Stocks in London ended in the red on Wednesday, despite the FTSE 100 hitting another record high earlier in the day, while Tesla was the star in New York, where wider markets mixed.
The FTSE 100 index gave back 4.43 points, 0.1%, at 8,040.38. The blue-chip index traded as high as 8,092.19 earlier Wednesday, its best-ever level. Selling pressure in the afternoon prevented it from achieving another closing high, however.
The FTSE 250 closed down 80.35 points, 0.4%, at 19,719.37, and the AIM All-Share edged down just 0.18 of a point, at 754.69.
The Cboe UK 100 ended down 0.1% at 802.78, the Cboe UK 250 closed down 0.6% at 17,058.08, while the Cboe Small Companies closed up 0.3% at 15,320.47.
In European equities on Wednesday, the CAC 40 in Paris closed down 0.2%, while the DAX 40 in Frankfurt fell 0.3%.
A stronger pound, which has been given some impetus following hawkish comments from a UK central banker, kept a lid on the FTSE 100. London’s blue-chip index is stacked with international earners.
The pound was quoted at $1.2432 at the time of the London equities close on Wednesday, down slightly from $1.2440 at the equities close on Tuesday, but it had traded as high as $1.2464 earlier Wednesday, however.
The Bank of England’s Chief Economist Huw Pill on Tuesday said interest rate cuts are ‘somewhat closer’ than last month, though he added the economic outlook has ‘not changed substantially’ and there are still risks if bank policymakers reduce rates too early.
ING analyst Francesco Pesole commented: ‘Markets have received further indications of how divided the MPC is at the moment. Yesterday, Chief Economist Huw Pill said there is a ’reasonable way to go’ before he is convinced that underlying price pressures have been tamed. As things stand now, it looks like at least four of nine MPC members are dissenting against the recent dovish rhetoric.
‘Still, an August 25bp decrease remains fully priced in.’
The euro stood at $1.0687 late Wednesday, lower against $1.0699 at the same time on Tuesday. Against the yen, the dollar was trading at JP¥155.06, up compared to JP¥154.77. The dollar’s stride against the yen recently has made currency intervention a possibility, Pepperstone analyst Michael Brown said.
Brown added: ‘USD/JPY has risen north of the 155 figure this afternoon for the first time since 1990, further heightening the risk of MoF intervention to prop up the value of the JPY, with officials having already indicated their preparedness to step in and lean against what they view as potentially ’excessive’ moves in the currency. While the precise level at which intervention will take place remains unknown, such a situation is becoming an increasingly high probability.’
In New York, the Dow Jones Industrial Average was down 0.4% at the time of the closing bell in London. The S&P 500 fell 0.1%, while the Nasdaq Composite added 0.2%.
Tesla shares shot up 12%.
XTB analyst Kathleen Brooks commented: ‘Everyone knew that Tesla earnings for Q1 would be bad, and indeed they were. Earnings per share, revenues and adjusted net income were all lower than expected. However, the market is forward-looking, and, so far, it is willing to trust Musk’s vision for the EV maker.’
Tesla said GAAP net income tumbled 53% to $1.13 billion in the first three months of 2024, down from $2.51 billion a year prior. Diluted GAAP earnings per share also fell 53% to $0.34 from $0.73.
First quarter revenue slid 8.7% to $21.30 billion from $23.33 billion.
In London, Reckitt shares rose 2.9%. The Slough, England-based consumer goods maker reported a strong start to 2024 for its Hygiene business, offsetting a significant decline in Nutrition and allowing the company to maintain its guidance for annual revenue and profit growth.
Reckitt reported 1.5% net revenue growth on a like-for-like basis in the first quarter of 2024 from a year before. This was composed of a 0.5% decline in volume that was more than offset by a 2.0% increase from pricing and sales mix.
Within this, the Hygiene business recorded the stand-out revenue performance, with 7.1% like-for-like growth, thanks to a 2.9% rise in volume and a 4.2% benefit from price and mix.
