Stock prices in London were mostly higher at midday on Tuesday but the FTSE 100 declined ahead of a slew of US data in the afternoon, after a public holiday in both the US and the UK.
The FTSE 100 index was down 16.64 points, or 0.2%, at 8,301.04. The FTSE 250 was up 83.97 points, or 0.4%, at 20,855.45, and the AIM All-Share was up 1.17 points, or 0.1%, at 811.19.
The Cboe UK 100 was down 0.3% at 828.42, the Cboe UK 250 was up 0.7% at 18,295.04, and the Cboe Small Companies was up 0.5% at 16,695.28.
Following shop price inflation data, London-listed supermarkets remained in the green on Tuesday afternoon. Ocado gained 8.3%, Sainsbury’s gained 1.0%, and Marks & Spencer gained 1.4%.
According to the British Retail Consortium, shop price inflation in the UK eased to 0.6% annually in May from 0.8% in April.
The BRC-NielsenIQ shop price index increased at its slowest annual rate since November 2021, with non-food prices remaining in deflation at 0.8%, steepening from a 0.6% annual decline in April. Food price inflation, however, slowed to 3.2% this month from 3.4% in April.
Meanwhile, in UK politics, the Labour and Conservative parties continued to take aim at each other ahead of the next general election on July 4.
Prime Minister Rishi Sunak promised to increase the income tax personal allowance for pensioners, giving them a tax cut worth around £95 in 2025 to 2026, rising to £275 in 2029 to 2030.
Labour, however, called this a ‘desperate move’ from a party which was ‘torching’ what was left of its claims to economic credibility. Keir Starmer’s party was busy schmoozing business leaders, with Shadow Chancellor Rachel Reeves promising to lead ‘the most pro-growth Treasury in our country’s history’.
In European equities on Tuesday, the CAC 40 in Paris was down 0.6%, while the DAX 40 in Frankfurt was down 0.1%.
According to data from the Federal Statistical Office, wholesale prices in Germany picked up more than expected on a monthly basis in April.
Wholesale prices rose 0.4% month-on-month in April, accelerating from 0.1% in March and higher than FXStreet-cited market consensus of 0.2%. However, year-on-year deflation in wholesale prices decelerated to 1.8% in April from 2.6% in March.
Across the pond, stocks in New York were predominantly higher. The Dow Jones Industrial Average was called 0.1% lower, but the S&P 500 and the Nasdaq Composite index were seen 0.1% and 0.3% higher respectively.
According to the Census Bureau, durable goods orders climbed 0.7% in April from March, defying the FXStreet cited forecast of a 0.8% slide. In March, orders rose 0.8% from February.
Year-ahead inflation expectations edged up from 3.2% last month to 3.3% this month, but long-run inflation expectations held steady at 3.0% for the second straight month.
US economic data last week was red-hot, strengthening the case for the Fed to keep rates higher for longer.
By contrast, the European Central Bank is expected to start rate cutting in June - but possibly only a single step for the time being.
Joachim Nagel, the president of the German Bundesbank, emphasised on Friday that a first interest rate cut cannot be used as the basis for a ‘kind of autopilot,’ where the next interest rate cut must follow immediately, DPA reported.
An initial interest rate cut is now considered likely at the ECB Governing Council meeting on June 6.
The pound was quoted at $1.2776 at midday on Tuesday in London, compared to $1.2748 at the equities close on Friday. The euro stood at $1.0878, up against $1.0849. Against the yen, the dollar was trading at JP¥156.84, down compared to JP¥156.96.
In the FTSE 100, Intermediate Capital was one of the best performers, up 2.3%.
For the year ended March 31, the London-based asset manager posted pretax profit rose of £597.8 million, up from £258.1 million a year prior. Fee-earning assets under management were up 11% to $69.7 billion from $62.8 billion.
At March 31, the private equity investment firm’s net asset value per share came to 801 pence, up 15% from 694p a year prior. ICG proposed a final dividend of 53.2p from 52.2p, taking its dividend to 79.0p from 77.5p.
In the FTSE 250, Ithaca gained 0.5%, improving from a 1.2% deficit on Tuesday morning.
For the three months ended March 31, the independent oil and gas operator posted earnings before interest, tax, depreciation, amortisation and exploration expense of $339.0 million, down from $518.1 million a year prior. Statutory net income fell to $42.7 million from $158.1 million, while adjusted net debt narrowed to $461.1 million from $899.6 million.
The firm also announced a host of leadership changes.
This included the appointment of Luciano Vasques as chief executive officer after the Eni UK business purchase has completed. Iain Lewis will return to his position as chief financial officer from interim CEO after the Eni deal. Meanwhile, Yaniv Friedman is set to replace Gilad Myerson as executive chair, while Dave Blackwood will be interim non-exec chair until Friedman joins. Odin Estensen will be chief operating officer.
Revolution Bars lost 1.3%, while Nightcap lost 10%.
Revolutiion received a non-binding takeover offer from Nightcap, but rejected the proposal, which would still have required it to proceed with its restructuring plan, but not the existing fundraising of £12.5 million. According to the board, the plan was ‘incapable of being delivered’, due to a number of challenges associated with its delivery.
Revolution said it remains open to considering any future proposal from Nightcap, and or any other party.
Capital & Regional fell 7.6%.
Johannesburg-listed Vukile Property Fund said it does not intend to make a bid for the manager of property assets. Last week Thursday, Vukile had announced an offer for Capital & Regional. On Tuesday Vukile said: ‘However Vukile has not been able to reach agreement with Growthpoint as to the terms and structure of any possible offer and therefore confirms that it does not intend to make an offer.’ Growthpoint Properties Ltd has a stake of around 68% in Capital & Regional.
Elsewhere, Inspirit gained 50%.
The developer of micro combined heat and power boilers and waste heat recovery has inked a contract with Eqtec to develop and sell an inspirit waste heat recovery engine. The contract is to supply one initial unit for £150,000, but also includes the option for a further 10 units at £150,000 each from 3 years from the date of the agreement.
Chair John Gunn said: ‘We are delighted with this endorsement of our technology, and it goes to demonstrate that the Inspirit WHR appliance is suitable for marine, automotive, and light industrial engines, where it can be retrofitted.’
Brent oil was quoted at $83.00 a barrel at midday in London on Tuesday, up from $81.54 late Friday.
‘Sentiment in oil is tilted to the upside, but there is one major risk to rebound above the $80pb level: a potentially waning reflation trade. If the central banks temper their rate cut plans into summer, demand outlook for oil could get hammered and the latter could limit recovery,’ said Swissquote Bank’s Ipek Ozkardeskaya.
Gold was quoted at $2,344.90 an ounce, up against $2,336.80.
As Rand Merchant Bank explained, ‘dollar weakness, despite faded optimism over Fed rate cuts at the start of the week, has buoyed gold bulls. Key support for gold is seen at $2,329/ounce.’
Still to come on Tuesday’s economic calendar, there is a slew of data from the US later in the afternoon. This includes the house price index at 1400 BST, and consumer confidence at 1500 BST.
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