Stock prices in London rose on Thursday afternoon ahead of the European Central Bank’s decision, after New York trade overnight was boosted by tech shares.
The FTSE 100 index climbed 63.71 points, 0.8%, at 8,257.65. The FTSE 250 was up 233.47 points, 1.1%, at 20,770.72, and the AIM All-Share rose 2.91 points, 0.4%, at 741.00.
The Cboe UK 100 was up 0.8% at 826.13, the Cboe UK 250 rose 1.0% to 18,266.64, and the Cboe Small Companies added 0.4% at 16,684.22.
In European equities on Thursday, the CAC 40 in Paris was up 0.8%, while the DAX 40 in Frankfurt added 1.3%.
‘The FTSE 100 bounced back sharply on Thursday following a strong session in Asia and Wall Street overnight, after US inflation fell to its lowest level in more than three years,’ AJ Bell analyst Russ Mould commented.
‘This has left the way clear for interest rate cuts in the US. A 50 basis-point cut by the Fed seems to be off the table for now as recession fears have eased, meaning a quarter percentage point reduction seems the likely outcome.’
The pound was quoted at $1.3056 early Thursday afternoon, up from $1.3026 at the time of the London equities close on Wednesday. The euro stood at $1.1021, up from $1.1013 late Wednesday. Against the yen, the dollar was trading at JP¥142.62, up from JP¥141.58.
The European Central Bank is expected to announce a second interest rate cut of the cycle at 1315 BST. Market focus will also be on forward guidance and macroeconomic projections.
SPI Asset Management analyst Stephen Innes commented: ‘The big event in the FX world today is the ECB meeting. Traders are eagerly waiting to see if the bank leans hawkish or dovish, potentially endorsing an October rate cut. The outcome will dictate whether EUR/USD dives below 1.1000 or rallies towards 1.1100, with euro bulls hoping for a more restrained ECB stance.
‘While I don’t expect ECB President Christine Lagarde to wax overly dovish—she’s always cautious about protecting the euro—the euro remains one of the dirtier laundry items in FX’s basket. It will take a mix of better EU data surprises or continued US data misses to spark life in the euro bulls. That said, with the euro slightly oversold, there’s room for a EUR/USD bounce if the ECB walks back market expectations for an October rate cut.’
Stocks in New York are called to open higher. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite are all called up 0.2%.
In London, miners helped push the FTSE 100 higher. Anglo American added 3.8%, Glencore rose 2.9% and Antofagasta gained 2.6%.
Diageo rose 2.2% after Bank of America raised the stock to ’buy’ from ’neutral’.
There was no bounce back for Rentokil shares. The pest control and hygiene company lost another 2.1%, after slumping 20% on Wednesday.
Trainline shares jumped 11%. It said it is performing ahead of expectations and the rail ticketing platform upped its outlook.
Revenue in the half-year ended August 31 climbed 16% to £229 million from £197 million. Net ticket sales amounted to £3.00 billion, a rise of 13% on-year from £2.65 billion.
‘As Europe’s number one rail app, our strong performance shows how our relentless focus on innovation is helping more customers to choose digital ticketing. Competition between rail carriers is growing across Europe and as the aggregator of choice we deliver the value and convenience customers want. This is most clearly demonstrated in Spain, where we have tripled net ticket sales in the last two years, with over one million customers transacting in the last 12 months alone,’ Chief Executive Officer Jody Ford said.
In May, the firm forecast full-year net ticket sales growth between 8% and 12% and a revenue rise between 7% and 11%. It predicted adjusted earnings before interest, tax, depreciation, and amortisation of between 2.4% and 2.5% of net ticket sales. Now, Trainline expects net ticket sales and revenue to be at the top end of the forecast, and the adjusted Ebitda to exceed it.
Marlowe rose 6.9%. It announced it will demerge its occupational health division, which will join the AIM market.
The unit, a provider of ‘technology enabled corporate health and wellbeing solutions’, will take on the name Optima Health and the plan is for it to begin trading on AIM later this month.
Marlowe, a provider of software and services for safety and regulatory compliance, said the demerger will be completed via a dividend in specie.
Shareholders are to receive one Optima Health share for every existing Marlowe share owned.
‘The demerger will allow the respective boards of Marlowe and Optima Health to explore strategies tailored to their distinct end markets, providing greater flexibility with which to maximise shareholder value.,’ Marlowe Interim Non-Executive Chair Michael Ashcroft said.
Optima Health, which is set for an AIM debut on September 26, ‘has no intention to raise new capital’, the soon to be demerged entity said.
Brent oil was quoted at $71.60 a barrel early Thursday afternoon, rising from $70.32 late Wednesday. The price of gold climbed to $2,514.13 an ounce, from $2,512.09.
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