The FTSE 100 edged upwards at Monday’s market open in London, buildings on last week’s gains, as stocks elsewhere declined.
The FTSE 100 index opened up 12.80 points, 0.2%, at 7,589.16. The FTSE 250 was down 20.90 points, 0.1%, at 19,188.07, and the AIM All-Share was down 1.18 points, 0.2%, at 738.13.
The Cboe UK 100 was up 0.3% at 758.18, the Cboe UK 250 was down 0.1% at 16642.63, and the Cboe Small Companies was up 0.1% at 14,304.78.
In European equities, the CAC 40 in Paris was down 0.5%, while the DAX 40 in Frankfurt was down 0.4%.
Save for London’s flagship index, global equity markets largely began the week on a more downbeat note, as last week’s global equity rally triggered by the US Federal Reserve’s dovish pivot faded, succumbing to profit-taking and perhaps to more hawkish comments from Fed officials at the end of the week.
After the Fed had signalled rate cuts of as much as 75 basis points next year, some officials attempted to reign in market expectations.
New York Federal Reserve President John Williams told CNBC’s ‘Squawk Box’ that the central bank isn’t ‘really talking about rate cuts right now.’ Separately, Atlanta Fed President Raphael Bostic, who votes on monetary policy next year, told Reuters that he expects two rate cuts in 2024 but not starting until the third quarter.
Sterling was quoted at $1.2688 early Monday, a touch lower than $1.2693 at the London equities close on Friday. The euro traded at $1.0917, slightly higher than $1.0912.
Against the yen, the dollar was quoted at JP¥142.48, up versus JP¥141.75.
The Bank of Japan began its two-day monetary policy meeting and will announce its decision on Tuesday.
According to a Bloomberg report last Monday citing ‘people familiar with the matter’, the BoJ is likely to keep its ultra-loose monetary policy in place, despite recent market speculation that the negative rate may be scrapped. This is because the central bankers have yet to see enough evidence of wage growth to support sustainable inflation, Bloomberg reported.
‘There is nothing more than a slim probability for the BoJ to exit negative rates this week, but investors are eager to hear further details about how and when the BoJ will leave the negative rate territory. Concrete details regarding the BoJ‘s policy plans and/or changes in BoJ’s inflation outlook could cause swift moves in yen markets, which became very volatile since Ueda hinted that something is cooking in its kitchen,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
In the FTSE 100, Vodafone was the top performer, up 5.5%.
On Friday, Reuters reported that Illiad, a French telecommunications firm, was planning a proposal to Vodafone Italy to combine its Italian operations in a joint venture by the end of next month. Reuters cited ‘two sources briefed on the matter’.
Spirax-Sarco Engineering named Croda International’s Louisa Burdett as its new chief financial officer, with a starting date of July next year. Burdett is currently CFO at Croda, and has led finance functions at ‘several large companies’ including Meggitt and Victrex. Spirax-Sarco said CFO Nimesh Patel, who was previously announced to be its new CEO, will take the helm of the firm on January 16. Group finance director, Phil Scott, will be interim CFO from that date until Burdett joins the company.
Croda noted Burdett’s departure and said it has begun the search for her successor. Additionally, Croda said adjusted pretax profit was likely to come at the lower end of its guidance of £300 million to £320 million range, mostly due to recent currency movements, especially in Argentina.
Croda shares fell 1.4%, while Spirax-Sarco dropped 2.2%.
However, the worst performer in the FTSE 100 was Mexican precious metals miner Fresnillo, down 6.2%, as Morgan Stanley cut the stock to ’underweight’ from ’equal weight’. Housebuilders Berkeley Group and Barratt Developments were also stung by a broker downgrade, falling 2.3% and 1.1% respectively after UBS cut the stocks to ’neutral’ from ’buy’.
It was a better morning for gambling company Entain, however, rising 5.2% as Jefferies raised the stock to ’buy’ from ’hold’.
In the FTSE 250, Games Workshop added 3.4%, as it announced an agreement with Amazon’s Content Services subsidiary for the prospective development of its Warhammer 40,000 universe into films and television series, alongside the associated merchandising rights.
The deal grants exclusive rights to Amazon for film and TV series set within the universe, as well as an option for exclusive rights in the Warhammer Fantasy universe down the line. ‘Games Workshop and Amazon will work together for a period of 12 months to agree creative guidelines for the films and television series to be developed by Amazon. The agreement will only proceed once the creative guidelines are mutually agreed between Games Workshop and Amazon,’ the UK company said.
It added that it will make no change to its forecast for its financial year ending in June. Games Workshop had announced an agreement in principle with Amazon in December last year.
Elsewhere in London, Canadian Overseas Petroleum plunged 31%.
The Calgary-headquarter oil and gas firm said its non-binding Cole Creek joint venture letter of intent has been terminated, and it plans ‘no further discussions at this stage’.
Back in July, COPL had announced the potential joint venture with ‘an established energy company’ to develop and exploit oil reserves at the Cole Creek in Converse and Natrona counties, Wyoming.
‘The company will provide a further update before year end regarding its strategy relating to the development of its Cole Creek and Barron Flats Shannon Units,’ COPL said on Monday.
Gold was quoted at $2,024.05 an ounce early Monday, lower than $2,034.62 on Friday.
Brent oil was trading at $76.91 a barrel, rising from $76.34.
Still to come on Monday’s economic calendar, there’s the latest Ifo business climate index reading from Germany at 0900 GMT.
Copyright 2023 Alliance News Ltd. All Rights Reserved.
