Stock prices were more stable at midday Thursday after Wednesday’s decline and ahead of the weekly US jobless data.
The FTSE 100 index was up 10.95 points, 0.2%, at 7,457.24. The FTSE 250 was up 146.84 points, 0.8%, at 19,011.21, and the AIM All-Share was up 1.96 points, 0.3%, at 740.76.
The Cboe UK 100 was up 0.3% at 745.29, the Cboe UK 250 was up 0.7% at 16,429.45, and the Cboe Small Companies was up 0.5% at 14,904.98.
In European equities on Thursday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.5%.
The FTSE 100 stabilised on Thursday, after Wednesday’s hotter-than-expected UK inflation data, paired with some poor growth figures from China, hurt stocks. The FTSE 100 closed down 1.5% on Wednesday, with the FTSE 250 edging 1.7% lower and AIM All-Share slumping 1.2%.
Wednesday’s gloomy day was made worse, following strong US retail sales data which saw expectations for early cuts in interest rates fade further.
Further evidence of this resilient economy came in the form the Fed’s Beige Book. The survey showed a majority of the twelve Federal Reserve districts reported little or no change in economic activity since the prior Beige Book period.
Based on this, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: ‘Investors continue to come back to their senses and the latter involves trimming the interest rate cut expectations that went ahead of themselves over the past few months.’
Ozkardeskaya thinks that March ‘seems overly optimistic’ for the Fed to start cutting rates, but he said it remains likely that the first cut will be in the first half of the year.
The CME FedWatch tool showed the probability of rates easing as soon as March dropping to 60% - compared with 80% as recently as last Friday.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.6%.
The pound was quoted at $1.2688 at midday on Thursday in London, higher compared to $1.2668 at the equities close on Wednesday. The euro stood at $1.0889, up against $1.0853. Against the yen, the dollar was trading at JP¥147.90, lower compared to JP¥148.43.
In the FTSE 100. Flutter Entertainment impressed shareholders, with its stock jumping 12%.
Flutter, which owns Paddy Power, Sky Bet and Betfair, said it traded well over the fourth quarter, reporting double digit revenue growth at the end of 2023, and for the year as a whole. In the fourth quarter, the gaming firm said total revenue rose 11% year-on-year to £2.67 billion, while average monthly players rose 12% to 13.6 million. In 2023 overall, revenue jumped 24% year-on-year to £9.51 billion from £7.69 billion, as average monthly players rose 20% to 12.3 million.
The firm said it was on track for a New York listing by January 29. It will remain in the FTSE 100 as its premium listing in London is unaffected.
In a positive read-across, fellow gambling company Entain rose 4.6%.
In the FTSE 250, Watches of Switzerland plunged 33%.
The Leicester, England-based watch retailer, whose key brands include Rolex, Cartier and Patek Phillipe, said it had experienced a ‘volatile’ trading performance during the festive season.
Watches pointed to the impact of ‘challenging economic conditions’ on consumer spending and warned that these circumstances would continue for the remainder of its financial year, which goes to the end of April.
‘Few people sat round an open fire and exchanged Christmas gifts that included a fancy watch, judging by one of the leading timepiece sellers. Watches of Switzerland continues to suffer from the downturn in the luxury goods market and a nice Rolex or fancy Omega were not in Santa’s sleigh a month ago,’ commented AJ Bell investment director Russ Mould.
Watches of Switzerland is not the only luxury brand suffering from this downward trend, however.
It was only last week that luxury fashion house Burberry warned it anticipates its annual results to be below previous expectations following a weaker festive period. The London-based brand also blamed the slowdown in demand within the luxury sector.
Burberry shares fell 0.5% on Thursday around midday.
More positively in the FTSE 250, Ferrexpo jumped 10%, after it reinstated its dividend.
The Baar, Switzerland-based iron ore pellet producer with assets in Ukraine highlighted the second half of 2023, which was boosted by improved pricing.
Ferrexpo announced an interim dividend of 3.3 US cents. The last dividend announced before that was an interim dividend of 19.8 cents in August 2022.
Amongst London’s small-caps, Ceres Power rose 48%.
The clean energy tech developer announced the signing of its first hydrogen licence with Taiwan’s Delta Electronics.
It will bring in £43 million in revenue to Ceres, half of which is expected to be recognised in 2024. Ceres said there’s the potential for additional revenue from the sale of development stacks to Delta. In 2022, Ceres Power reported revenue of £22.1 million.
On AIM, Strategic Minerals surged 70%, as it celebrated the return of a client.
The miner with projects in New Mexico, South Australia and the UK reported the return of an unnamed major client, with a purchase order for 30,000 tonnes in 2024. In 2023, the firm’s sales volumes at Cobre dropped by around 50% year-on-year, in the absence of the client.
Brent oil was quoted at $78.46 a barrel at midday in London on Thursday, up from $77.55 late Wednesday. Gold was quoted at $2,012.55 an ounce, up against $2,009.77.
Thursday’s economic calendar has the latest US initial jobless claims reading at 1330 GMT.
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