Stock prices in London were in the green at midday Thursday, as UK purchasing managers’ index data indicated that the UK recession is ‘already’ over.
Eye are now on US jobless data, which will be released at 1330 GMT.
The FTSE 100 index was up 20.96 points, 0.3%, at 7,683.47. The FTSE 250 was up 135.16 points, 0.7%, at 19,254.13, and the AIM All-Share was up 0.86 of a points, 0.1%, at 750.88.
The Cboe UK 100 was up 0.3% at 769.28, the Cboe UK 250 was up 0.9% at 16,667.58, and the Cboe Small Companies was up 0.2% at 14,500.65.
In European equities on Thursday, the CAC 40 in Paris was up 0.8%, while the DAX 40 in Frankfurt was up 1.2%.
‘The UK’s service sector moved further into growth in February, according to the PMIs, and interestingly is performing better than in the eurozone. That might be linked to the fall in market rates over the past six months and the more immediate consequences for both the mortgage squeeze and the direct feedthrough to the chancellor’s tax-cutting plans,’ ING commented.
The UK’s private sector expanded for the fourth consecutive month and at the fastest pace since May last year, preliminary data suggested on Thursday.
The S&P Global flash composite purchasing managers’ index rose to a nine-month high of 53.3 points in February from 52.9 points in January. Rising further over the 50-point no-change mark, it shows the pace of expansion sped up slightly. The reading was higher than FXStreet-cited market consensus of 52.9.
‘The survey data point to the economy growing at a quarterly rate of 0.2-3% in the first quarter of 2024, allaying fears that last year’s downturn will have spilled over into 2024 and suggesting that the UK’s ’recession’ is already over,’ Chris Williamson, chief business economist at S&P Global Market Intelligence, noted.
The data was less optimistic for the eurozone.
The latest flash composite purchasing managers’ index reading from the Hamburg Commercial Bank rose to 48.9 points in February, from January’s final tally of 47.9. The February flash reading represented an eight-month-high, and draws the PMI closer to the 50.0 mark, which separates growth from decline.
The pound was quoted at $1.2671 at midday on Thursday in London, up compared to $1.2644 at the equities close on Wednesday. The euro stood at $1.0848, higher against $1.0812. Against the yen, the dollar was trading at JP¥150.23, down compared to JP¥150.25.
Stocks in New York were called to open higher. The Dow Jones Industrial Average was called up 0.3%, the S&P 500 index up 1.2%, and the Nasdaq Composite up 2.0%.
Markets in New York have sighed a breath of relief after Nvidia scored an earnings beat. The hotly-anticipated figures from a company at the heart of an artificial intelligence revolution could have threatened jitters in markets if they fell short of lofty expectations.
Nvidia jumped 9.1% in after-hours trade, after declaring artificial intelligence has ‘hit the tipping point’ as it celebrated surges in both quarterly and annual revenue and profit.
The Santa Clara, California-based computer chip manufacturer said revenue for the fourth quarter to January 28 rose 22% quarter-on-quarter to a ‘record’ $22.10 billion, more than triple $6.05 billion in the final quarter of the previous year. Net income rocketed to $12.23 billion from $1.41 billion.
Back in London, the FTSE 100 was prompted up by some impressive earnings.
At the top of the index, Rolls-Royce shot up 8.8%.
Rolls-Royce reported statutory revenue from continuing operations of £16.49 billion, up 22% from £13.52 billion in 2022.
It swung to a pretax profit of £2.43 billion from a loss of £1.50 billion. On an underlying basis, pretax profit jumped to £1.26 billion from £206 million.
‘Our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives. This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures,’ Chief Executive Tufan Erginbilgic said.
Installed as CEO at the start of last year, Erginbilgic made waves just days into his stint as CEO after he described the firm as a ‘burning platform’.
Beazley rose by 8.6%.
The insurer lifted annual guidance and said shareholders could net a $300 million ‘additional’ return.
The company now expects an undiscounted combined ratio in the ‘mid-70s’ for 2023, an improvement on the previous ‘low-80s’ guidance. A combined ratio below 100% means a profit on underwriting, so the lower the better.
In the FTSE 250, Indivior jumped 16%.
In the year to December 31, the pharmaceutical company delivered $1.09 billion in revenue, up 21% from $901 million in 2022. Indivior reported a nominal pretax profit of $1 million in 2023, swinging from a loss of $95 million in 2022.
Indivior said it is ‘initiating shareholder consultations to potentially transition to a primary listing in the US’ this year. It would maintain a secondary listing in the UK.
Hargreaves Lansdown slumped 8.0%, amid a mixed bag of earnings.
In the six months to December 31, the first half of the firm’s financial year, net new business totalled £1.0 billion, down 38% from the £1.6 billion achieved a year prior.
HL explained: ‘Our gross inflows to the platform were up year on year, however, our outflows were up too, meaning that overall, our net new business came in at £1.0 billion.’
Assets under administration amounted to £142.2 billion, a rise of 12% from £127.1 billion a year earlier and up 6% since June.
Brent oil was quoted at $83.09 a barrel at midday in London on Thursday, up from $82.84 late Wednesday.
Gold was quoted at $2,028.19 an ounce, higher against $2,024.88.
Still to come on Thursday’s economic calendar, there is the weekly US initial jobless claims at 1330 GMT.
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