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FTSE closes higher with Wall Street mixed as Walmart reports growth

A look at how the major markets are performing on Thursday

FTSE IMAGE DISTRIBUTED FOR WALMART - Customers wrap up their holiday shopping during Walmart's Black Friday events on Thursday, Nov. 27, 2014 in Bentonville, Ark. Deep savings continue at Walmart Friday though Cyber Monday as part of five days of events in stores and online. (Photo by Gunnar Rathbun/Invision for Walmart/AP Images)
FTSE: Retail behemoth Walmart boosted its full-year adjusted earnings per share forecast. Photo: Gunnar Rathbun/AP (Invision for Walmart)

The FTSE 100 and European stocks finished higher this Thursday as traders' appetite for risk was boosted by optimism over an eventual breakthrough for US debt-ceiling talks and Walmart beating expectations.

The FTSE 100 (^FTSE) rose 0.26% to close at 7,743 points, while the CAC 40 (^FCHI) in Paris gained 0.62% to 7,445 points. In Germany, the DAX (^GDAXI) advanced 1.30% to 16,157.

FTSE

Back in London, the market was not very impressed with BT's (BT-A.L) announcement that it is axing 55,000 jobs by the end of the decade.

Shares in the company dropped up to 10% in early trading, the biggest faller on the blue-chip FTSE 100 index and finished 5% in the red.

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Total workers, including employees and contractors employed by third parties on BT's behalf, will drop to 75,000 to 90,000 by 2030 from about 130,000 currently. That is a reduction of about 42%.

As well as announcing up to 55,000 job cuts, BT also reported a 1% drop in revenue for the year to 31st March.

Reported profit before tax fell 12% to £1.7bn ($2.12bn), which BT blamed on “increased depreciation from network build and specific items, partially offset by adjusted EBITDA growth”.

BT shares fell as low as 133.2p, from 148.1p last night, the lowest since early February.

Read more: Trending tickers: BT | Burberry | EasyJet | National Grid

Royal Mail owner International Distributions Services PLC (IDS.L) swung into the red as strike action at Royal Mail saw reported losses at its postal delivery business top £1bn.

IDS also took an impairment charge of £539m as the carrying value of Royal Mail reduced to £900m given the current risk backdrop and ongoing industrial dispute. Shares slid by around 6%.

Across the wider FTSE 250 (^FTMC) index, Aston Martin Lagonda Global Holdings (AML.L) which surged 14% higher after the car maker announced a £234m investment from Geely Holding (0175.HK), a Chinese automotive group.

“It forms part of a new agreement between the two companies that "seeks to support Aston Martin's growth and vision to be the world's most desirable ultra-luxury British performance brand," the company said.

US and Asia

Wall Street was mixed on Thursday morning as investors await updates to the ongoing debt ceiling debate and quarterly results from Walmart (WMT) flashed resilience from the American consumer.

The Dow Jones (^DJI) slid 0.16% to 33,366 points. The S&P 500 (^GSPC) gained 0.46% to 4,177 points and the tech-heavy NASDAQ (^IXIC) rose 1.05% to 12,632.

Wall Street has been kept on its toes as the White House and congressional leaders try to thrash out a deal to avoid a looming US debt default. A smaller group of negotiators is taking over as President Joe Biden travels to Asia, but he has announced plans to cut short his trip this week.

Treasury secretary Janet Yellen and others have warned of catastrophic impacts on the US economy in the case of a default, seen as potentially coming as early as June.

Meanwhile, Walmart (WMT) stock ticked up more than 2% in early trading as America's largest big box retailer reported higher same-store sales growth than Wall Street had anticipated. Walmart also boosted its full-year adjusted earnings per share forecast from a range of $5.90-$6.05 to a range of $6.10-$6.20.

In Asia, markets rose as investors further digested Japan’s trade data for April – imports fell further than expected while exports growth saw a two-year low on weakened China demand.

Tokyo’s Nikkei 225 (^N225) gained 1.60% to 30,573 points, while the Hang Seng (^HSI) in Hong Kong rose 0.52% to 19,662. The Shanghai Composite (000001.SS) advanced 0.40% to 3,297 points.

Sony (6758.T) shares surged 6% as it eyes separate listing for financial unit. The Japanese conglomerate is mulling a partial spin off of its financial business in the next two to three years.

Read more: Bank of England ready to raise interest rates again warns Andrew Bailey

Sony said that this will be on the consideration that the group will continue to own a portion – slightly less than 20%, Sony said of the spin off.

Pound

The pound (GBPUSD=X) has extended losses against the dollar as investors turn to the safe haven currency amid worries over the world economy, with sterling trading at $1.2464.

The sterling (GBPEUR=X) was basically flat against the euro in early exchanges and is now trading at €1.1508.

Oil markets

Meanwhile, Brent crude (BZ=F) lost ground and was trading at around $76/barrel as traders warily watched for signs of progress on talks to raise the US debt ceiling, following a surge of nearly 3% in the previous session fuelled by optimism over US fuel demand.

“The oil market continues to be driven by external developments, rather than fundamentals,” said Warren Patterson, head of commodities strategy for ING Groep NV. “The market ignored a largely bearish EIA inventory report.”

Watch: Why investors turn to ETFs during DC's debt ceiling drama

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