European stocks were higher on Thursday midday, as investors prepare for a US GDP print, while top US White House aide Jake Sullivan met Chinese President Xi Jinping in Beijing.
The FTSE 100 index was up 24.13 points, or 0.3%, at 8,367.98. The FTSE 250 was up 42.84 points, or 0.2%, at 21,109.71, and the AIM All-Share was up 2.36 points, or 0.3%, at 772.66.
The Cboe UK 100 was up 0.3% at 836.44, the Cboe UK 250 was up 0.2% at 18,601.22, and the Cboe Small Companies was down 0.2% at 16,981.72.
‘The FTSE 100 ticked higher despite a technology-led sell-off in the US overnight and a negative after-hours reaction to Nvidia’s results – the lack of tech stocks in the UK index proving a rare boon on Thursday morning,’ said AJ Bell’s Russ Mould.
‘Later today the market will absorb a second estimate of US GDP – with investors hoping for further evidence of a soft landing for the economy as the Federal Reserve readies its first interest rate cut of the current cycle.’
According to Atlanta Fed’s GDP Now forecast, the US economy is expected to have grown 2.8% in the second quarter, but price pressures are expected to have eased. Additionally, growth in the third quarter has likely slowed to 2%, added Swissquote Bank’s Ipek Ozkardeskaya.
‘Therefore, even a figure in line with expectations may not discourage the Fed doves, if the price pressures continue to show further progress. In Europe, tomorrow’s figures are expected to confirm a further slowdown in inflation – combined with the sluggish economic data from the old continent – could reinforce the expectations that the European Central Bank could cut more than the 50 basis point cut baked in the market prices,’ explained Ozkardeskaya.
In European equities on Thursday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.6%.
According to Destatis, Germany’s employees are continuing to make up for the loss of purchasing power stemming from a period of increased inflation, with second quarter real wages posting an increase for the fifth time in a row.
Salaries between April and June were nominally 5.4% higher than a year earlier, while consumer price inflation during this period was only 2.3%. This means there was real wage increase of 3.1%
Separate data from the ifo Institute for Economic Research predicted a slight decline in inflation rates in the near future, with the overall rate likely to remain below the 2% mark targeted by the European Central Bank.
Meanwhile, sentiment in eurozone businesses picked up in August, official data showed on Thursday, though consumer confidence trended lower.
The economic sentiment indicator picked up slightly to 96.6 in August, from 96.0 in July. The reading was better than the market consensus of 95.8, as cited by FXStreet.
The eurozone consumer confidence indicator fell to minus 13.4 in August from minus 13.0 in July, short of the long-term average.
The pound was quoted at $1.3185 at midday on Thursday in London, lower compared to $1.3204 at the equities close on Wednesday. The euro stood at $1.1090, lower against $1.1128. Against the yen, the dollar was trading at JP¥144.51, up compared to JP¥144.38.
In the FTSE 100, GSK was up 0.5%.
The pharmaceutical firm has received approval from the European Commission for Arexvy, its respiratory syncytial virus vaccine, for adults aged 50 to 59. The vaccine immunises patients to prevent lower respiratory tract disease, which is caused by respiratory syncytial virus.
It has been approved in Europe for adults over 60 since June last year. The news follows approval in the US, with other countries - including Japan - expected to grant permission later this year.
In the FTSE 250, Grafton Group was down 0.1%.
For the six months ended June 30, the firm reported pretax profit of £71.7 million, down 23% from £93.6 million a year prior. Revenue fell 4.4% to £1.14 billion from £1.19 billion the year before. Nevertheless, Grafton upped its interim dividend by 5.0% to 10.5 pence from 10p.
Chief Executive Officer Eric Born said: ‘Whilst uncertainties remain in the short term, our medium-term outlook remains positive...At this point in the year, with the important Autumn trading season yet to come, we continue to anticipate delivering adjusted operating profit for 2024 in line with analysts’ expectations.’
On AIM, essensys was up 11%.
The London-based provider of software and cloud services saw its shares jump, after announcing that it expects full-year revenue, as well as adjusted earnings before interest, tax, depreciation and amortisation, to be above market expectations.
For the year ended July 31, essensys expects to report revenue of £24.0 million, and an adjusted Ebitda loss of no more than £900,000, narrowed from £6.1 million a year prior.
Kazera Global jumped 21%.
The London-based investor in early-stage mineral projects in Africa said that an on-site inspection of its Whale Head Minerals operation was completed on August 23.
The inspection was carried out by a consultant on behalf of the National Nuclear Regulator. Kazera has now started collecting mining sample for processing, and to distribute to potential off-takers for analysis.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.5%, while the S&P 500 index and the Nasdaq Composite were seen up 0.1%.
In politics, US Vice President Kamala Harris sets her sights on a swing state, as she heads to Georgia on the next leg of the campaign trail.
Riding on the momentum from her star turn in Chicago last week, Harris and her running mate Tim Walz are hitting a battleground that they believe is in play since she replaced Joe Biden as the party’s nominee.
After Biden flipped Georgia in 2020 for the first time in three decades, ‘we’re seizing on the energy and putting in the work to win again in 2024,’ Harris’s campaign said.
Further abroad, Top White House aide Jake Sullivan raised the importance of stability in the Taiwan Strait and South China Sea while planning more direct military talks in a rare one-on-one with a senior Chinese army official on Thursday.
Sullivan arrived in Beijing on Tuesday, the first US national security advisor to visit China since 2016, for three days of talks with Foreign Minister Wang Yi and other high-ranking officials.
He expressed ‘concerns about (Chinese) support for Russia’s defence industrial base’ – echoing longstanding US claims that Beijing has rejected, the White House said.
Chinese President Xi Jinping told top White House aide Jake Sullivan that Beijing remained committed to good ties with the US, despite ‘great changes’.
Sullivan met with Xi as he wrapped up three days of talks in the Chinese capital. His visit comes as China is embroiled in security rows with US allies Japan and the Philippines.
But state broadcaster CCTV said Xi told Sullivan that in spite of ‘great changes’, China and the US could still enjoy good ties.
‘China’s commitment to the goal of stable, healthy, and sustainable development of China-US relations hasn’t changed,’ Xi said.
Brent oil was quoted at $77.44 a barrel at midday in London, down from $78.91 late Wednesday.
Gold was quoted at $2,521.50 an ounce, up against $2,507.11.
Still to come on Thursday’s economic calendar, there is a whole handful of data from the US, including initial jobless claims, personal consumption expenditures, and GDP.
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