Share prices were narrowly mixed early Thursday, as investors became resigned to another round of interest rate hikes by major central banks this month, while taking some comfort from hints of a revival in new listings in London.
The FTSE 100 index opened down 1.13 points at 7,623.21. The FTSE 250 was up 4.31 points at 19,156.58, and the AIM All-Share was down 0.43 of a point at 792.62.
The Cboe UK 100 was flat at 760.66, the Cboe UK 250 was up 0.1% at 16,728.77, and the Cboe Small Companies was up 0.1% at 13,816.94.
In European equities, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was down 0.2%.
The Bank of Canada defied expectations and lifted its benchmark rate on Wednesday, following in the footsteps of the Reserve Bank of Australia a day before.
Having largely expected rate hike pauses, equity investors are now increasingly pricing in the possibility that the monetary tightening cycle will continue in major economies.
The US Federal Reserves announces its rate decision on Wednesday next week, the European Central Bank follows suit on Thursday. The Bank of England weighs in the following week on June 22.
Sterling was quoted at $1.2448 early Thursday in London, edging down from $1.2459 at the London equities close on Wednesday. The euro traded at $1.0707, little changed than $1.0705. Against the yen, the dollar was quoted at JP¥139.90, edging up from JP¥139.85.
In New York on Wednesday, the Dow Jones Industrial Average closed up 0.3%, but the S&P 500 index down 0.4% and the Nasdaq Composite down 1.3%.
M&G fell 0.7% in early exchanges.
The London-based investment manager said it started 2023 with strong momentum carried over from the previous year. At the end of March, its assets under management and administration edged up to £344 billion from £342 billion at the end of 2022.
It saw net client outflows of £1.1 billion during the quarter. Excluding heritage, it saw net inflows of £400 million, which was down from £1.6 billion a year before.
In the FTSE 250, Wizz Air rose 3.9%.
The budget airline said its recent financial year was one of ‘significant growth’, despite the hit from higher fuel prices and structural capacity issues at airports.
For its financial year ended March 31, the Budapest-based budget airline’s pretax loss narrowed to €564.6 million from €641.5 million the previous year.
Revenue more than doubled to €3.90 billion from €1.66 billion the prior year. Wizz Air said this was due to an 88% increase in the number of passengers it carried, rising to 51.1 million from 27.1 million the prior year.
‘Wizz’s solid FY2023 results statement implies upside to consensus estimates for FY2024,’ said Davy Research. ‘While the market will be sensitive to the precise cost trajectory in the year, the direction of travel is clearly positive.’
Elsewhere, CAB Payments announced its intention to float in London. It is a London-based business-to-business cross-border payments and foreign exchange provider, specialising in emerging markets.
The news follows a recent boost for London, after the world’s largest natural soda ash producer, WE Soda, confirmed its intention to float on the premium segment of the London Main Market on Wednesday.
International specialist fund Amicorp FS also began its first day of trading on Thursday, joining the standard listing segment of the Main Market.
‘The last two years have provided a skewed perspective on London’s strength as a financial capital. Following the 2021 IPO boom, where a record £49 billion was raised (with mixed outcomes, to say the least), 2022 saw a swing towards economic difficulties in the UK market. 2023 may well be a slight return to normality after these turbulent years,’ said Fraser Thorne of research house Edison.
Meanwhile, US asset manager BlackRock said it has agreed to buy London-based privately-held debt financer Kreos Capital.
Private debt investing is now an ‘increasingly important component’ of investing portfolios, said Blackrock’s Stephan Caron, head of Private Debt for Europe, the Middle East & Africa.
‘Current market dynamics have made private credit an attractive asset class as investors focus on its income generation, low volatility, portfolio diversification and its low defaults versus public markets,’ he explained.
BlackRock shares closed down 0.3% in New York on Wednesday.
On the AIM market in London, PetroTal fell 5.1% early Thursday.
The Alberta, Canada-based oil and gas company said vessels that provide services to the company are being affected by an ‘illegal and violent’ river blockade by indigenous activists in Puinahua Canal in Peru.
The Indigenous Association for Development & Conservation of Bajo Puinahua has been engaging in a blockade since Saturday, blocking all ships providing services to the firm - including barges that transport oil and vessels carrying critical camp supplies.
In Asia on Thursday, the Nikkei 225 index in Tokyo closed down 0.9%.
Japan’s economy expanded 0.7% in the January-March quarter, improved from an initial estimate of 0.4%, government data showed. The latest figure – which also beat market expectations of 0.5% growth – reflects strong corporate investments, data released by the Cabinet Office showed. The first-quarter number was much stronger than the 0.1% seen in the final quarter of 2022.
In China, the Shanghai Composite closed up 0.5%, while the Hang Seng index in Hong Kong was up 0.2%. The S&P/ASX 200 in Sydney closed down 0.3%.
Gold was quoted at $1,945.79 an ounce early Thursday, lower than $1,954.11 on Wednesday. Brent oil was trading at $77.05 a barrel, a touch lower than $77.24.
UK Prime Minister Rishi Sunak will meet UK President Joe Biden at the White House on Thursday for talks during which he will voice unstinting support for Ukraine. Opening his two-day trip, Sunak announced that Britain would hold the world’s first summit on artificial intelligence in the second half of the year.
Still to come in the economic calendar, there’s EU GDP at 1000 BST and the US weekly unemployment insurance claims at 1330 BST.
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