Stock prices in the UK, France and Germany were higher at midday Wednesday as investors await a US consumer price inflation print, after UK CPI inflation was reported higher.
The FTSE 100 index was up 28.63 points, or 0.4%, at 8,263.86. The FTSE 250 was up 114.24 points, or 0.6%, at 20,858.32, and the AIM All-Share was up 1.10 points, or 0.1%, at 769.08.
The Cboe UK 100 was up 0.5% at 826.01, the Cboe UK 250 was up 0.5% at 18,288.83, and the Cboe Small Companies was up 0.1% at 16,819.31.
The Office for National Statistics reported that annual consumer price index inflation in the UK increased to 2.2% in July from 2.0% in June.
However, this was short of the increase to 2.3% that had been expected by FXStreet-cited market consensus. It marks the first time annual CPI inflation accelerated since December, when it increased to 4.0% from 3.9% in November.
On a monthly basis, prices declined by 0.2% in July, compared to an increase of 0.1% in June from May. CPI including owner occupiers’ housing costs, or CPIH, rose 3.1% on-year in July, accelerating from 2.8% in June.
Producer prices meanwhile rose 0.4% annually in July, up from flat in June, which had been upwardly revised from a previously reported decline of 0.4%. On a monthly basis, producer input prices edged down by 0.1%, slowed from a contraction of 0.4% in June.
Reflecting on the data, Deutsche Bank’s chief UK economist, Sanjay Raja, said: ‘The next round of inflation and labour market data will be crucial in deciding whether the MPC could push through a September rate cut. While not our base case, the odds of a back-to-back rate cut are on the rise. A September rate cut should no longer be off the table. And it’s entirely conceivable to think that we could get multiple more rate cuts this year.’
In European equities on Wednesday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both up 0.4%, following economic data.
According to Eurostat, the economy in the eurozone climbed faster in the second quarter of 2024, while employment growth slowed. Gross domestic product in the eurozone increased by 0.6% in the second quarter from a year before, accelerating from a 0.5% annual climb in the first quarter.
On a quarterly basis, GDP grew by 0.3% in the second quarter from the first, the same pace as in the first quarter from the fourth quarter of 2023.
Employment growth in the single-currency area decelerated to 0.8% on-year in the second quarter from 1.0% in the first quarter. Compared to the first quarter, employment increased by 0.2% in the second quarter, slowing from 0.3% quarterly growth in the first quarter.
The pound was quoted at $1.2842 at midday on Wednesday in London, higher compared to $1.2826 at the equities close on Tuesday. The euro stood at $1.1023, up against $1.0956. Against the yen, the dollar was trading at JP¥147.01, a notch lower compared to JP¥147.03.
In the FTSE 100, In the FTSE 100, AstraZeneca lost 0.4%.
The pharmaceutical firm’s shares slipped after a positive start to the morning, post-announcing that its Lynparza and Imfinzi combination has been approved in the EU for patients with mismatch repair proficient advanced or recurrent endometrial cancer.
Imfinzi plus chemotherapy as a first-line treatment, followed by Lynparza and Imfinzi, has been approved for patients with mismatch repair proficient disease, while Imfinzi plus chemotherapy followed by Imfinzi alone has been approved for patients with mismatch repair deficient disease.
In the FTSE 250, Balfour Beatty lost 2.3%.
The infrastructure construction contractor said it is on track to achieve full-year expectations, after reporting pretax profit for the six months ended June 28 of £112 million, up from £82 million a year prior. Revenue came to £4.7 billion, up 3% from £4.5 billion, driven by increases at Support Services and Gammon.
Underlying profit from operations was £77 million, down from £80 million, while the order book stood at £16.6 billion, up from £16.5 billion the year before. Balfour Beatty raised its interim dividend by 9% to 3.8 pence from 3.5p.
On AIM, Ixico gained 28%.
The London-based precision analytics and medical imaging services provider celebrated a long-term contract win for a study into Huntington’s Disease. Contract wins worth £5.8 million since March 31 mean Ixico is now expecting a financial performance for the year ending September 30 ‘ahead of market expectations’.
Full-year revenue is expected to be between £5.5 million and £5.9 million, down from £6.7 million in financial 2023, while the year-end order book is expected to increase and return to the prior year-end level of £14.8 million.
Meanwhile, Distil lost 32%.
The London-based premium drink brand owner said that revenue in the four months to July came to £204,000, down 55% from £453,000 a year prior. Accordingly, the firm’s full-year expectations have now been reduced.
Stocks in New York were called predominantly higher. The Dow Jones Industrial Average was called fractionally lower, while the S&P 500 index was seen up just marginally by 0.03%, and the Nasdaq Composite up by 0.02%.
As the presidential election campaign heats up, Donald Trump is set to attack the Biden administration’s economic record, just days before Kamala Harris unveils her economic agenda. Trump’s campaign said he would deliver remarks in the city of Asheville, in the crucial battleground state of North Carolina, on the ‘economic hardships created by the Harris-Biden administration.’
‘Hard-working Americans are suffering because of the Harris-Biden administration’s dangerously liberal policies,’ the campaign said in a statement.
Meanwhile, Tim Walz made his first solo outing as a vice-presidential candidate on Tuesday as the Democratic ticket looks to build momentum in the quickening US election campaign.
The Midwesterner addressed union organisers in Los Angeles, pledging he would be part of a pro-worker administration. But in a shout-out to moderate Republicans wary of Trump’s hard-right positions, he also invoked a hero of the party, noting that he was the ‘first union member on a presidential ticket since Ronald Reagan.’
Brent oil was quoted at $80.57 a barrel at midday in London on Wednesday, down from $80.98 late Tuesday.
Gold was quoted at $2,471.40 an ounce, up against $2,470.54.
‘Yesterday’s US Producer Price Index numbers came in lower than expected, leading to a drop in treasury yields and a weaker dollar. However, the effect on gold prices was subdued as traders opted to hold off until the release of July’s US consumer inflation data today,’ said Ricardo Evangelista, senior analyst at ActivTrades.
‘If the report confirms a slowdown in inflation, we could see a more pronounced response from gold traders. Expectations of a 50 basis point rate cut by the Federal Reserve in September would likely rise, pushing down treasury yields and the dollar, thereby boosting the precious metal’s price.’
Still to come on Wednesday’s economic calendar, there is both CPI and EIA crude oil stocks from the US.
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