Stock prices in London ended higher on Thursday, shrugging off hot inflation data from the US, with Informa lifting the blue-chip index on an agreed unit sale and share buyback.
Figures from the Department of Labor showed the US consumer price index registered 7.5% in January, picking up steam from a rise of 7% in December. The latest annual inflation rate was the highest since February of 1982 and was above market forecasts of 7.3%.
The hot inflation figure ramps up pressure on the Federal Reserve to tighten monetary policy at its meeting next month.
The FTSE 100 index closed up 28.98 points, or 0.4%, at 7,672.40. The mid-cap FTSE 250 index ended up 23.74 points, or 0.1%, at 22,207.75. The AIM All-Share index closed 3.33 points, 0.3%, lower at 1,091.73.
The Cboe UK 100 index ended up 0.4% at 761.69. The Cboe 250 closed up 0.3% at 19,891.71, while the Cboe Small Companies ended 0.7% higher at 15,693.16.
In mainland Europe, the CAC 40 stock index in Paris ended down 0.4% and the DAX 40 in Frankfurt closed 0.1% higher.
‘Whilst Wall Street has been digesting that inflation data, London's markets have been pretty steady, ending on an upbeat note with the FTSE 250 getting a boost from that travel sector once again,’ said Danni Hewson of AJ Bell.
‘Wizz Air, EasyJet and Carnival all landed at the top of the pile despite the drama currently being played out on the world’s stage,’ the analyst said.
ASTRAZENECA/INFORMA BOOST
The FTSE 100 got a boost from share price gains for Informa, on a unit disposal and buyback plans, and AstraZeneca, following strong annual results.
Frankfurt’s DAX, meanwhile, saw strong gains by industrial manufacturing firm Siemens, but weakness from takeaway delivery company Delivery Hero.
The hot US inflation report initially lifted the dollar on Thursday, though the greenback has since wavered.
The pound was quoted at$1.3629 late Thursday, up from $1.3551 at the London equities close on Wednesday. The euro was priced at $1.1488, down from $1.1437. The single currency hit a year-to-date high of $1.1494. Against the Japanese yen, the dollar was trading at ¥115.84, up from ¥115.44.
Stocks in New York were weaker at the London equities close. The Dow Jones Industrial Average was down 0.4%, while the S&P 500 and the Nasdaq Composite were both 0.5% lower.
The Dow was lower despite a 4.3% share price gain for Walt Disney. The entertainment company late Wednesday posted a hefty annual rise in subscriptions of its flagship streaming service. Disney+ subscribers grew 37% annually to 129.8 million from 94.9 million a year earlier.
In London, Informa topped the FTSE 100, rising 7.2%. The business information publisher and events organiser said it would launch a share buyback and said it saw a strong performance through 2021. In addition, Informa agreed to sell Pharma Intelligence, the largest business within its Informa Intelligence division, to Warburg Pincus for £1.9 billion.
Ahead of its annual results on March 15, Informa said it expects to report trading in 2021 in line with guidance of £1.8 billion revenue and £375 million of adjusted operating profit. It posted revenue of £1.6 billion and adjusted operating profit of £267.8 million in 2020.
AstraZeneca added 1.6%. The drugmaker said sales shot up in 2021, helped by its Covid-19 vaccine. Revenue for 2021 rose 41% to $37.42 billion from $26.62 billion in 2020. Excluding Covid vaccine revenue, total sales for the year still rose a robust 26% to $33.44 billion.
Despite the sales growth, Astra swung to a pre-tax loss of $265 million for 2021 from a profit of $3.92 billion in 2020. This was due to research & development costs jumping 63% to $9.74 billion from $5.99 billion and selling, general & administrative expense increasing 35% to $15.23 billion from $11.29 billion.
The market was unimpressed by results from Relx and Unilever, however.
Relx closed down 2%. For 2021, it generated revenue of £7.24 billion, up from £7.11 billion in 2020. However, the figure missed consensus estimates of £7.34 billion. Pre-tax profit was £1.80 billion, up from £1.48 billion in 2020, but was below forecasts of £2.1 billion.
UNILEVER RULES OUT ACQUSITION
Unilever dropped 1.3%. The under-fire consumer goods firm launched another large share buyback programme and promised to make no major acquisition in the ‘foreseeable future’ after its failed tilt at the GSK Consumer Healthcare business.
For 2021, Unilever generated revenue of €52.44 billion, up from €50.72 billion in 2020. The figure was higher than the company-compiled consensus forecast of €52.11 billion. Pre-tax profit rose to €8.6 billion from €8 billion the year prior.
Elsewhere in London, travel and leisure stocks continued to be boosted by news that remaining Covid-19 curbs could ease.
Picture house operator Cineworld rose 4.4%, low-cost gym company Gym Group rose 1.7% and travel firm On the Beach added 1.9%.
Over in Frankfurt, Siemens added 4.7%. The company narrowed its focus and confirmed its outlook for the year following a revenue rise. In the first quarter ended December 31, revenue rose 17% to €16.5 billion from €14.1 billion and net income climbed 20% to €1.8 billion from €1.5 billion.
Delivery Hero tumbled 30%, however. While sales on the group's platforms exceeded expectations, the operating profit margin on those sales was below Delivery Hero's minus 2% target, finishing the year at minus 2.2%.
The Berlin-based company sees the same measure being between minus 1% and minus 1.2% in 2022, putting off the prospect of reaching profitability this year.
In London, Just Eat Takeaway.com and Deliveroo fell 6.3% and 3.5% in a negative read across.
Brent oil was quoted at $92.78 a barrel late Thursday, up from $91.90 late Wednesday. Gold stood at $1,839.85 an ounce, higher against $1,830.69.
Friday’s economic calendar has UK gross domestic product figures at 7am GMT. Financial markets in Japan are closed for National Foundation Day.
The local corporate calendar has annual results from Dunhill maker British American Tobacco and insurer Lancashire Holdings. Food ingredients maker Tate & Lyle posts third quarter numbers.
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