Stocks in London mostly closed in the green on Monday, as investors shrug off interest rate worries for now.
The FTSE 100 index closed up 25.78 points, 0.4%, at 7,487.71. The FTSE 250 ended up 204.23 points, 1.1%, at 19,075.64, while the AIM All-Share closed down 0.49 of a point, 0.1%, at 735.34.
The Cboe UK 100 ended up 0.5% at 749.14, the Cboe UK 250 closed up 1.3% at 16,508.49, while the Cboe Small Companies ended down 0.3% at 14,856.92.
In European equities on Monday, the CAC 40 in Paris ended up 0.6%, while the DAX 40 in Frankfurt ended 0.7%.
Stocks in New York were higher at the London equities close, with the DJIA and the S&P 500 index up 0.4%, while the Nasdaq Composite up 0.5%.
This continued a buoyant day of trading on Friday, with each index up 1.1%,1.2% and 1.7% respectively. In doing so, the S&P 500 reached an all-time high.
The US Federal Reserve has entered its ’blackout’ period ahead of next Wednesday’s monetary policy decision.
Sterling was quoted at $1.2717 on Monday at the London equities close, higher than $1.2669 on Friday. The euro traded at $1.8990, higher than $1.0884. Against the yen, the dollar was quoted at JP¥147.94, down versus JP¥148.18.
The key US data for the week includes fourth-quarter gross domestic product figures on Thursday, as well as core personal consumption expenditures on Friday. There will also be earnings from US firms to consider, with highlights including Netflix on Tuesday and Tesla on Wednesday.
While the Fed is almost unanimously expected to leave interest rates on hold this month, investors will be focusing on any indicators of when rate cuts will begin. According to CME’s FedWatch tool, the likelihood of a once all-but-assured 25 basis point rate cut in March is now considered to stand at just 44%, with a 55% likelihood that rates are left unchanged.
Other key events this week include the Bank of Japan’s monetary policy decision on Tuesday, and the European Central Bank’s rate call on Thursday.
On the FTSE 100, Endeavour Mining lost 3.3%, after updating on its fourth-quarter and full-year production.
The gold miner, with operations in the Ivory Coast, Senegal and Burkina Faso, expects production to total 1.1 million ounces for the 2023 full year, down 8% from 2022. Its fourth-quarter output was at 280,000 ounces, flat from the third quarter but down from 294,000 ounces year-on-year.
Endeavour expects production to increase by up to 18% in 2024, thanks to several project start-ups due to commence in the second quarter
Gold was quoted at $2,024.07 an ounce on Monday at the London equities close, lower than $2,035.35 on Friday.
In the FTSE 250, Bodycote rose 6.2%.
The heat treatments and specialist thermal processing services supplier set out plans for a £60 million share buyback. It said it will launch the buyback scheme in March, with more details to be revealed in its annual results on March 15.
Bodycote also said a deal to acquire Stack Metallurgical will not be completed. This is due ‘to a failure to satisfy all closing conditions to the agreement’.
The firm had announced the deal to acquire SMG in October, at the same time it said it was buying Indiana-based specialist technology company Lake City. Those deals would have amounted to $145 million in total.
On Friday, Bodycote completed the acquisition of Lake City for a $66.5 million consideration. Following expected tax benefits of $7.5 million, the company said the net economic price amounted to $59.0 million.
Among London’s small-caps, S4 Capital lost 6.7%.
The London-based advertising agency said its fourth-quarter trading was in line with its expectations outlined in November. Consequently, it expects a like-for-like decline in net revenue of around 4% in 2023 as a whole, and operational Ebitda margin in the range of 10% to 11% - the margin was improved in the second half thanks to ‘significant’ cost reductions.
‘While it is early in the year, we are not expecting 2024 to show macro-economic improvement, and client caution on marketing spend will likely persist, although not at last year’s level,’ said Executive Chair Martin Sorrell.
City of London Investment rose 7.8%.
The investor in London-listed equities noted improvement across its investment portfolio and announced an 11 pence shareholder dividend.
It said that, as of December 31, its funds under management stood at $9.6 billion, up slightly from $9.4 billion at the group’s year-end on June 30.
Profit before taxation and amortisation is expected to be around $13.9 million for the half-year, up from $13.8 million in the six months to December 2022.
City of London Investment said that marketing and sales activity picked up ‘significantly’ in January, and the group said it will focus on ‘new mandates in a number of the group’s asset classes’. These promise strong long-term performance, according to CLIG, as closed-end fund discounts are at ‘compelling levels’.
It said it continues to ‘proactively undertake’ cost reductions given the current market environment, and expects to realise savings of around $2.5 million of costs per annum in the next financial year.
On AIM, Beowulf Mining closed up 35%, after it received an endorsement from the Swedish government, declaring the company’s planned Kallak operations a matter of ‘national interest’.
In March 2022, Beowulf’s subsidiary Jokkmokk Iron Mines was awarded an exploitation concession to target iron ore deposits at Kallak in the north of Sweden. While the exploitation concession provided exclusive mining rights to Jokkmokk, operating rights would require three additional permits, the company has said.
Brent oil was trading at $79.73 a barrel, higher than $79.06.
In Tuesday’s UK corporate calendar, Crest Nicholson posts its full-year results and AB Foods releases a trading statement.
The economic calendar has consumer confidence data out for the eurozone.
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