London and other European markets followed Asia and the US higher early Wednesday, reopening after a four-day weekend with fresh impetus, after a US inflation report added to hopes for interest rate cuts in the new year.
The FTSE 100 index opened up 50.73 points, 0.7%, at 7,748.24. The FTSE 250 was up 60.43 points, 0.3%, at 19,691.38, and the AIM All-Share was up 1.44 points, 0.2%, at 755.84.
The Cboe UK 100 was up 0.5% at 772.71, the Cboe UK 250 was up 0.4% at 17,179.17, and the Cboe Small Companies was up 0.1% at 14,743.26.
In European equities, the CAC 40 index in Paris and the DAX 40 in Frankfurt were both up 0.4%.
In the US on Tuesday, Wall Street ended higher. The Dow Jones Industrial Average and the S&P 500 index both closed up 0.4%. The Nasdaq Composite added 0.5%.
After the early close in London on Friday, data from the US showed inflation eased a bit more in November.
The Bureau of Economic Analysis said the core personal consumption expenditures price index rose annually by 3.2% in November, slowing from 3.4% in October, which was first reported at 3.5%. The latest figure was just below the FXStreet-cited market consensus of 3.3%.
The core reading, the Fed’s preferred inflation gauge, does not include food or energy.
‘A moderation in headline and core inflation has created a pathway for central banks to ease off on restrictive policies. As inflation subsides, the Federal Reserve sees higher real rates becoming increasingly economically unfavourable, possibly reducing the necessity for policy rates to remain in prohibitive territory,’ said SPI Asset Management’s Stephen Innes.
The dollar lost ground against the pound and the euro over the long holiday weekend in Europe but made gains against the yen.
Sterling was quoted at $1.2723 early Wednesday, higher than $1.2719 at the London equities close on Friday. The euro traded at $1.1047, up from $1.1019. Against the yen, the dollar was quoted at JP¥142.47, up versus JP¥142.14.
In London on Wednesday, AstraZeneca added 1.6%.
Astra announced on Tuesday it has agreed to buy Nasdaq-listed Gracell Biotechnologies and will pay about $1.2 billion for the clinical-stage company. The Cambridge, England-based pharmaceutical company said it expects the acquisition to close in the first quarter of 2024.
Gracell is a Suzhou, China-based biopharmaceutical firm developing cell therapies for cancer and autoimmune diseases. AstraZeneca will pay $2.00 per share, or $10.00 per American depositary share, for Gracell at closing, plus $0.30 per share ‘upon achievement of a specified regulatory milestone’.
The upfront cash portion represents a transaction value of around $1.0 billion, with the total value being about $1.2 billion if the milestone is achieved. Gracell ADSs closed up 60% at $9.92 in New York on Tuesday.
Elsewhere in the FTSE 100, miners were making gains, with Anglo American up 3.4%, Endeavour up 1.9% and Glencore up 2.0%.
Industrials also were on the rise, with chemicals firm Croda International up 1.6%, equipment rental firm Ashtead up 2.0%, and Spirax-Sarco Engineering up 1.5%.
Elsewhere in London, Canadian Overseas Petroleum jumped 24%, following the resignation of its chief executive officer, John Cowan.
Cowan will remain on the board for the time being while a replacement is found, COPL said. No reason was provided for his resignation.
The oil and gas explorer had a challenging week in the run-up to Christmas, with its shares plunging 70%, following the termination of a letter of intent for the Cole Creek joint venture, and a warning that it will need additional financing from next month.
The stock remains 60% over the past week and 98% over the past year.
On AIM, WH Ireland jumped 9.8% upon releasing interim results.
The stockbroker and wealth manager reported a weaker period for six months that ended September 30, with a sharp drop in revenue and a widened pretax loss. CEO Phillip Wale said this reflected the ‘well documented challenging market backdrop’, in addition to non-recurring costs associated with its refinancing over the summer.
However, market conditions have shown ‘some tentative signs of improvement’ since November, he added, which has enabled WH Ireland to undertake some its largest fundraising in many months across public and private markets. The business delivered underlying monthly profitability in November, he noted.
In Asia on Wednesday, the Nikkei 225 index in Tokyo closed up 1.1%. In China, the Shanghai Composite closed up 0.5%, while the Hang Seng index in Hong Kong was up 1.7% in late dealings.
Tech stocks recovered somewhat from Friday’s sell-off in Hong Kong.
Chinese authorities said they may revise newly drafted online gaming rules, state media reported Saturday.
The draft restrictions published by Beijing’s media regulator on Friday sent shares in tech giants tumbling and wiped tens of billions of dollars off their value, with industry leader Tencent tanking more than 12% in Hong Kong by the close on Friday. Tencent was up 3.9% late Wednesday afternoon.
The S&P/ASX 200 stock index in Sydney closed up 0.8% on Wednesday.
Gold was quoted at $2,066.91 an ounce early Wednesday in London, higher than $2,055.55 shortly after midday in London on Friday. Brent oil was trading at $81.22 a barrel, up from $80.02.
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