London open: Microsoft gives stocks an early boost

Stocks edged higher at the start of trading, boosted by an overnight surge in shares of US tech giant Microsoft and despite figures which appeared to show that property price curbs might be starting to bite.

As of 0831 BST the Footsie was higher by nine points or 0.13% to 7,035.82.

Redmond, Washington-based Microsoft blew past analysts´ forecasts for the first quarter of its financial year, reporting $4.69bn of net income, for 76 cents a share in earnings in adjusted terms (consensus: 68 cents). Top-line growth came in at 5% to reach $22.33bn on a constant currency basis (consensus: $21.7bn).

Stocks in Microsoft closed 6% higher in after-hours trading.

New-home prices in Beijing fell 3.7% during the first weeks of October when compared with the prior month and by 2.5% in Shanghai, the National Bureau of Statistics said Friday, after various cities began introducing measures to curb prices.

Against that backdrop, investors awaited the release of borrowing figures at 0930 BST and quarterly results from US corporates including McDonalds, General Electric and Honeywell.

Preliminary Eurozone-wide consumer confidence data for October were scheduled to be released at 1400 BST and Belgian business confidence figures at 1300 BST.

On Thursday, European Central Bank chief Mario Draghi said policymakers had not discussed whether to extend the €80bn-a-month bond purchase programme that expires next March.

CMC Markets’ Colin Cieszynski said: “The ECB meeting was the main event where President Draghi left the door to an extension of the central bank’s QE stimulus program past March indicating changes were not discussed but suggesting there could be more news in December following a program review.

“He indicated that the ECB would likely not stop QE cold turkey leaving the door open to tapering in future.”

In corporate news, British American Tobacco launched a $47bn cash and shares take-over offer for the 57.8% of Reynolds American which it did not already own.

London-listed BAT had not held prior negotiations with Reynolds, the company said in a statement.

The offer valued Reynolds at $56.50 a share, for a 20% premium over the closing price of its shares on 20 October.

Combined, the two companies would enjoy a leading position in the US tobacco market and hold a significant presence in high-growth emerging markets across South America Africa, the Middle East and Asia.

Playtech announced on Friday that it has acquired bingo software and hardware solutions provider ECM Systems.

The FTSE 250 company said ECM supplies software and support services to the UK retail bingo market, including major operators Gala Leisure, Mecca Bingo and the leading independent bingo operators.

Intercontinental Hotels Group’s third quarter revenue increased with a strong performance in China, but was affected by the strength of dollar and the volatile foreign exchange market.

In a trading update, revenue per available room for the third quarter grew 1.3%, compared to the previous quarter, and up 1.8% for the year-to-date.

Acacia Mining reported a sharp drop in its operating costs during the third quarter of 2016, which contributed to a near doubling of its cash even as the company raised its full-year guidance for output. Group all in sustaining costs declined 16% to $998 per ounce over the three months ending on 30 September, including a $97 per ounce share-based valuation charge.

That saw the company increase its net cash position by $32m to $203m, almost twice the figure with which it ended 2015.