Leading shares are heading higher after comments from the US Federal Reserve suggested there may well be no rate rise this month, as well as continuing strength in the oil price.
The rise in the FTSE 100 - up 31.19 points to 6192.82 - has come despite a number of companies going ex-dividend.
These include Pearson, which is down 46p at 822p and is the biggest faller in the leading index. Analysts however believe the ex-dividend is not the only reason for the fall. Ian Whittaker of Liberum issued a sell note, saying:
Pearson is off sharply today, in part because it has gone ex-div (34p final dividend) but also presumably because of a negative read-across from US for-profit higher education provider Apollo Education Group, which reported second quarter results last night and withdrew its full year guidance after admitting that numbers would be below expectations driven by lower than expected student numbers...
Our biggest area of concern with Pearson is its US higher education business, which we estimate is at least a third of group profits: with for-profits structurally impacted and community college enrolments also down, enrolment issues are compounding Pearson’s structural problems with textbooks.
Others going ex-div include Aviva, down 11.4p to 430.6p, Lloyds Banking Group, 1.49p lower at 66.09p and Taylor Wimpey, off 3.4p at 190.3p.
Also falling is Worldpay, down 7.5p at 275.3p after major shareholders Advent International and Bain Capital sold 275m shares via a placing at 2690p to raise around £740m.
With hopes of a deal to freeze oil output at this month’s meeting of producers, Brent crude has added another 0.3% to $39.97 a barrel.
Upbeat news from China’s economy has supported miners, with Anglo American up 15.9p at 538.4p and BHP Billiton, 20.9p better at 753.6p, helped by JP Morgan raising its target price from 600p to 665p.
AstraZeneca has added 75p to 4202.5p in the wake of the collapse of Pfizer’s $160bn deal to buy Allergan, as investors tried to decide where Pfizer may pounce next.
As for the Fed, the minutes of its last meeting suggested a June rise could be on the cards, according to Caxton FX analyst Alexandra Russell-Oliver:
The Fed debated an April rate hike—some see a case for it, some think that would send a signal of urgency that isn’t “appropriate”. Subsequently, the Fed continues to expect to raise rates at a gradual pace, and is proceeding with caution. So while am April rate hike remains unlikely, a June hike is still on the table, provided upcoming data continues to support the argument for raising rates.
