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Micro Focus leads Britain’s FTSE higher in choppy trade

Micro Focus leads Britain’s FTSE higher in choppy trade

LONDON: UK shares were flat to slightly higher in choppy Monday trade after hitting their highest in nearly two weeks as leading software group MicroFocus surprised with robust revenue outlook and Evraz was boosted by gains in steel prices in China.

The FTSE 100 was up 0.1 pct at 1039 GMT, extending last week’s gains as the market continued its cautious recovery from October’s brutal sell-off, shrugging off weaker performance by Asian markets overnight.

Defensives from Diageo to Astrazeneca contributed the biggest gains, with financials on the backfoot.

The market hit its session high after the pound was briefly knocked by data showing business activity in Britain’s dominant services sector slowed to a seven-month low last month.

The weak services PMI reading highlights a likely slowdown for fourth-quarter GDP, which is expected to come in around 0.2 percent, said Josh Mahony, market analyst at IG.

“European markets are moderately higher this morning, despite a session of sharp losses overnight,” he said.

Investors were also watching for news that Britain has reached a deal with the European Union on its post-Brexit financial services trade, but sentiment was cautious ahead of U.S. Midterm elections on Tuesday.

Evraz was the top gainer, up 5.4 percent, after rebar steel prices in China, the world’s top consumer and producer, recovered from three-week lows on hopes Beijing’s efforts to shore up the world’s second-largest economy will boost demand.

Micro Focus, up 4 percent, was the second biggest gainer among the blue chips after forecasting full-year revenue will be better than initially expected and the company announed plans to renew its share buyback programme.

The stock has lost more than half of its value this year after a series of weak trading updates.

Ashtead dropped 3 percent as Barclays cut its price target, following a similar move by HSBC last week.

Among the midcaps, the FTSE 250 was down 0.4 percent, with Hiscox punished for its cautious outlook.

Hiscox, underwriter for Lloyd’s of London, warned that its growth would be moderate in the final quarter of the year.  Its shares were at a three-month low and on course for their worst daily performance since July 2016.

Copyright Reuters, 2018

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Source: Brecorder

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