Leading UK shares edged higher on what is expected to be a relatively quiet day, given that US markets are closed for the Thanksgiving holiday, with ex-dividend stocks acting as a brake on larger gains.
At 9.00am, the benchmark FTSE 100 was 7.5 points or 0.1% at 7,294.13 despite worries about further lockdowns in Europe, particularly Germany, and the continuing pricing pressures which are likely to prompt further central bank action.
Minutes from the last US Federal Reserve meeting, when the central bank said it would start tapering its bond purchases by $15 billion, have been received fairly calmly after the release yesterday.
Asian tech stocks rose on Thursday, following their US peers, though broader gains were capped by the strength of the dollar as investors bet on interest rates rising more quickly in the US than other major economies.
European stocks advanced with the Euro Stoxx 50 up around 0.5% at 4,296.43, possibly indicating a rebound after a week when rising Covid cases across Europe have weighed on market sentiment.
Japan’s Nikkei 225 rose 0.8%, helped by gains in tech stocks such as Sony, which rose 1.5%, while Hong Kong’s bruised tech index snapped six sessions of losses to gain 0.85%.
Heavyweight Alibaba, up 2.7%, was among the leaders.
Oil prices rose slightly after a turbulent few days in which the US said it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain to try to cool prices after calls to OPEC+ to pump more when needed. How effective that programme will be remains the sticking point for investors, hence the firmer oil pricing on Thursday.
Brent crude nudged up to $82.26 a barrel, while spot gold edged 0.17% higher to $1,790.80 an ounce.
STOCKS MOVING ON THE MARKET
Construction kit supplier Ashtead (AHT) topped the FTSE 100 in early deals, up around 2% at £62.78 alongside copper miner Antofagasta (ANTO) at £14.935 but the loser board was chock full of big income payers going ex-dividend, when investors lose the right to the next payout.
Vodafone (VOD) led the way, off 4% at 113.1p, with Imperial Brands (IMB), British Land (BLND) and Land Securities (LAND) also sharply lower.
Bars and restaurants group Mitchells & Butlers (MAB) lost much of its opening momentum as investors digested like-for-like sales in recent months that exceeded pre-pandemic levels but warned that rising costs, supply chain issues and labour shortages since Brexit will ‘inevitably’ have an impact on its performance in the current year.
Shares in the company, which had rallied more than 5% early on, were trading around 1.5% higher to 240.6p at 9.30am.
The big movers among the mid-caps were Hochschild Mining (HOC), which topped the FTSE 250 leader board, and Vivo Energy (VVO).
Hochschild rallied 25% to 153p after more dovish comments from Peruvian authorities. The company’s flagship Inmaculada mine and another one in the Ayacucho region of Peru will continue to operate under current frameworks, the company confirmed a day after the South American country allowed miners to seek extensions.
Last week, Peru planned to rule out timeline extensions for mines in Ayacucho on environmental concerns and said they would instead close-down in the near future.
Vivo Energy surged 20% to 133.6p after news that commodities trader Vitol will buy the company in a deal valued at roughly $2.3 billion. Vitol, already the owner of a 36% stake in Vivo, has offered shareholders of Vivo $1.79 in cash for each share they hold, and $0.06 as an interim plus special dividend, equating to a combined 189p or thereabouts at current exchange rates.
Global drinks seller Diageo (DGE) rose nearly 1% to £39.025 after peer Remy Cointreau raised its full-year profit outlook after reporting a stronger-than-expected 104.5% organic jump in first-half operating profit. This was driven by strong demand for its premium cognac in China, the US and Europe.
ELSEWHERE ON THE MARKET
Logistics group DX (DX.:AIM) plunged 41% to 17.68p after saying it would delay the release of its annual report that could result in its shares suspended after discovering a corporate governance inquiry relating to an internal investigation commenced during the financial year ended 3 July 2021.
‘The inquiry has yet to be concluded, and the process will delay the completion of the audit, but will be expedited as quickly as possible,’ the company said.
Infrastructure group Hill & Smith (HILS) reported a rise in revenue in the four month period to 31 October 2021 as price increases helped offset rising costs amid supply chain headwinds.
Trading during the period has been robust, with revenue of £237.1 million, 4% ahead of last year on an organic constant currency basis, but investors took fright, sending the stock down nearly 5% to £17.77.
The company said its operating companies implemented price increases to help ‘offset input cost inflation, with steel being the most impacted category for the group.’
Energy services provider Good Energy (GOOD:AIM) is to sell its 47.5MW renewable asset portfolio as part of an ongoing strategic shift. Proceeds from the transaction would be used to accelerate and support ‘previously identified strategic growth opportunities,’ the company said.
The is sale is expected to be completed during Q1 2022. The share price fell 2.5% to 278p.
Software and services company Gresham Technologies (GHT) upgraded its outlook on profitability following ‘strong’ performance and said it had won a contract extension from an unnamed bank.
The shares rose 4% to 177.5p after the company said it now expects full-year group revenues to exceed current market expectations, with both earnings before interest, taxes, depreciation and amortisation, or EBITDA, and cash EBITDA also expected to be ahead of current market expectations.
