The FTSE 100 hit an all-time high on Tuesday, before returning some gains after somewhat hawkish words from a UK monetary policymaker.
The FTSE 100 index closed up 20.94 points, 0.2%, at 8,044.81. The FTSE 250 shot up 200.33 points, 1.0%, at 19,799.72, and the AIM All-Share ended up 5.69 points, 0.8%, at 754.87.
The Cboe UK 100 ended up 0.2% at 803.32, the Cboe UK 250 rose 0.9% to 17,156.66, and the Cboe Small Companies added 1.6% at to 15,282.12.
In European equities on Tuesday, the CAC 40 in Paris closed up 0.8%, while the DAX 40 in Frankfurt jumped 1.6%.
In New York, the Dow Jones Industrial Average was up 0.6%, the S&P 500 shot up 1.1% and the Nasdaq Composite jumped 1.5%.
London’s FTSE 100 hit its record level of 8,076.52 points earlier on Tuesday, though it slipped as the afternoon wore on.
A slight warning on UK interest rates kept the FTSE 100 in check.
The Bank of England’s chief economist has said interest rate cuts are ‘somewhat closer’ than last month.
However, Huw Pill argued the economic outlook has ‘not changed substantially’ and there are still risks if bank policymakers reduce rates too early.
UK interest rates are currently at a 15-year high of 5.25%, after being held at this rate for the past five meetings of the bank’s monetary policy committee.
There has been recent speculation the central bank could start cutting rates, although rate cut predictions were trimmed by many analysts and investors last month after March inflation dipped by slight less than expected.
Ratesetters at the Bank of England have highlighted caution over moving too quickly to bring rates down.
In March, Pill said the bank was ‘some way off’ cutting interest rates.
In a fresh speech in London, the economist said: ‘The combination of little news and the passage of time have brought a bank rate cut somewhat closer.
‘But the same lack of news gives me no reason to depart from the baseline that I already established.’
The pound was quoted at $1.2440 late on Tuesday afternoon in London, up markedly from $1.2336 at the time of the equities close on Monday. The euro stood at $1.0699, up against $1.0642. Against the yen, the dollar was trading at JP¥154.77, virtually unchanged compared to JP¥154.78.
‘Investors are now turning their attention to key economic indicators from the US, with the gross domestic product data set to be released on Thursday and the personal consumption expenditures index on Friday. The data could provide insight into the Federal Reserve’s potential direction in monetary policy,’ Tickmill analyst Joseph Dahrieh commented.
Friday’s US personal consumption expenditures reading is expected to show the annual core PCE inflation measure, the Fed’s preferred gauge, eased to 2.6% in March from 2.8% in February.
In the FTSE 100, AB Foods jumped 9.0%.
In the 24 weeks to March 2, AB Foods reported pretax profit of £881 million, up 37% from £644 million the year prior. Revenue edged up 2.3% to £9.73 billion from £9.56 billion a year before.
AB Foods hiked its interim dividend by a substantial 46% to 20.7p from 14.2p.
‘The group has delivered a strong first half performance and is on track to deliver significant growth in both profitability and cash generation ahead of expectations at the start of this financial year,’ AB Foods said in a statement.
JD Sports rose 3.8%, after it said it has signed a binding agreement to buy US sports fashion retailer Hibbett for just over $1 billion.
The Manchester, England-based sportswear retailer said it will pay $87.50 per Hibbett share in cash. Hibbett is Nasdaq-listed, and its shares closed on Monday in New York at $72.49, up 1.9% on the day, for a $855.14 million market capitalisation.
‘Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the southeastern US, where we currently have a limited presence. It will also provide a stronger platform for the rollout of the JD fascia in the US,’ commented JD Sports CEO Regis Schultz.
Mining shares fell, however. Among them, Anglo American shed 0.4%, Glencore lost 1.3% and Rio Tinto gave back 1.6%
Anglo American said it was ‘pleased’ with its production performance in the first three months of 2024, largely maintaining full-year guidance but cutting its output target for diamond operations.
‘More supply needs to be taken out the market, from both the synthetics and more marginal natural rough, but we do expect the worst for diamonds to be over and a slow recovery to begin. Guidance at its Q1 production has otherwise been maintained, which is a relief as we were concerned that they would need to cut steel making coal numbers like BHP due to wet weather,’ analysts at Liberum commented. ‘Production fine in all other areas and do not expect any downgrades to consensus.’
Petershill Partners surged 11%. It pledged to return up to $100 million to shareholders via a tender offer for its shares.
Petershill is a London-based investment group focussed on private equity and other private capital strategies. The company is operated by Goldman Sachs Asset Management, having been spun off from Goldman Sachs Group Inc in 2021.
Petershill said the tender offer will be made at a price of 214p per share, a 15% premium to Monday’s close.
GB Group shot up 16% after reporting full-year operating profit would beat market expectations.
The Chester, England-based software company specialising in fraud prevention and identity verification expects adjusted operating profit in the year to March 31 to reach £61.2 million.
This is above a company-cited consensus of £60.2 million.
The performance was driven by a focus on simplification and cost-effectiveness delivering £10 million of annualised savings, GB Group said.
GB Group said it expects to report revenue of £277.3 million, up 2.7% on a constant currency basis, at the top-end of the market consensus of £277.8 million.
Videndum declined 2.1%, after the maker of software and hardware for the film industry reported weaker revenue and a swing to loss in 2023. Videndum said US writers and actors strikes, tough market conditions and ‘destocking’ hurt its 2023 outturn.
Looking ahead, Videndum cautioned: ‘Industry confidence in the post-strike recovery remains strong, however the significant pick up in the cine and scripted TV market anticipated in March did not materialise and is now expected from June.’ It continues: ‘The board remains confident that the group will benefit from a strong recovery in the second half of 2024 as the cine and scripted TV market gradually recovers, although the pace and shape of the post-strike recovery is uncertain.’
Brent oil was quoted at $87.76 a barrel late in London on Tuesday, up compared to $86.92 late Monday. Gold was quoted at $2,322.78 an ounce, lower against $2,337.50.
Wednesday’s economic calendar has a US durable goods orders reading at 1330 BST.
The local corporate calendar has quarterly results from lender Lloyds Banking Group and a trading statement from consumer goods company Reckitt Benckiser.
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