UK markets make a strong start to trading on Friday, buoyed by Japan's surprise expansion of an internal monetary-easing programme in a bid to revive economic growth. The mood is also aided by a string of positive corporate updates, most notably from blue-chips Royal Bank of Scotland (RBS), British Airways-owner International Consolidated Airlines (IAG) and car and home insurer Direct Line (DLG).
That sparks a 76 point jump in early deals for the benchmark FTSE 100 index, hitting a 6,539 levels not seen since 6 October.
But it's not all good news as Britain's surprise Indian summer melts profits hopes at fashion retailer SuperGroup (SGP) slumps 10.4%, or 92p, to 793p after becoming the latest high street retailer to cough up a weather-related profits warning, following Wednesday's alert by Next (NXT). The Superdry brand-owner downgrades full year profit guidance to a range of £60 million to 65 million, down from an earlier consensus range of £67.1 million to £72.3 million.
Royal Bank of Scotland (RBS) leads the Footsie higher, rising more than 4% to 380.4p, as it beats third quarter profit expectations. Its £1.2 billion adjusted pre-tax reverses the £634 million loss a year ago. However, the bank flags an enormous near- £800 million provision set side to pay potential fines after being embroiled in a forex probe. RBS is also facing a stringent Bank of England financial stress test.
Anglo-Spanish airline conglomerate IAG is also a strong performer, rising 4.1% to 406.7p, as it reports a 30% jump in third-quarter operating profits on the back of falling fuel costs and lifted its guidance for full-year growth.
Car and homes insurer Direct Line flags 'highly competitive' markets but reassures investors by saying that pricing in the motor insurance market continues to stabilise. The company says it remains on track to hit its full-year targets.
Trinidad oil play Range Resources (RRL:AIM) rallies 9.3% to 0.85p as a third quarter update reveals an 7% quarter-on-quarter build in net production from the country to 556 barrels of oil equivalent. House broker Cantor Fitzgerald comments: 'We are pleased to see that production numbers have increased, as well as revenue as a result of these higher volumes, and that the effects of management belt tightening are being seen in the numbers.'
Quirky British fashion label Ted Baker (TED), a running Shares Play of the Week, slides 16p to £19.39 on a disappointing litigation update. The High Court hasn't upheld Ted Baker's claim against AXA Insurance for losses caused by a historic warehouse theft, and the retailer will now have to shell out costs as a result.
Car dealer Pendragon (PDG) adds 4.1% at 32p as strong third quarter trading drives forecast upgrades.
Escalating losses at IT and communications platform supplier Coms (COMS:AIM) hangs heavily on the shares, which slump 12% to 3.25p. Interim results to end July show a pre-tax deficit widening from £88,645 to £417,469, as the company invests for growth, but potentially calling into question hopes of maiden profits this year. Revenues, by contrast soar from just just of £2.5 million to £23.1 million, but the market mood is currently so hot for high-growth hopefuls.
The rally in electronics distributor Premier Farnell (PFL) continues following its capital markets day. CEO Laurence Bain gave investors more detail on his plans to extend Premier’s offering to new customer segments. The stock is up 2.2% to 190.5p today, after rallying close to 3% yesterday.
Letting agency franchiser Martinco (MCO:AIM) advances 4.7% to 121.5p on buying insurer Legal & General’s (LGEN) property franchise business for £5 million. The deal adds 89 offices to its network.
Business centre operator Regus (RGU) jumps 4.3% to 192.8p on third quarter revenues up 7% to £413.6 million, which would have been a 13.5% improvement but for the strong pound.
