Stock prices in Europe were higher on Tuesday afternoon, ahead of a US retail sales reading, while stocks in the UK were up after data showed grocery price inflation eased in June.
The FTSE 100 index was up 32.94 points, or 0.4%, at 8,175.52. The FTSE 250 was 132.88 points, or 0.7%, at 20,292.77, and the AIM All-Share was up 2.01 points, or 0.3%, at 776.94.
The Cboe UK 100 was up 0.4% at 814.27, the Cboe UK 250 was up 0.5% at 17,670.06, and the Cboe Small Companies was down 0.1% at 16,551.54.
In European equities on Tuesday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.3%.
The pound was quoted at $1.2686 at midday on Tuesday in London, compared to $1.2685 at the equities close on Monday. The euro stood at $1.0718, against $1.0723. Against the yen, the dollar was trading at JP¥158.10 compared to JP¥15.84.
Stocks in New York were seen predominantly higher. The Dow Jones Industrial Average was called marginally lower, while the S&P 500 index was seen just about in the green, and the Nasdaq Composite up 0.2%.
Inflation readings will be the focus on Tuesday and Wednesday.
This morning, figures from Eurostat showed that annual consumer price inflation in the eurozone accelerated to 2.6% in May, from 2.4% in April. The reading was in-line with an earlier estimate.
Consumer prices increased 0.2% in May from April, also in line with the prior estimate. In April from March, prices rose by 0.6%. Core inflation, which strips out energy, food, alcohol & tobacco prices from the calculation, picked up to 2.9% in May, from 2.7% previously.
The European Central Bank earlier this month cut interest rates by 25 basis points. The interest rate on the main refinancing operations, the marginal lending facility, and the deposit facility now stand at 4.25%, 4.50% and 3.75%, respectively.
However, subsequent comments from President Christine Lagarde dialled down expectations for further cuts.
Meanwhile, on Wednesday, the eve of the Bank of England decision, UK inflation data is released. According to consensus cited by Trading Economics, a return to the Bank of England’s 2% is expected, easing from a consumer price inflation rate of 2.3% in April.
The BoE is expected to leave rates unmoved on Thursday.
According to figures from Kantar, UK grocery price inflation eased to 2.1% in the four weeks to June 9, the lowest level since October 2021. This was lower than the 2.4% reported in the four weeks to May 12, which itself was down from 3.2% in April.
In the same four week period, Kantar said grocery sales rose by 1.0%. For the 12 weeks to June 9, total grocery sales rose 2.4% to £33.98 billion from £33.18 billion a year prior. This was slightly below the 3.6% growth seen in the 12 weeks to May 12.
Fraser McKevitt, head of retail & consumer insight at Kantar, said: ‘The sixth wettest spring on record hasn’t just dampened our spirits leading into summer, it’s made a mark on the grocery sector too as it seems Britons are being put off from popping to the shops. We’re not yet reaching for those typical summertime products and are making some purchases you wouldn’t expect in June.’
Still to come on Tuesday, there is a US retail sales reading at 1330 BST.
In London, Ashtead Group fell 4.1%, the worst FTSE 100 performer, as its guidance disappointed. The equipment hire company reported an annual revenue hike and it lifted its payout, though profit declined on a higher interest expense amid lofty central bank rates.
Revenue in the year ended April 30 improved 12% to $10.86 billion from $9.67 billion. Pretax profit, however, fell 2.1% to $2.11 billion from $2.16 billion. Interest expenses were 48% higher at $546.3 million, while operating costs rose 14% to $5.97 billion.
Ashtead proposed a final dividend of 89.25 cents per share, up 5.0% from 85.0 cents. Its annual dividend totalled 105.0 cents, also rising 5.0% from 100.0 cents.
Looking ahead, it said: ‘Our end markets in North America remain robust with healthy demand, supported in the US by the increasing number of mega projects and recent legislative acts. We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural changes.’
For the new year, it expects rental revenue growth of 5% to 8% at constant exchange rates, slowing from a 10% rise in the year just ended.
Premier Inn owner Whitbread climbed 2.4%.
It said its first-quarter sales nudged slightly higher, helped by ‘improved UK trading and continued progress in Germany’. Sales in the 13 weeks to May 30 rose 1% to £739 million.
According to Chief Executive Dominic Paul ‘total accommodation sales and [revenue per available room] remained significantly ahead of pre-pandemic levels’, thanks to a favourable supply backdrop.
Paul also noted a strong performance in Germany, ‘led by the increasing maturity of our estate and continued room growth. Our cohort of more established hotels is continuing to outperform the M&E market and we remain on course to achieve the important milestone of reaching break-even on a run-rate basis during the second half of 2024.’
Whitbread said recent trading in the UK has been ‘more encouraging’ and the firm is confident in its full-year outlook.
Elsewhere in London, XP Power tumbled 15%.
Suitor Advanced Energy Industries will not make a takeover offer for the power control systems maker. XP Power responded, noting it had no contact from Advanced Energy since rejecting an indicative proposal in mid-May, and reiterated its full-year trading expectations.
Advanced Energy noted a ‘lack of any progress’ when it sought to engage with the XP Power board. This meant it did not have access to the ‘due diligence necessary to make a firm offer’. Advanced Energy Industries is a maker of precision power conversion, measurement, and control solutions.
In May, it said it made three all-cash takeover approaches, each slightly higher than the last. The first offer in October valued XP Power’s equity at £339 million, a second roughly two weeks later in November valued it at £369 million and the most recent, in May, valued it at £468 million. Including debt, the latest proposal had a total value of £571 million.
On AIM, Crossword Cybersecurity jumped 55%. It has signed a three-year, exclusive partnership with the UK unit of a ‘global aerospace, defence and security company’. The duo will jointly market supply chain cyber platform Rizikon to sub sectors in the UK critical national infrastructure market.
‘This is a potentially transformational partnership for Crossword with a global scale, innovative defence and security partner with an outstanding reputation,’ the firm’s incoming CEO Stuart Jubb said.
Elsewhere, medical technology firm AOTI made its debut on the AIM market. The firm said it raised £35.1 million via its initial public offering. AOTI raised £19.5 million via placing 14.8 million newly issued shares at a placing price of 132 pence each, and £15.6 million via placing 11.8 million existing shares at the same price.
Brent oil was quoted at $84.06 a barrel at midday in London on Tuesday, up from $83.45 late Monday.
Gold was quoted at $2,309.80 an ounce against $2,321.50.
Still to come on Tuesday’s economic calendar, there is a handful of data from the US, including industrial production at 1315 GMT, and a speech by the Federal Reserve Governor Adriana Kugler at 1700 GMT.
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