(Alliance News) - The FTSE 100 edged into the green by midday on Tuesday, rescued by well-received trading updates from major constituents Vodafone, Land Securities and Diageo.
London's internationally exposed index advanced even as the pound maintained morning gains on the back of a strong UK labour market update.
The FTSE 100 was up 14.15 points, or 0.2%, at 7,366.01 midday Tuesday. The mid-cap FTSE 250 index was down 27.00 points, or 0.1%, at 23,594.58. The AIM All-Share index was down 4.25 points, or 0.3%, at 1,250.53.
The Cboe UK 100 index was up 0.2% at 729.63. The Cboe 250 was down 0.1% at 21,053.99, and the Cboe Small Companies flat at 15,654.96.
In mainland Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt were both up 0.4% on Tuesday.
After a wobbly start, the FTSE 100 was pushing higher, led by Vodafone and Land Securities.
"Vodafone has rallied on news that its earnings outlook is improving, while a return to profit for Land Securities has pushed this share price back to its 2021 highs," remarked Chris Beauchamp, chief market analyst at IG.
Vodafone topped the FTSE 100, shares up 5.9%, after the telecommunications firm tightened guidance.
Vodafone narrowed its full-year adjusted Ebitda after leases guidance to EUR15.2 billion to EUR15.4 billion, the top end of its prior range of EUR15.0 billion to EUR15.4 billion. Adjusted free cash flow guidance was upgraded to at least EUR5.3 billion, from at least EUR5.2 billion.
Landsec shares rallied 5.0% on a swing to profit. The property developer and investor improved to a pretax profit of GBP275 million from a loss of GBP835 million a year ago. The company increased its dividend by 29% to 15.5p per share from 12.0p paid a year earlier.
While there remain risks ahead, the firm said its outlook is one of "cautious optimism".
Diageo rose 2.4% after outlining medium-term growth guidance as it looks to lift its market share by the end of the decade.
The brewer and distiller, which also owns the Guinness and Smirnoff brands, eyes annual organic net sales growth in the range of 5% and 7% between the 2023 and 2025 financial years. For the year ended June 30, Diageo's net sales rose 8.3% on a reported basis to GBP12.73 billion. Organically, they jumped 16%.
In the FTSE 250, Restaurant Group shares soared 18% after the Wagamama dining chain owner raised full-year earnings expectations after strong trading in recent weeks. It noted a "minor improvement" in UK airport passenger volumes, leading to a partial recovery in sales run rates for its Concessions business.
As a result of recent robust trading, the Wagamama noodle chain owner now expects full-year adjusted Ebitda in a range of GBP73 million to GBP79 million.
HomeServe rose 4.8%. The home repairs and improvements firm raised its interim dividend as it reported an 86% jump in profit in the first half of its current financial year.
HomeServe posted pretax profit of GBP18.9 million in the six months that ended September 30, up from GBP10.1 million a year before. Revenue rose by 14% to GBP610.5 million from GBP536.7 million. The Birmingham-based company increased its interim payout by 10% to 6.8 pence from 6.2p paid a year before.
Network International advanced 4.6% after Morgan Stanley resumed the stock with an Overweight rating.
At the bottom of the mid-caps was Genuit, down 4.9%. The water, climate and ventilation systems manufacturer said it expects profit for 2021 to meet consensus expectations following a strong start, but warned of ongoing cost inflation and continued supply chain issues.
For 2021 as a whole, Genuit expects earnings before interest and tax - or operating profit - to meet consensus expectations, which range from GBP92.5 million to GBP95.9 million. However, Genuit warned that although it has continued to attempt to counter cost inflation during the second half of the year, operating margin will be lower than in the first half.
In New York, Wall Street is on course for a muted start. The Dow Jones is seen flat while the S&P 500 and Nasdaq Composite are both set to fall 0.1%.
In focus will be US retail sales, due at 1330 GMT. The dollar was mostly on the front foot heading into the release.
The euro traded at USD1.1368 early Tuesday, down from USD1.1420 late Monday despite data showing economic growth in the eurozone picked up pace in the third quarter.
For the third quarter, gross domestic product increased 2.2% quarter-on-quarter in the euro area, ticking up from 2.1% in the second quarter.
Against the yen, the dollar rose to JPY114.27 from JPY113.95.
However, the pound was gaining ground against the dollar. Sterling was quoted at USD1.3449 midday Tuesday, rising from USD1.3428 at the London equities close on Monday on the back of a strong labour market update.
The UK unemployment rate eased more-than-forecast to 4.3% in the three months to September from 4.5% for the three months to August. Consensus, according to FXStreet, had pencilled in a decline to 4.4%.
The ONS said it estimates there were 29.3 million payrolled employees in October, up 160,000 on September. This was also 235,000 higher than February 2020's level, so payrolled employees are above pre-virus levels.
And this is despite the government's pandemic job retention scheme winding down at the end of September.
"This morning's UK labour market data, and in particular the provisional estimate of payroll employment for October, would seem to be the missing link needed to convince the MPC to raise rates in December," said Societe Generale's Kit Juckes.
He added: "There could still be more layoffs to come after that scheme, but when the MPC weighs risks to the jobs market against the upward trend in inflation, the latter will surely win."
A UK inflation print is due Wednesday morning.
Gold was quoted at USD1,872.87 an ounce at midday, rising from USD1,860.70 on Monday. Brent oil was trading at USD82.56 a barrel, up from USD81.35 late Monday despite the International Energy Agency saying Tuesday a reprieve from soaring oil prices may be on the horizon as output increases.
It cautioned however that was not because demand for high-polluting oil was decreasing, "but rather due to rising oil supplies".
By Lucy Heming; lucyheming@alliancenews.com
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