The FTSE 100 in London was lower at midday Friday, after buoyed mood from hopes of interest rate cuts in the US ended ahead of flash US purchasing managers’ index data.
The FTSE 100 index was down 38.18 points, 0.5%, at 7,610.80. The FTSE 250 was up 55.28 points, 0.3%, at 19,312.24, and the AIM All-Share was up 1.68 points, 0.2%, at 739.52.
The Cboe UK 100 was down 0.5% at 759.66. Meanwhile, the Cboe UK 250 was up 0.4% at 16,794.18, and the Cboe Small Companies was up 0.5% at 14,205.62.
Investors continued to digest the latest interest rate announcements. The US interest rate spurred hopes of rate cuts, though the Bank of England and European Central Bank struck more hawkish tones than the Federal Reserve.
Between them, the trio have enacted around 1,500 basis points worth of hikes in the current cycle, but it is seemingly the Fed that will cut faster, according to its dot-plot.
In European equities on Friday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.4%.
‘We had a very mixed bag of macroeconomic news out of Europe this morning,’ said Ebury’s Matthew Ryan.
Business activity in the eurozone fell further into contraction in December, due to a further weakening of the services sector.
The Hamburg Commercial Bank flash composite purchasing managers’ index fell to 47.0 points in December from 47.6 in November. This marks a two-month low.
The flash services PMI index fell to 48.1 points from 48.7, also a two month low, while the flash manufacturing PMI was unchanged at 44.2 points.
Analysts at Oxford Economics said the results ‘disappointed expectations for some further improvement at the end of 2023.’
Ebury’s Ryan noted that, by contrast, the UK economy is in a ‘much healthier state.’
The S&P Global/CIPS flash UK flash composite PMI rose to 51.7 points in December from 50.7 in November. The reading came in better than expected, with FXStreet consensus expecting the reading to come in at 50.9 points.
This was thanks to the UK service sector. The flash services PMI business activity index climbed to 52.7 from 50.9. FXStreet were expecting the reading to come in at 51.0.
Still to come on Friday’s economic calendar, there is US flash PMI data, as well as industrial production data.
Stocks in New York were called to open higher. The Dow Jones Industrial Average, the S&P 500 index, and the Nasdaq Composite are all called to open 0.2% higher.
The pound was quoted at $1.2776 at midday on Friday in London, higher compared to $1.2762 at the equities close on Thursday. The euro stood at $1.0966, lower against $1.0994. Against the yen, the dollar was trading at JP¥141.67, higher compared to JP¥141.60.
In the FTSE 100, NatWest lost 0.4%.
NatWest said a review into account closures at private bank Coutts, most notably involving former Ukip leader Nigel Farage, found no evidence of discrimination due to political view or affiliations.
Farage said in June that Coutts, which is owned by Edinburgh-based lender NatWest, was planning to close his account. He claimed it was due to his political opinions.
This caused former NatWest chief executive Alison Rose to resign in July, replaced by Paul Thwaite.
In the FTSE 250 index, Trainline climbed 20%.
On Thursday, Trainline noted the UK Department for Transport will no longer pursue creating a ticket retailing website and app.
The proposal for a Great British Railways app was first mooted in May 2021 as part of a white paper. GBR is a planned state-owned body that would oversee UK rail transport.
It was intended for the new body aims to sell tickets via a website and app, potentially putting it in competition with Trainline.
Trainline shares slumped 23% on May 20, 2021, the day overhaul plans were announced.
“This removes a potential competitive threat for the business in its core market and unsurprisingly investors have reacted accordingly and climbed aboard,‘ AJ Bell’s Russ Mould explained.
“Focus can now turn to the company‘s efforts to expand in Europe, where rail travel is more reliable and affordable, and as it consolidates its position in its domestic market.’
On AIM, Getech lost 25%.
The Leeds-based geo-energy and green hydrogen company said its client base, 85% of which is based outside of the UK, were showing a ‘growing level of caution’ due to economic and geopolitical instability.
Getech said this has pushed a number of projects initially expected to begin before the end of 2023 into 2024.
As a result, Getech has warned that sales for the full year are not expected to surpass £4.4 million, down 14% from £5.1 million in 2022.
Meanwhile, Bushveld rose 9.4%, after entering into a definitive agreement with Southern Point Resources Ltd.
The vanadium producer headquartered in South Africa confirmed the sale of a 64% stake in Mokopane mine to Southern Point for an acquisition price of $3.7 million.
Arkle Resources rose 8.6%.
The exploration company said it has been awarded two exploration licences in the Makgadikgadi salt pans in north-eastern Botswana.
‘We now have three lithium exploration projects, one in Ireland, one in Zimbabwe, both hard rock, and now in Botswana which is a lithium brines project,’ said Chair John Teeling.
‘Initial work will focus on analysis of the very limited exploration data, followed by prospecting to identify targets for drilling.’
Brent oil was quoted at $76.84 a barrel at midday in London on Friday, up from $76.70 late Thursday. Gold was quoted at $2,041.22 an ounce, higher against $2,039.11.
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