A strong close on Wall Street, led by technology shares, led into a positive open for European markets on Thursday, amid a risk-on investor mood as the banking crisis appeared to have been contained.
The FTSE 100 index opened up 36.08 points, 0.5%, at 7,600.35. The FTSE 250 was up 178.77 points, 1.0%, at 18,811.58, and the AIM All-Share was up 4.54 points, 0.6%, at 800.74.
The Cboe UK 100 was up 0.6% at 759.77, and the Cboe UK 250 rose 1.1% to 16,420.11. The Cboe Small Companies was marginally lower at 13,247.57.
In European equities, the CAC 40 in Paris was up 0.9%, while the DAX 40 in Frankfurt was up 1.1%.
Stocks had rallied in New York overnight. The Dow Jones Industrial Average closed up 1.0%, the S&P 500 up 1.4%, and the tech-heavy Nasdaq Composite up 1.8%.
‘US equities jumped the most in nearly two weeks on Wednesday, amid a sharp rally in technology stocks, helped by an upbeat forecast from memory-chip maker Micron,’ said Nedbank.
Micron Technology added 7.2% after saying that inventory issues were improving.
The dollar was slightly weaker against major currencies.
Sterling was quoted at $1.2329 early Thursday in London, higher than $1.2326 at the London equities close on Wednesday. The euro traded at $1.0845, higher than $1.0834. Against the yen, the dollar was quoted at JP¥132.38, down slightly versus JP¥132.51.
In early local economics news, the Confederation for British Industry said its latest growth report showed ‘signs of green shoots’ amid projections that UK industry will return to growth in the next quarter.
However, the fresh CBI data showed that activity across the UK private sector contracted by around 4% over the three months to March. It is the eight consecutive quarter of decline but the mildest drop since July 2022.
The drop was largely driven by weakness in the service sector, amid an 11% drop in consumer services volumes, according to the survey.
In the FTSE 100, there was some early weakness in insurance stocks, with Aviva and Phoenix Group down 4.0%. Both stocks went ex-dividend on Thursday.
Other major ex-dividend stocks were abrdn, down 2.1%, InterContinental Hotels, up 0.2%, Mondi, down 2.0%, MoneySupermarket.com, down 3.1%, Smith & Nephew, down 1.2%, and Taylor Wimpey, down 2.3%.
SSE rose 2.5% as it upgraded its guidance for the financial year that ends on Friday. It now expects adjusted earnings per share of over 160p, compared to previous guidance of over 150p.
‘This reflects the strength and stability of SSE’s balanced mix of regulated and market-facing businesses and the continued narrowing of the range of probable financial outcomes for the period,’ the electricity utility explained.
SSE also said it plans to delivery record investment during the year, in excess of £2.5 billion, as part of its ’net zero acceleration programme’.
Miners also were lifting London’s large cap index, with Endeavour Mining, Anglo American and Fresnillo up 1.7%, 1.3% and 1.4%, respectively.
Brent oil was trading at $78.23 a barrel early Thursday, slightly lower than $78.37 late Wednesday. Gold fetched $1,968.52 an ounce, up from $1,967.03.
Mining stocks had a strong day in Australia as well. The S&P/ASX 200 in Sydney closed up 1.0%, with BHP adding 2.4% and Rio Tinto rising 1.8%.
Elsewhere in Asia on Thursday, investor sentiment was more mixed. The Nikkei 225 index in Tokyo closed down 0.4%. In China, the Shanghai Composite closed up 0.7%, while the Hang Seng index in Hong Kong was up 0.3%.
In the FTSE 250, it was a bad day for energy stocks.
Drax Group plunged 11%.
The Yorkshire, England-based power generator’s biomass carbon-capture and storage project was rejected by the UK’s Department for Energy Security & Net Zero, Bloomberg reported.
Ithaca Energy fell 2.7%
The North Sea oil and gas operator downgraded 2023 production guidance to 68,000 to 74,000 barrels of oil equivalent per day from a previous range of 72,000 to 80,000, due to lower first quarter volumes, non-operated portfolio delivery, and the hit from the UK energy profit levy on capital programmes.
This came alongside largely positive results in 2022, as annual revenue jumped to $2.60 billion from $1.43 billion a year before. Pretax profit multiplied to $2.24 billion from $763.1 million, and to $1.03 billion after tax from $426.0 million.
Ithaca said it achieved record production of 71,400 barrels of oil equivalent per day, which was up 26% from 2021.
It was a better day for Moonpig, which was recently booted out of the FTSE 250 to make way for Ithaca.
The online greeting cards company jumped 14%, after reporting its ‘largest ever week of sales’ in the UK leading up to Mother’s Day.
It backed revenue expectations for the year ending April 30 to be £320 million, and also left expectations for annual adjusted earnings before interest, tax, depreciation and amortisation unchanged. It expects revenue to grow in financial 2024, with a weighting towards the second half.
On AIM, Bowleven dropped 17%.
The Africa-focused oil and gas explorer and producer said it expects to raise additional equity capital this year to fund its operations. It warned, dependent on timings of certain transactions related to Etinde, it could use up all its existing cash resources by the end of the year without further capital.
‘We remain on the verge of what we believe to be a major turning point in the business with the expected upcoming change of the Etinde operatorship once Perenco secures regulatory approval,’ said CEO Eli Chahin.
Still to come in Thursday’s economic calendar, there is the final iteration of US gross domestic product data for the final quarter of 2022 at 1330 BST.
Shortly before, there will be a flash German inflation reading for March at 1300 BST.
Inflation had remained unchanged at 8.7% in February, with the market having expected it to cool to 8.5%. Market consensus, as cited by FXStreet, is expecting a reading of 7.3% this month. On a EU harmonised basis, inflation is expected to cool to 7.5% from 9.3%.
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