LONDON MARKET MIDDAY: Stocks mixed, pound lower on quiet Friday

(Alliance News) - Stock prices in London were mixed at midday on Friday, but looked set to close a quieter trading week in the green.

The FTSE 100 index was up 20.57, 0.3%, at 7,487.17. The FTSE 250 was down 90.37 points, 0.5%, at 19,449.97 and the AIM All-Share was 1.14 points, 0.1%, at 845.53.

The three stock indices were on track to end the week up 1.4%, 0.9%, and 0.9% respectively.

The Cboe UK 100 was up 0.2% at 748.98, the Cboe UK 250 was down 0.4% at 16,868.84. The Cboe Small Companies was up 0.1% at 16,868.84.

"We're seeing subdued trading at the end of the week, with the absence of the US leaving markets lacking any notable direction," said Oanda's Craig Erlam.

US financial markets were closed on Thursday, as Americans celebrated the Thanksgiving holiday. Wall Street will open for a shortened trading session on Friday, closing at 1pm local time - 1800 GMT.

Stocks in New York were called mostly higher, with the Dow Industrials pointed up 0.2%, the S&P 500 index up 0.1%, and the Nasdaq Composite flat.

"Barring a flurry of big headlines from elsewhere, we could now see equity markets just drift into the weekend with investors already having an eye on next week," Erlam said.

In European equities on Friday, the CAC 40 in Paris was up 0.1%. The DAX 40 in Frankfurt was similarly subdued, up 0.1%, despite stronger-than-expected growth in the German economy.

Germany's gross domestic product grew 1.3% on an annual basis in the three months to September 30, improving on the first estimate, which had said Europe's largest economy expanded by 1.2%.

Quarter-on-quarter, GDP grew 0.4% in the third quarter of 2022. It is a third successive quarterly GDP rise for the nation. The German economy had risen 0.1% in the second quarter and 0.8% in the first.

"A recession in Germany and in the eurozone remains probable but it is unlikely to get as bad as had been expected only a few months ago. Concerns that the ECB might not hike its key rate sufficiently in view of economic risks are therefore likely to ease," said Commerzbank analysts.

It also was a muted day for foreign exchange markets.

The pound was quoted at USD1.2106 at midday on Friday in London, down from USD1.2125 at the London equities close on Thursday. The pound has pulled back after reaching USD1.2153 on Thursday, its best level since August 11.

The euro stood at USD1.0403, little changed from USD1.0405 late Thursday. Against the yen, the dollar was trading at JPY139.21, up from JPY138.49.

In London, energy firm SSE edged up 0.8%, after it struck a deal to sell a stake in its transmission arm.

The Ontario Teachers' Pension Plan Board will buy into the unit. SSE expects GBP1.47 billion in proceeds for the stake sale in the electricity transmission network business.

SSE a year ago said it planned to sell 25% stakes in each of its SSEN Transmission and SSEN Distribution arms. The process to sell a stake in the electricity distribution business is expected begin "in early 2023".

"It's part of a strategic shift towards renewable energy generation and a desire to focus more on wind and hydropower. The deal didn't move the dial for investors, with the share price barely budging on the news," commented AJ Bell analyst Russ Mould.

In London's midcaps, ICG Enterprise Trust rose 2.4%, as it said it is investing a total of USD14.0 million in two companies.

The London-based investment company expects to invest USD9.0 million in Gateway Services, a company focused on operating a network of pet crematoria and pet cemeteries across 150 locations in 40 US states and four Canadian provinces.

Meanwhile, alongside Gridiron Capital Fund V, ICG Enterprise Trust made a USD5.0 million follow-on co-investment in coaching organisation Vistage Worldwide. The companies previously invested USD10.0 million together in Vistage in August.

Man Group shed 1.6% to 214.60 pence, as UBS cut the investment manager's stock to 'neutral' from 'buy', and cut its target price to 220p from 275p.

The Swiss bank cited concerns over the negative impact of the de-risking of pension funds on Man Group's fund flows in the coming nine to 12 months.

Elsewhere, Devro surged 60%, after agreeing to a takeover by food manufacturing company Saria.

The deal values the sausage casings maker's equity at GBP540 million and gives it an enterprise value, including debt, of GBP667 million. Saria, which manufacturers products for human and animal consumption, will pay 316.1p per Devro share, a 65% premium to its 192.0p closing price on Thursday.

"Devro has been plagued by profit warnings over the years, but it's had a habit of bouncing back. While its latest half year results showed profits slipping, the company was confident about the full year," AJ Bell's Mould said.

On AIM, IOG jumped 46%, as it restarted production from both its Blythe and Elgood operations into the Saturn Banks pipeline systems, as planned, after a shutdown of works.

The gas infrastructure operator said gas sales are expected to recommence Friday following re-pressurisation.

Final connection, dewatering and backgassing of the system's out section have also been completed.

A2 first gas is expected around the end of the year, subject to stimulation progress and operational risk to final hook-up and commissioning. The A1 well will be completed after this first gas.

Hydraulic stimulation operations are underway, IOG said, and are expected to continue into December.

Brent oil was quoted at USD86.43 a barrel at midday in London on Friday, up from USD85.08 late Thursday. Gold fetched USD1,753.70 an ounce, down from USD1,756.76.

By Elizabeth Winter; [e-mail]

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