London’s FTSE 100 edged higher heading into Friday afternoon, though European peers were more jittery ahead of a key US inflation reading.
The US Federal Reserve’s preferred inflation measure - the core personal consumption expenditure index - will be released at 1330 GMT.
Markets will be hoping the rate of core PCE inflation slows. If it comes in hotter-than-expected, stocks may struggle in afternoon dealings, on Fed rate hike bets.
The FTSE 100 index was up 13.57 points, or 0.2%, at 7,921.29. The FTSE 250 was up 68.76 points, or 0.4%, at 19,859.25, and the AIM All-Share was up 0.72 of a point, or 0.1%, at 856.23.
The Cboe UK 100 was up 0.1% at 793.14, the Cboe UK 250 was up 0.4% at 17,348.83, and the Cboe Small Companies was up 0.1% at 17,348.83.
The mood in UK equity markets was somewhat bullish, on improving consumer morale.
UK consumer confidence made a surprise rebound from historic lows in February, despite ongoing cost-of-living woes.
GfK’s long-running consumer confidence index rose by a significant seven points in February, although the headline score remains at a ‘severely depressed’ negative 38.
Joe Staton, client strategy director at GfK, said: ‘The headline consumer confidence score is still severely depressed and the mood as well as the economy remains a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.’
The pound was quoted at $1.1983 at midday on Friday in London, lower compared to $1.2023 at the close on Thursday.
In London, International Consolidated Airlines was the worst blue-chip performer at midday, nosediving 5.3%.
This was despite reporting a swing to a profit in 2022, led by higher passenger numbers, as skies got busier after Covid-19 mobility restrictions eased.
The British Airways parent reported a pretax profit of €415 million for 2022, swinging from a loss of €3.51 billion in 2021. In 2019, the airline reported a pretax profit of €2.28 billion.
Operating profit was €1.26 billion, 4.7% higher than the median company-compiled consensus of €1.20 billion, which had a range of €1.07 billion to €1.40 billion.
It swung from an operating loss of €2.77 billion in 2021, but 2022’s figures were less than half of 2019’s operating profit of €2.61 billion.
Looking ahead, IAG expects 2023 operating profit before exceptional items to be between €1.8 billion and €2.3 billion, above 2022’s €1.23 billion but at least 30% lower than €3.29 billion in 2019.
‘’It is better to travel than arrive’ could be a neat tagline for British Airways owner International Consolidated Airlines - talking up the pleasures of air travel - instead, this stock market truism was underlined as shares in the company descended despite unveiling its first annual profit since the pandemic,’ AJ Bell analyst Russ Mould commented.
‘As a legacy of Covid, debt is highly elevated. This could make the market uncomfortable, particularly if there is any indication it is preventing IAG from making necessary investments in its business.’
The analyst said there is no dividend to serve as a reward to those shareholders still ‘sticking around’.
In the FTSE 250, Jupiter Fund Management, jumped 13%. It reported a drop in yearly pretax profit and a fall in assets under management, though a decent second half for the company lifted spirits.
The London-based investment manager said, at December 31, assets under management fell 17% year-on-year to £50.2 billion from £60.5 billion. Pretax profit plunged 68% over in 2022 to £58.0 million.
Jupiter blamed macro-economic events, which hit market valuations and investor sentiment. However, the second half was more positive, with positive net inflows for the first time since 2017.
Elsewhere in London, Kin & Carta plunged 30% after the business consultancy cut its full-year expectations, due to the effects of macro headwinds which have made clients more cautious, and elongated sales cycles.
It said like-for-like organic revenue at constant currency was down 6% in the first half to January 31 from a year before. Net revenue rose 15% to £98.8 million on a reported basis. For its full year, it expects net revenue growth of 8% to 12%, but organic net revenue at constant currency to decline.
Gold was quoted at $1,817.72 an ounce at midday in London on Friday, lower against $1,821.05 late Thursday. Brent oil was quoted at $82.18 a barrel, up from $81.71.
In European equities on Friday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.4%.
The German economy saw a worse contraction than initially thought in the final quarter of 2022.
According to Destatis, German gross domestic product fell by 0.4% in the fourth quarter from the previous quarter, worsening from a preliminary forecast of a 0.2% contraction.
The euro stood at $1.0575 at midday on Friday in London, lower against $1.0593 at the London equities close on Thursday. Against the yen, the dollar was trading at JP¥135.39, higher compared to JP¥134.72.
Japan’s consumer prices rose 4.2% in January from a year earlier, a level not seen since September 1981, fuelled in part by higher energy bills.
The 4.2% rise, which excludes volatile fresh food, is well below the still sky-high levels that have sparked concern in the US, Britain and elsewhere, but far exceeds the Bank of Japan’s longstanding inflation goal of two percent.
The BoJ’s next governor Kazuo Ueda told parliament on Friday that the central bank’s long-standing monetary easing policies are ‘appropriate’, suggesting no sudden changes to the bank’s stance when he takes the helm in April.
Under current boss Karuhiko Kuroda, the bank has unleashed a raft of extraordinary ultra-loose policies - from a negative interest rate to spending vast sums on government bonds - in a bid to boost the sluggish economy.
It has stuck with these measures over the past year, despite pressure to join the US Federal Reserve and other central banks in aggressively hiking interest rates to tackle soaring inflation.
Ueda, an economics professor, told lawmakers that he saw the ‘continuation of monetary easing as appropriate’, warning of high levels of uncertainty in financial markets and the global economy.
Still to come in Friday’s economic calendar, alongside the release of the US Federal Reserve’s preferred inflation gauge at 1330 GMT, there will be the University of Michigan consumer sentiment index and new US home sales data at 1500 GMT.
Ahead of the US open, stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.5%, the S&P 500 index down 0.6%, and the Nasdaq Composite down 0.9%.
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