LONDON MARKET OPEN: GVC Leads FTSE 100 Risers, TalkTalk Tops FTSE 250

(Alliance News) - Momentum from the US overnight flowed through to London as the FTSE 100 opened ...

Alliance News 8 October, 2020 | 8:45AM
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(Alliance News) - Momentum from the US overnight flowed through to London as the FTSE 100 opened higher on Thursday.

Leading the blue-chip gainers was GVC, after the betting firm raised guidance, while TalkTalk Telecom surged 17% in the FTSE 250 after receiving a preliminary takeover proposal worth GBP1.1 billion.

The FTSE 100 index was up 14.12 points, or 0.2%, at 5,960.37 early Thursday. The mid-cap FTSE 250 index was up 89.68 points, or 0.5%, at 17,891.43. The AIM All-Share index was 0.4% higher at 977.76.

The Cboe UK 100 index was up 0.1% at 592.88. The Cboe 250 was up 0.5% at 15,175.85, and the Cboe Small Companies down 0.1% at 9,463.31.

In mainland Europe, the CAC 40 in Paris was up 0.6% while the DAX 30 in Frankfurt was 0.8% higher early Thursday.

"Wall Street finished sharply higher lifted by fiscal stimulus hopes. The upbeat mood spilled over in Asia and is helping Europe towards a positive start this morning," said City Index's Fiona Cincotta.

"Stocks fells sharply earlier in the week following Trump's tweet that he was abruptly pulling the plug on bipartisan fiscal stimulus talks," Cincotta said. "However, after some back-pedalling it now looks as though smaller more targeted standalone bills could be agreed. The overriding expectation by the markets at this point is that some form of stimulus is coming, sooner rather than later."

US President Donald Trump has partially reversed his move to end talks on a fiscal package and called for stimulus payments, among other targeted initiatives.

Trump on Tuesday said he was directing his staff to end the talks, accusing House Speaker Nancy Pelosi of negotiating in bad faith and saying the measure would be taken up after November's presidential election.

However, on Tuesday night, Trump called for Congress to "immediately" pass legislation to extend aid for airline workers and small businesses. Trump also said he would back another round of USD1,200 stimulus payments for workers.

White House economic advisor Larry Kudlow told CNBC Wednesday that Trump backed targeted measures, adding, "I don't think the recovery depends on the massive assistance package."

In the US on Wednesday, Wall Street rallied, with the Dow Jones Industrial Average ending up 1.9%, the S&P 500 up 1.7% and Nasdaq Composite closing 1.9% higher. This followed the Dow falling 1.3% on Tuesday, the S&P 500 sliding 1.4% and the Nasdaq shedding 1.6%.

Following on from the US, London got off to a positive start on Thursday. At the top of the blue-chip FTSE 100 in opening trade was GVC Holdings, shares rising 8.5% after the betting firm upped guidance.

Third quarter net gaming revenue was up 12%, with online gaming revenue up 26%. Online gaming volumes remain ahead of pre-pandemic levels, GVC noted.

It has also seen continued momentum in the US, with full-year net revenue for the territory now expected to be ahead of expectations at USD150 million to USD160 million.

Full-year group earnings before interest, tax, depreciation and amortisation is seen in the range of GBP770 million to GBP790 million, around GBP50 million ahead of previous guidance.

"While the risk of further restrictions as a result of Covid-19 mean that we remain cautious on the short-term outlook, in the longer term we are confident of being able to continue delivering sustainable growth for all our stakeholders," said Chief Executive Shay Segev.

The company added that it has agreed to acquire online gambling operator Bet.pt in Portugal. The transaction is in line with GVC's strategy of expanding into new markets that are either regulated or regulating.

Imperial Brands rose 3.0% as it said its net revenue performance is slightly ahead of previous guidance.

The tobacco business has continued to perform well despite an uncertain and disrupted trading environment, Imperial Brands said. The company has seen some Covid-related changes in customer behavior with increased overall demand versus its expectations.

Group net revenue is "slightly ahead" of the guidance provided at its half-year results, and is expected to be broadly flat year-on-year at constant currency. However, Imperial noted that it has taken Covid-19 costs and expects constant currency earnings per share will be down by around 6%, in line with current market expectations.

Hargreaves Lansdown fell 3.8% despite recording revenue, client and asset growth in the first quarter.

The fund supermarket recorded net new business of GBP800 million in the three months to September and net new clients of 31,000. Assets under administration totalled GBP106.9 billion at the end of September, up 3% since June 30.

The net new business result was "pleasing", the FTSE 100 constituent said, given weakening investor sentiment in the period stemming from Covid-19 and Brexit uncertainty.

Revenue for the period was GBP143.7 million, up 12% on last year.

"Today we report a good start to our financial year, with growth in clients, assets and revenue. These results are against the ongoing backdrop of market uncertainty and highlight the resilience of our business model and client proposition," said Chief Executive Chris Hill.

FTSE 250-listed TalkTalk Telecom rose 17% to 97.86 pence after receiving a preliminary GBP1.1 billion takeover proposal from Toscafund Asset Management.

Toscafund is offering 97p per share cash, a 16% premium to Wednesday's close of 83.3p.

"The board has considered the terms of the proposal and has agreed to progress the proposal further with TAM along with taking advice from the company's advisers," said TalkTalk, adding that there can be no certainty a firm offer will be made.

In Asia on Thursday, the Japanese Nikkei 225 index ended up 1.0%. Financial markets in China are closed to commemorate 'Golden Week', though the Hang Seng index in Hong Kong was down 0.3% in late trade on Thursday.

Against the yen, the dollar was quoted at JPY105.95 versus JPY105.96.

Sterling was quoted at USD1.2954 early Thursday, higher than USD1.2919 at the London equities close on Wednesday. The euro traded at USD1.1771, firm on USD1.1766 late Wednesday.

Gold was quoted at USD1,892.20 an ounce early Thursday, slightly higher USD1,887.20 on Wednesday. Brent oil was trading at USD42.35 a barrel Thursday, rising from USD41.62 late Wednesday.

In the economic calendar on Thursday, there is Irish CPI at 1100 BST and US unemployment insurance weekly claims report at 1330 BST.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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