Airlines up but oil falls on Middle East talks

(Alliance News) - Stock prices in London were higher at midday Friday, ahead of the afternoon's US jobs data, as earnings from tech behemoths overnight lifted investor morale.

The FTSE 100 index was up 21.24 points, 0.3%, at 7,643.40. The FTSE 250 was up 191.59 points, 1.0%, at 19,322.75, and the AIM All-Share was up 4.12 points, 0.6%, at 756.82.

The Cboe UK 100 was up 0.4% at 764.71, the Cboe UK 250 was up 1.1% at 16,782.73, and the Cboe Small Companies was up 0.3% at 14,710.02.

"The FTSE 100 made a strong start on Friday morning, lifted by positive sentiment in the US overnight as Amazon and Meta chalked up stonking gains on their latest updates," said AJ Bell investment director Russ Mould.

Amazon shares are up 6.4% in pre-market trade in New York, whilst Meta shares are surging 17%.

Online retailer Amazon and Meta, the owner of Facebook, Instagram and WhatsApp, both reported higher yearly and quarterly profit and revenue.

Significantly, Meta opted to initiate a quarterly dividend of USD0.50 per share, on the back of its fourth quarter performance.

Mould added: "While the scorecard for the Magnificent Seven in the current earnings season to date is mixed, Amazon and Meta certainly produced stand-out quarterly updates."

Still to come on Friday is the latest US nonfarm payrolls data at 1330 GMT.

According to FXStreet, the US economy added 180,000 jobs in January, down from 216,000 a month earlier. The unemployment rate is expected to edge up to 3.8% from 3.7%.

"A reasonably weak number should revive the Federal Reserve doves, while a strong number should melt the March rate cut expectations," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The probability of a March hike has fallen drastically this week. According to the CME FedWatch Tool, there is a 35% chance the central bank lowers the federal funds rate range in March from the current 5.25% to 5.50%. A cut was once the most likely outcome for the March meeting.

On Wednesday, the Federal Open Market Committee unanimously voted not to raise the fed funds rate, for the fourth meeting in a row. The key rate is targeted in a range between 5.25%-5.50%, the highest in nearly 23 years.

Stocks in New York are called to open higher. The Dow Jones Industrial Average is called up 0.1% and the S&P 500 index and Nasdaq Composite up by a more convincing 0.5% and 1.0%.

Meanwhile, oil prices eased, on progress to peace talks between Israel and Hamas.

Brent oil was quoted at USD79.07 a barrel at midday in London on Friday, sliding from USD81.21 late Thursday.

Hamas has given "initial positive confirmation" to a proposal for the cessation of fighting in Gaza and the release of hostages, Qatar's foreign ministry spokesperson said.

US, Egyptian and Qatari mediators met with Israeli intelligence officials in Paris on Sunday, where they proposed a six-week pause in the Gaza war and a hostage-prisoner exchange for Hamas to review.

"That proposal has been approved by the Israeli side and now we have an initial positive confirmation from the Hamas' side," Majed al-Ansari told an audience at a Washington-based graduate school.

BP and Shell dropped on the back of lower oil prices. They were down 1.9% and 1.0%, respectively.

Budget airlines were fairing well on Friday, on the back of the news. In London, Wizz Air soared 7.9% and easyJet added 3.5%. Ryanair was up 1.7% in Dublin.

Dublin-based Ryanair said that it carried 12.2 million passengers in January 2024, up 3.4% from 11.8 million in the corresponding month last year. Its load factor fell by two points to 89% from 92% the year before, however.

Ryanair added that the short-term reduction to its load factor followed the removal of most of its flights from online travel agency pirate websites in early December.

Meanwhile, Budapest-based Wizz Air said it carried 4.7 million passengers in January, up 14% from 4.1 million a year ago. Capacity for the month was 20% higher at 5.8 million seats, compared to 4.8 million seats in January 2023.

The Hungarian airline also said it will restart operations into Tel Aviv, with routes from Budapest, Sofia, Bucharest, Krakow, London and Rome from the beginning of March. Back in November, Wizz Air suspended operations in Israel.

Amongst London's small-caps, Superdry surged 78%, as M&A speculation heats up, breathing life into the retailer's share price after a year of profit warnings.

Norwegian-based investment fund First Seagull bought a 5.3% stake in Superdry, according to a regulatory filing on Wednesday.

On Friday, the Times reported that First Seagull considers Superdry "to be ripe for a bid".

The newspaper added that Sycamore Partners, an American private equity company, and Authentic Brands Group, which owns Ted Baker and Forever 21, are said to have Superdry on their radars.

"It's just a matter of time before there's an offer," a source said to the Times.

Superdry Chief Executive Julian Dunkerton confirmed that he is in discussions with potential financing partners. This could include a possible cash offer for the entire issued and to be issued share capital of the company, not already owned by him.

"These discussions are at a preliminary stage and no decisions have been made," Superdry said.

In European equities on Friday, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.5%.

The pound was quoted at USD1.2762 at midday on Friday in London, higher compared to USD1.2708 at the equities close on Thursday. The euro stood at USD1.0883, up against USD1.0851. Against the yen, the dollar was trading at JPY146.50, higher compared to JPY146.13.

Gold was quoted at USD2,055.70 an ounce midday Friday, down against USD2,061.02 on Thursday.

By Sophie Rose, Alliance News senior reporter

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