(Alliance News) - The FTSE 100 was higher around midday on Friday, outperforming European peers, boosted by a slew of well-received earnings helping offset tariff threat nerves.
The FTSE 100 index was up 26.71 points, 0.3%, at 8,782.92. The FTSE 250 was down 77.39 points, 0.4%, at 20,337.34, and the AIM All-Share was down 3.49 points, 0.5%, at 704.23.
The Cboe UK 100 was up 0.4% at 880.09, the Cboe UK 250 was down 0.4% at 17,670.49, and the Cboe Small Companies was down 0.3% at 15,644.53.
Engineers IMI and Weir Group led the blue-chip risers after earnings, while British Airways owner, IAG, was also flying high. Rolls-Royce was also in the green, building on Thursday's hefty gains, amid glowing broker comments.
IAG, which was the best performing stock on the FTSE 100 in 2024, climbed further 5.2% after launching a EUR1 billion share buyback, boosting its dividend and reporting better-than-expected operating profit.
Operating profit before exceptional items more than doubled to EUR1.12 billion in the fourth quarter from EUR502 million, beating consensus of EUR754 million. Final quarter revenue rose 11% to EUR8.05 billion from EUR7.22 billion.
IAG said it was helped by prices rises and strong leisure demand although the recovery in corporate travel was slower.
"IAG’s 2024 results are best in class," said analysts at Peel Hunt, noting results smashed expectations.
IMI climbed 5.2% as it announced a new GBP200 million share buyback, and posted 2024 profit growth, hailing "another strong year" driven by its Process Automation division.
The engineering firm said pretax profit in 2024 rose 9.3% to GBP330.4 million from GBP302.4 million. Adjusted operating profit rose 6.1% to GBP435.5 million from GBP410.6 million, beating the GBP434 million consensus.
Adjusted operating margin was 19.7% in 2024, and IMI said it is raising its adjusted operating margin target to 20% plus.
Glasgow-based engineer Weir Group rose 4.1% after announcing a major acquisition in Australia as it reported a healthy increase in profit in 2024.
It has agreed to buy Perth, Australia-based Mining Software Holdings, known as Micromine, for GBP657 million.
IMI said the cash deal is expected to close in the second quarter. It expects the acquisition to be accretive to earnings per share in the first full year of ownership.
Chief Executive Officer Jon Stanton said: "The acquisition of Micromine is a significant step in our strategy of investing in technology to accelerate smart, efficient and sustainable mining."
Jefferies analyst Andy Douglas said: "This is a good, strategic deal that we are upbeat on over the longer-term, but management is paying up in the near-term."
Rightmove was also on the front foot, rising 3.3%.
The Milton Keynes-based online property portal reported "sustained" traffic growth, with a total of 16.4 billion minutes spent on the platform in 2024, up 6.5% from 15.4 billion in 2023.
It said it was the fourth-busiest UK-based digital platform in 2024, behind only the BBC, newspaper publisher Reach, and the UK government's own website, gov.uk.
Rightmove highlighted continued growth in the uptake of its top packages: 'Optimiser Edge' for estate agents and 'Advanced' for new home developers.
Looking ahead, Rightmove expects revenue growth of 8% to 10% in 2025.
Rolls-Royce, which soared 15% on Thursday rose a further 2.9% on Friday.
JPMorgan increased its share price target to 900p, while Bank of America went further, lifting its target to 1,150p per share.
BofA highlighted significantly better free cash flow, a robust outlook and capital returns as reasons for the increased optimism.
But further heavy falls in US tech stocks on Thursday saw Scottish Mortgage Investment Trust slip 2.7%.
US stocks took a tumble on Thursday in the wake of further tariff threats from Donald Trump.
The US president said he would impose an additional 10% tariff on Chinese imports. The latest move is due to take effect on Tuesday alongside sweeping 25% levies on Canadian and Mexican imports, intensifying a brewing trade war between the world's two largest economies.
The 10% tariff on Chinese imports will come on top of an existing levy of the same rate
imposed by Trump on China earlier this month.
Kathleen Brooks at XTB said: "It is worth noting that there is still time for things to change in Trump world. While he seems resolute that tariffs will be employed by the US administration, could a rush of diplomatic efforts and calls to the White House see Trump’s stance change over the weekend? This cannot be ruled out, due to Trump’s style of politics. Added to this, he could give certain sectors and companies a reprieve, like he did in his first term. If there are positive developments over the weekend, then this could set the stage for a rebound in risk assets next week."
But UBS warned that 'crying wolf' on tariffs has economic implications, even if taxes never appear.
"There is some evidence of consumers buying earlier out of fear of tariffs. Firms may raise prices ahead of tariffs. Because businesses invest in an uncertain future, increasing uncertainty affects investment risks," the bank explained.
Stocks in New York are expected to rally on Friday. The Dow Jones Industrial Average was called up 0.3%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.3%.
Investors will scrutinise January's core PCE data, the Fed's preferred inflation gauge, at 1330 GMT.
Goldman Sachs expects the core PCE price index to have risen by 0.3% on-month in January, corresponding to a year-over-year rate of 2.5%. Goldman expects that the headline PCE price index increased by 0.3% from the prior month, corresponding to a year-over-year rate of 2.4%.
In European equities on Friday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both down 0.3%.
The pound was quoted lower at USD1.2592 at midday on Friday in London, compared to USD1.2626 at the equities close on Thursday. The euro stood lower at USD1.0398, against USD1.0407. Against the yen, the dollar was trading higher at JPY150.43 compared to JPY149.97.
Elsewhere in London, Morgan Advanced Materials plunged 17% after guiding for a mid single-digit organic revenue decline in 2025.
"Demand for semiconductor capacity has been impacted by the slower growth in [battery electric vehicles] leading to high customer inventory levels in the short term," the firm said in a statement.
Analysts at RBC Capital markets said the outlook "suggests continued tough progress and potential upper single digit percentage consensus downside risks for 2025".
Brent oil was quoted lower at USD72.79 a barrel at midday in London on Friday from USD73.76 late Thursday. Gold was quoted lower at USD2,860.32 an ounce against USD2,873.26.
Still to come on Friday's economic calendar, US personal consumption expenditures figures.
By Jeremy Cutler, Alliance News reporter
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