Also shielding the FTSE 100 from a heftier decline on Wednesday, miners ended higher. Anglo American closed the best of the lot, up 4.5%. It had lost 2.3% on Tuesday. Shares are up some 10% so far in 2024, supported by robust base metals prices.
Putting pressure on the FTSE was the interest rate sensitive housebuilding sector, on the back of Pill’s comments. Persimmon fell 3.2% and Barratt lost 0.8%.
Burberry fell 2.6% in a negative read-across after a poorly-received trading statement from luxury goods peer Kering. Kering lost 6.4% in Paris.
PZ Cussons shot up 5.9% after it said it intends to sell its self-tanning brand, St Tropez, and review its African operations, as part of a strategic drive to improve shareholder returns.
The Manchester, England-based consumer goods company owns brands such as Carex and Imperial Leather.
It said a strategic review had concluded that in addition to the challenges of its significant exposure to Nigeria, the group is ‘too complex’ for its size, ‘with financial and human resources spread too thinly to generate consistent returns’.
PZ Cussons said it while there remain long-term growth opportunities for St Tropez, these will be ‘harder to realise’ under its ownership, given the need to allocate resources across a diverse geographic and category footprint.
‘We therefore plan to realise shareholder value by initiating a process to sell the brand to an owner better placed to capture the brand’s significant long-term potential,’ the company said.
Elsewhere, medical diagnostics provider Angle jumped 28% after it said it has signed a supplier agreement with FTSE 100-listed pharmaceutical firm AstraZeneca.
The AIM listing explained that the contract is to develop and validate a methodology leveraging Angle’s existing DNA damage response assay for the detection of micronuclei in CTCs as a measure of DDR.
Chief Executive Andrew Newland commented: ‘This is Angle’s second large pharma company agreement of 2024 as we look to drive a significant expansion of the pharma services business. It demonstrates the importance of CTC analysis and is a validation of Angle’s Parsortix system. Angle is also working to expand its DDR work with other large pharma customers and continues to generate significant new customer interest through its business development activity.’
Brent oil was quoted at $88.12 a barrel late in London on Wednesday afternoon, up from $87.76 late Tuesday. Gold was quoted at $2,329.42 an ounce, up against $2,322.78.
In the world of technology, TikTok’s boss said a US law signed on Wednesday by US President Joe Biden was an effective ban of the social media company and would be fought in court.
‘Make no mistake, this is a ban. A ban on TikTok and a ban on you and your voice,’ Shou Zi Chew said in a video message posted on TikTok.
The passage of a $95 billion package also includes military aid for Ukraine.
TikTok, meanwhile, announced the suspension of a feature in its spinoff TikTok Lite app in France and Spain that rewards users for watching and liking videos, after the EU launched a probe.
Following the Chinese-owned company’s statement, posted on X, the former Twitter, the European Commission’s top tech enforcer, Thierry Breton, said the EU investigation would continue. ‘Our children are not guinea pigs for social media,’ he said.
Closer to home, the UK’s competition regulator has asked for comments from interested parties on a range of partnerships between major tech and AI firms and whether they could breach merger or competition rules.
The Competition & Markets Authority said it was interested in hearing views on partnerships between Microsoft and Mistral AI, Amazon and Anthropic, and Microsoft’s recent hiring of senior figures from Inflection AI.
Earlier this month, the CMA published a report outlining the potential risks to open, fair and effective competition in the AI market.
It specifically identified what it called an ‘interconnected web’ of more than 90 partnerships and strategic investments between a small handful of the biggest tech and AI firms, a set-up it warned could be used to consolidate power and resources within the sector.
Thursday’s economic calendar has a US gross domestic product reading at 1330 BST.
The local corporate calendar has first-quarter results from AstraZeneca, lender Barclays, consumer goods firm Unilever and FTSE Russell owner London Stock Exchange Group. Grocer Sainsbury’s reports annual results.
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