The FTSE 100 closed in the green on Thursday, following positive updates from some of London’s large-cap constituents.
The FTSE 100 index rose 40.86 points, 0.5%, at 8,071.19. The FTSE 250 closed up 163.80 points, 0.8%, at 20,522.81. The AIM All-Share advanced 0.09 of a point to 729.38.
The Cboe UK 100 climbed 0.5% at 811.74, the Cboe UK 250 climbed 0.9% at 17,950.10 and the Cboe Small Companies fell 1.1% to 15,740.67.
In Europe on Thursday, the CAC 40 in Paris rose 1.3% while the DAX 40 in Frankfurt jumped 1.4%
Minutes from the last European Central Bank meeting showed interest rates were cut last month to avert unnecessary damage to the economy, as policymakers took the view that they could pause a December cut if activity picked up.
The central bank‘s governing council gave unanimous support to October’s decision to cut rates by 0.25 percentage points to 3.25%, arguing that ‘the disinflationary trend was getting stronger’ and that it was important to avoid ‘harming the real economy by more than was necessary’.
On Thursday, data showed economic growth picked up in the eurozone in the third quarter but industrial production slumped in September.
Across the pond, US markets mostly edged lower in early trading. The Dow Jones Industrial Average was just in the green, the S&P 500 was 0.1% lower as was the Nasdaq Composite.
Amid the mixed start in New York, Disney rose 6.9% after better-than-expected fourth quarter results as revenue and adjusted earnings per share beat forecasts. The firm also issued upbeat guidance for financial 2025, above expectations.
Figures in the US showed annual US producer prices picked up more quickly than anticipated in October, while unemployment fell more than expected.
Producer price inflation picked up to 2.4% on-year in October from 1.9% in September, the US Bureau of Labor Statistics said. September’s number was upwardly revised from 1.8%. October’s figures were higher than the acceleration to 2.3% factored in by the FXStreet-cited consensus.
Core annual producer price inflation which excludes food, energy and trade, picked up to 3.5% in October from 3.3% in September.
Monthly, producer prices rose 0.2% in October, up from 0.1% in September, the latter of which was upwardly revised from previously reported no change. October’s figure was in line with the consensus.
Separately, the Department of Labor reported that initial jobless claims declined in the recent week, and were below expectations.
Initial jobless claims in the week to November 9 amounted to 217,000, fading from the prior week’s unrevised level of 221,000.
Capital Economics said the price data released this week suggest that inflationary pressures are proving stronger than the Fed anticipated.
It calculates that the Fed‘s preferred core PCE deflator price measure increased at an above-target rate for the second month running in October.
Bank of America said given today’s PPI report and yesterday’s CPI data, it expects core PCE inflation to increase by 0.3% on-month. The annual rate should rise to 2.8% from 2.7%.
‘If our forecast proves correct, it will mark two consecutive uncomfortably high prints as the Fed seeks to return inflation to its 2% target,’ BofA said.
‘That said, we still expect the Fed to cut rates by 25bp in December, but the risk appears to be tilting towards a shallower cutting cycle given resilient activity and stubborn inflation.’
The data gave additional support to an initially rampant dollar. However, the greenback’s latest rally ran out of steam as the trading session progressed.
The initial gains followed confirmation that the Republicans have won a majority in the House of Representatives, securing a governing trifecta - when the president’s party also controls both chambers of Congress.
Brown Brothers Harriman said Trump will now face ‘limited’ political resistance to implementing his fiscal and regulatory wish list.
‘As a result, investors should continue to lean into dollar strength,’ it said.
The pound was quoted at $1.2713 late on Thursday afternoon in London, little changed compared to $1.2714 at the equities close on Wednesday. It had traded as low as $1.2631 earlier in the session, however.
The euro stood at $1.0576, up against $1.0568, and recovering from lows of $1.5000.
Against the yen, the dollar was trading higher at JP¥155.81 compared to JP¥155.24.
In London, Bank of England policymaker Catherine Mann said the bank could move ‘forcefully’ on interest rates once it had obtained enough evidence that inflation had been subdued.
In the face of uncertainties, she said in a speech at the Society of Professional Economists’ annual conference, ‘waiting buys time to learn more about developments, to make a better assessment of whether the inflation risk has subsided sufficiently to justify changing the policy stance’.
‘In the current context, an activist stance holds the policy rate firmly until sufficient evidence on diminished inflation persistence is revealed; and then to move forcefully.’
Mann voted to keep rates on hold at last week’s meeting, when the bank voted 8-1 to cut rates by a quarter of a percentage point to 4.75%.
On the FTSE 100, well received updates lifted B&M, Aviva, Spirax and United Utilities.
B&M European Value Retail said it was well prepared for the ’golden quarter’ despite seeing half-year profit fall in the face of tough comparatives.
Shares rose 5.1% as the firm said trading had picked in the UK in the second quarter and it said new stores were performing ‘exceptionally well’.
Insurer Aviva climbed 4.4% as it reported strong trading in the third quarter leaving it confident of hitting its medium-term targets.
Chief Executive Amanda Blanc said trading continues to be ‘extremely positive right across the business.’
United Utilities rose 3.3% despite a drop in first half profit. Revenue rose, however, and the group lifted the half-year payout by 4.1%.
Spirax was also in the green, up 4.2%. It said its outlook for all of 2024 is unchanged, following organic sales growth in the first 10 months.
Elsewhere, the star of the show was Burberry, up 20%, which announced a strategic revamp as it reported a half-year loss.
New Chief Executive Joshua Schulman outlined a new strategic plan, ’Burberry forward’, aimed at reigniting the brand by returning to its roots as a quintessentially British luxury house.
RBC Capital Markets said the focus on heritage and outerwear is what ‘we have been waiting for in terms of strategy as it offers more authenticity in a less competitive category in our view’.
Elsewhere, Dr Martens increased 6.2% as Goldman Sachs upgraded to ’neutral’ from ’sell’, but Keller fell 9.5% as it flagged tricky trading conditions in Europe.
Brent oil rose to $72.43 a barrel at the time of the London equities close on Thursday, up from $72.32 late Wednesday.
The price of gold was $2,576.68 an ounce late Thursday afternoon, down from $2,591.88 at the same time on Wednesday.
Friday’s local corporate calendar sees half-year results from property firm, Land Securities.
The global economic calendar has UK GDP data at 0700 GMT.
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