Equities and currencies were hardly changed on Thursday at midday in London, as traders hunkered down ahead of some big data reports and three major central bank decisions next week.
The FTSE 100 index was down just 0.75 of a point at 7,488.44. The FTSE 250 was down 35.42 points, 0.2% at 18,895.15, and the AIM All-Share was down 2.40 points, 0.3%, at 832.13.
The Cboe UK 100 was down 0.2% at 749.36, the Cboe UK 250 was down 0.6% at 16,294.34, and the Cboe Small Companies was down 0.3% at 12,970.39.
In European equities on Thursday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was down 0.3%.
‘With relatively few economic announcements today, attention is likely to turn to producer prices and consumer sentiment data from the US tomorrow. These should help set the scene ahead of next week’s decision from the US Federal Reserve,’ said AJ Bell’s Russ Mould.
The US central bank will announce its latest interest decision on Wednesday next week. The Federal Open Market Committee starts its two-day policy meeting on Tuesday, a day that also will see the release of the US consumer price index for November. Inflation was a still-elevated 8.0% in October.
The Bank of England and European Central Bank follow with rate decisions of their own on Thursday
Sterling was quoted at $1.2166 midday in London on Thursday, edging down from $1.2194 at the London equities close on Wednesday.
Deutsche Bank said it expects the BoE’s Monetary Policy Committee to raise the UK bank rate by 50 basis points to 3.5%, slowing the pace of hikes from 75 points last month. ‘Given the dovish messaging from the MPC since November, risks are skewed to bank rate peaking closer to 4% than 5%, in spite of our inflation (and labour market) concerns.’
The euro traded at $1.0508 early Thursday, flat from $1.0506 late Wednesday. Against the yen, the dollar was quoted at JP¥136.83, up slightly versus JP¥136.56.
In the FTSE 100, miners were leading the gains, as the demand outlook for commodities from China improved. Fresnillo was up 3.4%, Rio Tinto up 2.5%, and Antofagasta added 1.7%.
China has started relaxing its strict ‘zero-Covid’ policy amid steps to restore normal life.
The National Health Commission issued relaxed anti-pandemic regulations on Wednesday, including a loosening of lockdowns and the elimination of a requirement for a recent negative Covid-19 test to be shown to enter most public places.
China has not formally abandoned ’zero Covid’, which seeks to track and eliminate all infections, but its recent steps seem to indicate it is dropping the policy in all but name.
The improved outlook for China boosted Asia-focused insurer Prudential, which rose 1.8%.
Hargeaves Lansdown added 2.3%, as it named Dan Olley as its new chief executive from 2023. Olley is currently CEO at customer data science firm Dunnhumby. He has been a non-executive director at HL since June 2019. Olley succeeds Chris Hill, who announced his intention on October 17 to retire after six years in the role.
Sports Direct-owner Frasers Group was down 9.8%.
Frasers said revenue rose 13% to £2.64 billion in the six months to October 23 from £2.34 billion a year prior, largely due to acquisitions. Excluding acquisitions by the retailer, revenue fell 3.1%, mostly down to a reduction at video games retailer Game UK and a strong comparator after shops reopened from lockdown in March 2021. Pretax profit jumped 53% to £284.6 million from £186.0 million.
‘Frasers loves an acquisition or three and the purchase of various companies has helped to drive sales over the past year. Much more interesting is how profit has shot up, which shows the company is able to make good money from its expanding empire and offer the type of products that consumers are still eager to buy,’ AJ Bell’s Mould considered.
Frasers reiterated its guidance for adjusted pretax profit of £450 million to £500 million, but noted a ‘challenging’ macroeconomic environment. ‘The backdrop for the coming year is hard to predict with any certainty,’ it conceded.
DS Smith added 1.2%, as the packaging maker reported a strong half-year ended October 31.
DS Smith said revenue rose 28% to £4.30 billion from £3.36 billion a year before, lifting pretax profit by 82% to £322 million from £177 million. It now expects its full-year performance to be ahead of previous expectations, and the second half to be consistent with the first. It announced an interim dividend of 6.0 pence per share, up 25% from 4.8p a year before.
Oil major BP rose 1.1%, as signed a memorandum of understanding with the Egyptian government to explore the potential for a new green hydrogen production facility in the country.
BP also said it will roll out electric vehicle charge points at 70 Marks & Spencer stores in the next two years. BP said the roll-out of high-speed charge points would significantly expand BP pulse’s network, adding up to 40,000 kilowatt-hours of EV charging capacity to existing UK infrastructure, via installing up to 900 bp pulse charging points.
M&S was down 1.1%.
Oil prices remained subdued, as Brent oil fetched $77.52 a barrel, a touch lower than $78.00 late on Wednesday. Gold was quoted at $1,784.85 an ounce, little changed from $1,783.10.
In the FTSE 250, construction firm Balfour Beatty rose 3.8%. The firm said annual profit is expected to be ahead of expectations, following positive net interest income and the recognition of deferred tax assets reducing its tax charge for the year.
Revenue is expected to grow by 5% from £8.3 billion in 2021, and the year-end order book is forecast to grow 5% from £16.1 billion a year before, due to favourable foreign exchange movements.
On AIM, Pantheon Resources fell 11%.
The Alaska-focused oil and gas company based in London said that oil service company Schlumberger had produced the static and dynamic reservoir model, covering Pantheon’s four oil reservoirs within its acreage footprint: Alkaid, the Slope Fan System, the Shelf Margin Deltaic and the Basin Floor Fan System.
The reservoir modelling had estimated that a total of 17.80 billion barrels of oil was contained in the company’s reservoirs, including 1.67 billion at the Alkaid unit. This fell short of a previous company estimate, which had suggested that there were 23 billion barrels of oil in place at its four reservoirs.
Stocks in New York are called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.2%.
By Elizabeth Winter, senior markets reporter
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