as revenue rose 15% to USD508.9 million from USD442.8 million.
Another mid-cap riser was Homeserve, up 3.7% after UBS raised the home emergency repairs business to Buy from Neutral.
Smiths Group in the FTSE 100 also got a boost from a ratings upgrade, trading 4.0% higher after Goldman Sachs lifted the security scanner and medical devices maker to Buy from Neutral.
The pound traded just below the USD1.22 mark amid the fallout from UK Prime Minister Boris Johnson's decision to prorogue parliament.
Sterling was quoted at USD1.2199 Thursday midday, down from USD1.2233 late Wednesday.
More than one million people have signed a petition calling on UK Prime Minister Boris Johnson not to suspend Parliament amid growing anger over the decision.
In the wake of the decision, Ruth Davidson on Thursday quit as Scottish Conservative leader "with a heavy heart", citing personal reasons as well as the "conflict" she felt over Brexit. Davidson, who had campaigned for Remain in the 2016 referendum, has led the Tories in Holyrood since 2011.
To come in Thursday's economic calendar, German inflation is at 1300 BST followed by US GDP at 1330 BST.
The German inflation reading comes after figures showed the country's seasonally-adjusted unemployment rate was stable in August.
The unemployment rate came in at 5.0% in August, unchanged from July, with the seasonally-adjusted number of those not in work rising by 4,000.
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