LONDON MARKET OPEN: Stock rise but economic worries haven't gone away

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European share prices were rising early Friday in London, as investors looked to end the week on a positive note, though concerns about global 'stagflation' remained in place.

Markets looked to have calmed, however, after US Federal Reserve Chair Jerome Powell - confirmed Thursday by the Senate for a second term - expressed confidence that the US economy is strong enough to withstand tighter monetary policies.

According to Bloomberg, Powell reaffirmed that the Fed was likely to raise rates by a half point but isn't ‘actively considering’ a 75-basis point move.

The FTSE 100 index was up 77.98 points, or 1.1%, at 7,311.32 early Friday. It remains down almost 1% so far this week. The mid-cap FTSE 250 index was up 251.27 points, or 1.3%, at 19,732.15. The AIM All-Share index was up 8.17 points, or 0.9%, at 947.24.

The Cboe UK 100 index was 1.0% at 728.81. The Cboe 250 was up 1.2% at 17,439.64, and the Cboe Small Companies up 0.2% at 14,487.64.

In Paris, the CAC 40 stock index was up 0.6% and the DAX 40 in Frankfurt was 0.5% higher.

In Asia on Friday, the Japanese Nikkei 225 index closed up 2.6%. In China, the Shanghai Composite ended 1.0% higher, while the Hang Seng index in Hong Kong was up 2.7% in late trade. The S&P/ASX 200 in Sydney ended up 1.9%.

In the US on Thursday, equities ended moderately lower, helping to stabilise sentiment after a grim day in Europe. The Dow Jones Industrial Average closed down 0.3% and the S&P 500 down 0.1%, though the Nasdaq Composite closed 0.1% higher.

Oil prices were moving tentatively higher on Friday, as traders weigh up the balance between supply restriction stemming from the war in Ukraine and demand reduction cause by China's zero-Covid policy.

Brent oil was quoted at $108.75 a barrel Friday morning, higher from $108.55 late Thursday. London's oil majors Shell and BP were 1.3% and 2.0% higher, respectively.

In London, Sage was up 1.7% in the FTSE 100. The accounting software firm left its full-year outlook unchanged, after what it called a strong first-half performance, with its Business Cloud offering leading a rise in recurring revenue.

In the six months to March 31, Sage recorded pretax profit of £189 million, down slightly from £190 million in the same period a year prior.

Revenue also was broadly flat, slipping to £934 million from £937 million. Sage noted, however, that organic revenue was up 5%, driven by Sage Business Cloud growth of 21%.

Meanwhile, annualised recurring revenue rose by 10% to £1.78 billion from £1.63 billion a year before. ‘Cloud native’ ARR growth was 43%, Sage said.

Sage upped its interim dividend by 5.0% to 6.30 pence from 6.05p.

For financial 2022, Sage continues to expect organic recurring revenue growth in the region of 8% to 9%.

Peel Hunt kept Sage at 'buy'. ‘We note the ARR growth trend is very broad-based across a multitude of products,’ said analyst Damindu Jayaweera. ‘Importantly, renewal rates improved from 97% last year to 100%, reflecting good engagement with existing customers.’

Amigo Holdings rose 5% in early trading after its creditors voted to push forward with its new business scheme.

The scheme - which is being proposed to settle customer claims following probes from UK regulators into mis-sold loans - required at least 75% of the claims of all creditors vote for it. Amigo noted, at a meeting held on Thursday, over 88% of creditors approved the scheme.

It also said, however, that 83% voted for Amigo's wind down scheme.

Now, the guarantor loans provider will ask the courts to approve the new business scheme, but should it be turned down, will ask for the wind down scheme to be approved.

Amigo said its shares will be suspended while the court decides what scheme to approve.

Chief Executive Gary Jennison said: ‘Our customers have voted in favour of the New Business Scheme, which the board of Amigo believes offers the maximum possible redress to creditors. This is an important step to address the liabilities that arose from historic lending practices under previous management.’

The pound was quoted at $1.2230 early Friday, unchanged from $1.2229 at the London equities close on Thursday. The euro was priced at $1.0410, soft against $1.0417.

Against the yen, the dollar was trading at JP¥128.74, up from JP¥128.25.

Gold stood at $1,825.90 an ounce, down against $1,838.71.

The economic events calendar on Friday has eurozone industrial production at 1000 BST and US import & export prices at 1330 BST.

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