Friday May 16, 09:06 AM
London shares open firmer; NY closes higher; BA gains after results UPDATE
(updating with full details)
LONDON (Thomson Financial) - Leading shares opened firmer as Wall Street closed higher on Thursday with British Airways (LSE: BAY.L - news)
one of the the major gainers in the UK blue chips after unveiling a rise in its full-year pretax profit and British Energy Group up on bid talk.
At 8:48 a.m., the FTSE 100 index was 38.8 points higher at 6,290.6 after closing up 35.8 points at 6,251.8, while the FTSE 250 (news) index was ahead 106.7 points at 10,445.6.
'A strong start on the FTSE 100 index following on from a higher close on the DJIA. The British Energy story is rumbling on. We expect more upside from the stock as other parties make offers for the company,' said Mark Priest, head of equity sales at Tradindex.
'British Airways also caught everyone by surprise with better than expected results,' added Priest.
In the U.S. Thursday, Wall Street notched its second straight daily gain with investors assuaged by a pullback in oil prices and some better-than-expected economic data with regional manufacturing activity contracting in May at a much slower pace than in April.
The DJIA index rose 94.28 points to 12,992.66, while the S&P 500 index rose 14.91 points to 1,423.57, and the Nasdaq composite (NASDAQ: news) index rose 37.03 points to 2,533.73.
Looking at U.S. economics Friday, the latest North American building statistics are likely to show that the number of homes on which builders broke ground in April fell to 940,000 from 947,000 the previous month.
Today's preliminary University of Michigan consumer sentiment index is expected to drop slightly to 62.5 in May from 62.6 in the previous month.
Over in Asia markets were mixed, the Nikkei 225 (news) index closed down 32.26 points at 14,219.48, while the Hang Seng (news) index ended the morning up 161.80 points at 25,67.51.
Elsewhere, oil prices in Asian trade amid tight global supplies and as investors continued to buy into the commodity which has given better returns than bonds and equities.
New York's main oil futures contract, light sweet crude for June delivery, was up 73 cents to 124.85 dollars per barrel, off its record high of 126.98 dollars a barrel on Tuesday.
London's Brent crude contract for July rose 76 cents to 123.39 dollars. The contract for June expired at the close on Thursday, settling at 122.77 dollars.
Turning to the UK blue chips, British Airways, gained 16-1/2 at 24-1/2 after the group posted a 44.5 percent rise in its full-year pretax profit on higher revenue and said the current year will be challenging, against an uncertain economic outlook.
For the year to March 31, 2008, BA said its pretax profit rose to 883 million pounds from 611 million last year as revenue increased to 8.75 billion pounds from 8.49 billion the year ago. Total operating costs were down 0.7 percent to 7.9 billion pounds with unit costs also down 0.5 percent.
In M&A news, British Energy Group was 47 higher at 727 after it said it has received a number proposals from parties wanting to make full offers for the company, but said any decision will be delayed for a number of weeks because the proposals need 'further development'.
National Grid (LSE: NG.L - news) gained 8-1/2 at 724-1/2 after Credit Suisse reiterated its 'neutral' recommendation and 880 pence target price on the group and said the stock is a 'trading buy' after 'strong' full-year results on Thursday.
Sticking with broker news, Compass Group (LSE: CPG.L - news) ticked up 5 at 361-1/4 as Goldman Sachs (NYSE: GS - news) upgraded the company to 'neutral' from 'sell', following first-half results from the contract caterer on Wednesday.
Looking at the downside, BHP Billiton (LSE: BLT.L - news) was off 26 at 2,148 on profit taking after rising Thursday following a newspaper report that Chinese interests will team up with a major Australian investment fund to buy a 9 percent stake in the world's largest miner.
Its peers were also lower following recent gains Rio Tinto (Frankfurt: 855018 - news) fell back 76 at 6,947, Vedanta Resources (LSE: VED.L - news) was down 20 at 2,514, Xstrata (LSE: XTA.L - news) was off 11 at 4,279 and Antofagasta (LSE: ANTO.L - news) lost 5-1/2 at 784-1/2.
In the midcaps, Petrofac (LSE: PFC.L - news) was up 15 at 350 after the group said it expects net profit for 2008 to be at the top end of market expectations.
And, Ladbrokes (LSE: LAD.L - news) gained 11-1/4 at 321-1/4 as it announced profits from continuing operations, excluding high roller activity, increased 13 percent in the first four months of 2008.
The bookmaker said profit from high rollers was 40 million pounds over the period but noted activity has recently fallen to de minimis levels.
Meanwhile, Capital & Regional was 15 higher at 350 after the group said its underlying tenant facing business remains resilient with all indicators within their normal trading range and that its plan to raise new equity within its community shopping centres 'The Mall' has progressed well.
Turning to the downside, Rightmove (LSE: GB00B0MFTM73.L - news) was off 20-3/4 at 364-3/4 as the group said it is to place up to 16.2 million shares via accelerated bookbuilding.
Finally, a broker downgrade left shares in Logica 3-3/4 lower at 123-3/4 after Goldman Sachs downgraded the group to 'sell' from 'neutral' while reiterating its 120 pence target price, following its recent share price rally.
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