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London open: Stocks rise but upside limited ahead of busy session

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UK markets opened with small gains on Thursday morning as investors reacted to a number of blue-chip results, though upside was limited ahead of what is set to be a busy day for financial markets across the globe.

Smith & Nephew impressed with its annual results early on, while Vodafone, Compass and easyJet edged higher after trading updates. AstraZeneca, on the other hand, declined after its 2013 figures and TUI Travel slumped following its quarterly statement.

There will be a host of economic data due out later in the session, including: new car registrations in the UK; German factory orders; and jobless claims and the trade balance in the States.

However, policy decisions at the Bank of England (BoE) and European Central Bank (ECB) are likely to garner the most attention. While the BoE is widely expected to keep policy unchanged at midday, the ECB will be closely watched this afternoon given last month’s surprise dip in inflation in the Eurozone.

“The main event is the ECB meeting, where we expect a refi rate cut to 0.1%,” said analysts at Danske Bank this morning. The rate was reduced to the current record-low rate of 0.25% in November.

“During January we have seen low inflation and declining inflation expectations combined with higher short-term money market rates – two scenarios ECB’s Draghi said would lead to policy action,” they said.

Investors will also be looking ahead to the US Labor Department’s all-important non-farm payroll data due out tomorrow with labour-market figures continuing to be scrutinised after the Federal Reserve’s decision last month to continue tapering its stimulus programme. The report is expected to show that non-farm payrolls rose to 184,000 in January from just 74,000 in December.

Smith & Nephew, Vodafone, AstraZeneca…

Medical equipment manufacturer Smith & Nephew beat analysts’ forecasts as it registered a strong end to 2013 with underlying revenue growth picking up in the fourth quarter. The company also lifted its full-year dividend by 5% and gave a confident outlook for 2014, lifting shares higher early on.

Vodafone’s third-quarter revenue dropped 3.6%, reflecting challenging trading conditions in Europe and competitive pressures, but the stock gained this morning after Chief Executive Vittorio Colao said that sales trends would begin to improve.

AstraZeneca was in the red after saying that 2013 annual revenue fell 6% to $25.7bn as the drug maker was hurt by competition from generic brands. Core earnings per share fell 26% year-on-year to $5.05.

Catering giant Compass was slightly higher after keeping expectations for the full-year organic results unchanged after a “good” first quarter. However, the company warned that adverse currency movements may dampen statutory numbers due to the recent strength in sterling.

TUI Travel underwhelmed despite saying that it is confident of hitting full-year forecasts after underlying operating losses narrowed in the first quarter.

Imagination Technologies surged after announcing that US gadget giant Apple as extended its multi-year, multi-use license agreement with the chip designer.


FTSE 100 – Risers
Reckitt Benckiser Group (RB.) 4,774.00p +2.51%
Smith & Nephew (SN.) 892.00p +2.00%
GKN (GKN) 394.80p +1.73%
Prudential (PRU) 1,252.00p +1.62%
Vodafone Group (VOD) 218.35p +1.13%
International Consolidated Airlines Group SA (CDI) (IAG) 416.20p +0.87%
ARM Holdings (ARM) 900.00p +0.84%
Associated British Foods (ABF) 2,905.00p +0.76%
Hargreaves Lansdown (HL.) 1,355.00p +0.74%
Barclays (BARC) 266.90p +0.74%

FTSE 100 – Fallers
AstraZeneca (AZN) 3,763.50p -2.93%
Tullow Oil (TLW) 828.50p -2.47%
RSA Insurance Group (RSA) 101.70p -1.83%
Fresnillo (FRES) 781.00p -1.39%
TUI Travel (TT.) 418.60p -1.37%
William Hill (WMH) 340.10p -1.10%
Randgold Resources Ltd. (RRS) 4,359.00p -1.07%
Anglo American (AAL) 1,437.00p -1.03%
Old Mutual (OML) 172.40p -0.86%
Mondi (MNDI) 932.50p -0.75%

Source: ShareCast