Stock prices in London closed down on Monday, with stocks in New York following in their footsteps.
The FTSE 100 index closed down 16.39 points, 0.2%, at 7,512.96. The FTSE 250 ended down 47.40 points, 0.3%, at 18,361.25, and the AIM All-Share closed down 1.05 points, or 0.2%, at 715.24.
The Cboe UK 100 ended down 0.3% at 749.31 and the Cboe UK 250 closed down 0.3% at 15,878.49. However, the Cboe Small Companies ended up 0.4% at 13,413.09.
In European equities on Monday, the CAC 40 in Paris ended down 0.2%, while the DAX 40 in Frankfurt ended up marginally.
Investors this week will be carefully eyeing the outlook for US interest rates. The latest nonfarm payrolls report is on Friday and the precursor ADP reading on Wednesday.
Fed Chair Jerome Powell on Friday said it is still ‘premature’ to speculate on when the US central bank will start cutting interest rates.
However, on Monday, gold prices hit an all-time high and became the subject of headlines around interest rates.
The yellow metal hit an intraday high on $2,134 an ounce during the morning session on Monday, but then retreated amid questions around US monetary policy trajectory. Gold was quoted at $2,025.87 an ounce at the London equities close Monday, down against $2,055.14 at the close on Friday.
‘The precious metal has been driven higher by renewed violence in the Middle East, a weaker US dollar and falling government bond yields. Investors often put money into gold where there are geopolitical tensions as it is considered to be a safe-haven asset. The weaker dollar can also make gold more affordable for non-US buyers,’ explained AJ Bell’s Mould.
‘Investors increasingly believe the US central bank will start to cut interest rates next year and that could put further pressure on the dollar.’
The pound was quoted at $1.2620 at the London equities close Monday, down compared to $1.2659 at the close on Friday.
The euro stood at $1.0817 at the European equities close Monday, lower against $1.0859 at the same time on Friday. Against the yen, the greenback faded to JP¥147.02 from JP¥147.37.
Stocks in New York were lower at the London equities close, with the DJIA down 0.4%, the S&P 500 index down 0.9%, and the Nasdaq Composite down 1.6%.
In the FTSE 100, miners closed down at the bottom of the index.
Anglo American was the worst amongst the losers, down 3.7%. Meanwhile, Glencore, Rio Tinto and Antofagasta were down 3.1%, 2.7% and 2.6% respectively.
Oil firms Shell and BP also tracked lower on lower oil prices. They were down 1.2% and 1.4%, respectively.
Brent oil was quoted at $78.53 a barrel at the London equities close Monday, down from $80.73 late Friday.
Rolls-Royce closed up 3.1% at the top of the index.
Rolls-Royce has ‘far higher’ customer advances from its long-term service agreements on its balance sheet than it had previously disclosed, according to JPMorgan.
This prompted the investment bank to upgrade its outlook for the London-based jet engine maker. Since April 2018, JPMorgan rated Rolls-Royce shares at either ’underweight’ or ’neutral’. It now rates the firm at ’overweight.’
In the FTSE 250 index, 888 shot up 19%, after it rebuffed a £700 million takeover bid from gambling software provider Playtech.
Citing City sources, the Sunday Times said Playtech had made an indicative approach in July, pitching an offer at 156 pence per share. Bookmaker 888 believed this undervalued the firm. The Gibraltar-based betting operator, which owns the William Hill and Mr Green brands.
Playtech shares rose 1.1%.
Amongst London’s small caps, Petrofac jumped 22%, despite predicting a free cash flow miss.
The provider of services to the energy industry also said it is mulling a ‘range of strategic and financial options’ to bolster its coffers.
‘Management has been making progress in organic actions to unwind working capital, collect receipts on ongoing and new contracts and to unlock long-outstanding commercial settlements. In addition, management is considering the sale of non-core assets, and is actively engaged in discussions with financial investors to take a non-controlling position in certain other components of the business portfolio,’ it added.
On AIM, Cornerstone FS shares rocketed 35%.
The cloud-based payment services provider predicts 2023 adjusted earnings before interest, tax, depreciation and amortisation ‘materially above current market expectations’. For 2022, it had reported an adjusted Ebitda loss of £869,319 of 2022, narrowed from £1.3 million in 2021.
On the other hand, Fusion Antibodies lost 23%. It reported a widened loss and reduced revenue for its latest half year, but said its growth prospects are ‘increasingly positive’.
In Tuesday’s UK corporate calendar, there are half year results from Ashtead, as well as first quarter results from Ferguson.
On the economic calendar, a slew of services purchasing managers’ index releases are out for China, the EU, Germany, Japan, the UK and the US.
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