The FTSE 100 rose on Monday morning, albeit not as confidently as peers in Paris and Frankfurt, as investors reflect on a slew of data releases from last week, and look ahead to what could be a key few days for inflation and monetary policy developments.
The FTSE 100 index rose 9.70 points, 0.1%, at 7,920.86. The FTSE 250 climbed 68.77 points, 0.4%, at 19,794.71, and the AIM All-Share advanced 4.55 points, 0.6%, at 744.60.
The Cboe UK 100 was up 0.2% at 792.10 the Cboe UK 250 was up 0.4% at 17,216.99, and the Cboe Small Companies was down 0.5% at 14,602.62.
But it was a brighter picture in Europe. The CAC 40 in Paris was up 0.6% while the DAX 40 in Frankfurt rose 0.6%.
The European Central Bank announces its latest interest rate decision on Thursday. It is expected to leave rates unmoved, but focus will be on any clues on rate cut timing.
Goldman Sachs expects the meeting to be ‘relatively uneventful.’
‘We expect the Governing Council to leave its key policy language broadly unchanged without formally pre-committing to a June cut. Instead, President Lagarde is likely to reiterate that the Governing Council will have ’a lot of data‘ in June to decide whether to lower policy rates. We expect little additional colour on the likely pace of rate cuts, with the emphasis on data dependence.’
Goldman regards back-to-back cuts as the ‘most likely outcome, particularly for June, July and September,’ but sees ‘risks of a slowdown to quarterly steps later in the year.’
In the FTSE 100, Entain gained 4.9% after The Sunday Times reported it was considering its options for a number of assets, reigniting bid speculation.
The bookmaker, which owns Ladbrokes and Coral, has called on investment bank Moelis to help with a review of its brands, the report claimed.
The future of ‘a whole range’ of assets are under consideration, The Sunday Times reported, citing sources.
The Sunday Times said that a number of buyout firms, including the likes of Apollo Global Management Inc and CVC Capital Partners, are watching on with interest. The latter already has a hand in the gambling market, as it owns German bookmaker Tipico.
Entain has previously been the subject of failed bid attempts from MGM and Draftkings.
Gold and silver miner Fresnillo gained 2.9%, while Endeavour Mining advanced 1.6% as the price of gold continued to sparkle.
Gold was quoted at $2,342.04 an ounce on Monday at midday, rising from $2,325.89 late Friday.
A barrel of Brent oil fetched $90.35 at midday on Monday, down from $91.31 at the London equities close on Friday.
The respite in the oil price helped support shares in airlines easyJet, up 2.8%, and IAG, the owner of British Airways, up 1.1%.
easyJet was given an additional push by UBS which reiterated a ’buy’ rating and raised its share price target to 850 pence each from 820p.
‘We rate the shares buy and think easyJet offers the best risk/return profile of the European airlines that we cover,’ the Swiss bank commented.
The pound was quoted at $1.2633 on Monday at midday in London, up from $1.2621 late Friday. The euro was also flat at $1.0832 compared to $1.0831. Against the yen, the dollar climbed to JP¥151.84 from JP¥151.54.
Stocks in New York were called lower. The Dow Jones Industrial Average, S&P 500 Index and the Nasdaq Composite were all called down by 0.1%.
In New York on Friday, the Dow Jones Industrial Average rose 0.8%, the S&P 500 added 1.1% and the Nasdaq Composite surged 1.2%.
The gains came on the back of a robust US jobs report. According to the Bureau of Labor Statistics, nonfarm payroll employment rose by 303,000 in March, higher than the FXStreet-cited consensus of 200,000.
The figure for February was revised down by 5,000, from 275,000 to 270,000 while January’s total was adjusted upwards by 27,000, from 229,000 to 256,000. This means employment in January and February combined was 22,000 higher than previously reported.
Focus this week turns to a US inflation reading. Data on Wednesday is expected to show that the rate of US annual consumer price inflation picked up to 3.4% last month, from 3.2% in February, according to FXStreet cited consensus.
In London’s FTSE 250, shares in Currys gained 0.4% after The Sunday Times reported a shareholder has called on the consumer electronics seller to dispose of its mobile phone service division.
Fund manager JO Hambro said Currys should sell ID Mobile, a business which provides monthly phone contracts, the report claimed.
The Sunday Times said the division is valued at around £350 million.
JO Hambro holds a 4.5% stake in Currys and is the eighth-largest shareholder in Currys, the newspaper noted.
In March, Elliott Advisors announced it will not make an official bid for Currys, after having made a roughly £750 million proposal. JD.com, another potential bidder for Currys, also said it would not be making a bid.
On AIM, Cake Box gained 2.5%, after predicting annual profit slightly ahead of market expectations, despite a ‘continuing challenging economic climate’ in the UK.
Cake Box expects to report a revenue rise of 9.0% for the year ended March 31, from £34.8 million. It expects to report adjusted profit ‘slightly ahead of market expectations’.
Co-Founder and Chief Executive Officer Sukh Chamdal said: ‘We are delighted to have delivered a year of solid growth in all our key performance areas and full year profits slightly above expectations despite the backdrop of uncertain macroeconomic conditions. We expect to report an increase in all key financial metrics.’
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