European blue chip stocks were lower on Tuesday morning as investors awaited a consumer price inflation print from the eurozone.
The FTSE 100 index opened down 36.75 points, 0.4%, at 8,320.19. The FTSE 250 was up 31.12 points, 0.2%, at 21,188.59, and the AIM All-Share was up just 0.34 of a point at 776.93
The Cboe UK 100 was down 0.5% at 831.41, the Cboe UK 250 was up 0.2% at 18,591.03, and the Cboe Small Companies was down 0.5% at 16,777.07.
In European equities on Tuesday, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was down 0.3%.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, the S&P 500 up 1.0% and the Nasdaq Composite up 1.4%.
Investors will have to wait until Friday for the main event of the week when US Federal Reserve Chair Jerome Powell speaks at the Jackson Hole economic symposium.
The annual gathering, which runs for three days, is hosted by the Federal Reserve Bank of Kansas City at Jackson Hole, Wyoming, and attended by central bankers from around the world.
Powell will address the conference on Friday amid mounting expectations that the start of US interest rate cuts is imminent.
‘The week kicked off on a positive note on expectation that when Federal Reserve (Fed) Chair Jerome Powell speaks at the Jackson Hole meeting on Friday, he will deliver a strong hint that the rate cuts will begin soon in the US,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
‘How soon? Probably in September? By how much? Probably a reasonable 25bp? Would the markets be upset with the idea of a 25bp cut instead of a 50bp? Probably not, because a 50bp cut would require a severe economic slowdown, a crisis or a panic mode, which is not good for risk appetite. Therefore, the best of both worlds would be the hint of a 25bp cut that would keep the market mood in the sweet soft-landing spot.’
In China, the Shanghai Composite was down 1.0%, while the Hang Seng index in Hong Kong was down 0.5%.
China’s central bank left its key lending benchmark rates unchanged as expected on Tuesday.
The People’s Bank of China left its one-year loan prime rate at 3.35%, as anticipated according to the FXStreet-cited consensus, as well as the consensus of Bloomberg-surveyed economists. The five-year loan prime rate was kept at 3.85%.
In July, the central bank surprised the market with an interest rate cut, when it decided to lower the one-year loan prime rate, which serves as the benchmark for corporate loans, to 3.35% from 3.45%. The five-year loan-prime rate had been cut to 3.85% from 3.95% that month.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 1.8%. The S&P/ASX 200 in Sydney closed up 0.2%.
The pound was quoted at $1.3003 early on Tuesday in London, up compared to $1.2980 at the equities close on Monday. The euro stood at $1.1086, higher against $1.1063. Against the yen, the dollar was trading at JP¥146.53, slightly lower compared to JP¥146.55.
In the FTSE 100 index, oil majors BP and Shell were trading at the bottom of the index, falling 1.7% and 1.5%, respectively.
Brent oil was quoted at $76.96 a barrel early in London on Tuesday, down from $79.33 late Monday.
Antofagasta edged up just 0.2%, after it cut its dividend as profits suffered.
The London-based mining firm focused on Chile said pretax profit in the six months to June 30 fell 6.8% to $712.6 million from $764.5 million a year prior. In contrast, revenue edged up by 2.3% to $2.96 billion from $2.89 billion.
Total operating costs increased to $2.28 billion from $2.12 billion.
Antofagasta cut its interim dividend by 33% to 7.9 US cents from 11.7 cents. This is equivalent to a pay-out ratio of 35% of underlying net earnings and is in line with the company’s capital allocation framework.
Looking ahead, Antofagasta expects demand for copper to grow by between 2% and 3% per year through to 2030. ‘Rising demand for copper is primarily driven by the energy transition, with electric vehicles, renewable power and related infrastructure providing support to global copper prices,’ it said.
The company said a range of growth projects will provide incremental growth in the medium-term, which is expected to grow output to around 900,000 tonnes of copper production.
In the FTSE 250, John Wood shed 0.2%.
The oil field services firm reported that revenue in the first half of the year fell by 4.8% to $2.84 billion from $2.99 billion a year earlier.
John Wood’s pretax loss from continuing operations widened to $961.7 million from $26.0 million. It explain that the loss was due to accounting for exit from turnkey and large-scale EPC work. Further, it has took a non-cash goodwill impairment in Projects due to legacy acquisitions.
On London’s AIM, i3 Energy shares jumped 26% to 12.11p, after Gran Tierra announced plans to takeover the firm. Gran Tierra shares rose 7.8%.
The acquisition implies a value of 13.92 pence per i3 Energy Share and approximately £174.1 million for the total share capital of i3, whose shares had closed at 9.63p each on Monday, giving it a market capitalisation of £115.8 million.
Gran Tierra said it expects takeover of i3 Energy to become effective in the final quarter of the year.
It added that i3 Energy directors consider terms of acquisition ‘fair and reasonable.’
Also catching headlines is the search for British technology tycoon Mike Lynch and his daughter. The search will resume on Tuesday after a luxury yacht sank in a tornado off the coast of Sicily.
The pair are among six tourists missing after the yacht, named Bayesian, was battered during intense storms off the coast of Palermo in the early hours of Monday.
Lynch, who founded software firm Autonomy in 1996, was in June was cleared of conducting a massive fraud relating to an $11 billion sale to US company Hewlett Packard.
Gold was quoted at $2,509.20 an ounce, higher against $2,503.87.
Still to come on Tuesday’s economic calendar, there is a eurozone consumer price inflation reading at 1000 BST.
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