The FTSE 100 got to within touching distance of another record high on Monday, with stocks in Europe on the rise ahead of Tuesday’s US inflation reading.
Monday’s stock market bounce could prove to be short-lived if the US inflation rate comes in hotter than expected. The FTSE 100 could make a tilt at the 8,000 mark if the reading is favourable, however.
The FTSE 100 index ended up 65.15 points, or 0.8%, at 7,947.60. The blue-chip index closed within a whisker of its best level of 7,949.57, which was achieved last week Thursday.
The FTSE 250 closed up 94.45 points, or 0.5%, at 20,124.52. Meanwhile, the AIM All-Share ended down 3.28 points, or 0.4%, at 871.11.
The Cboe UK 100 ended up 0.8% at 794.89, the Cboe UK 250 rose 0.4% to 17,535.67, and the Cboe Small Companies rose 0.4% to 14,154.30.
In European equities on Monday, the CAC 40 in Paris jumped 1.1%, while the DAX 40 in Frankfurt was ended up 0.6%.
Stocks in New York were higher. The Dow Jones Industrial Average and S&P 500 were up 0.8%, while the Nasdaq Composite surged 1.3%.
The pound was quoted at $1.2133 late Monday in London, higher compared to $1.2072 at the close on Friday. The euro stood at $1.0718, up from $1.0677 at the close on Friday. Against the yen, the dollar was trading at JP¥132.77, higher compared to JP¥131.44.
The dollar started the day on the front foot, but surrendered some ground as Monday progressed.
Eyes will be on US inflation data that is reported on Tuesday. The headline rate of inflation is expected to fade to 6.2% in January, from 6.5% in December, according to FXStreet cited consensus. Core consumer price inflation is to ease to 5.5% from 5.7%.
Meanwhile, it is also a key week for UK data. A reading of the jobs market on Tuesday, before the consumer price index on Wednesday, could be influential to the thinking of the Bank of England.
Analysts at Lloyds Bank commented: ‘The latest UK labour market data out early tomorrow will be watched for signs of cooling. Unfilled job vacancies are falling but for now remain uncomfortably high. Moreover, we expect the latest release to show a further fall in the unemployment rate and another rise in employment. Also, while total pay growth may have slowed modestly, we project regular (ex-bonus) pay to have picked up further to 6.6%. In all, we expect it to do little to relieve Bank of England policymakers’ concerns about domestic inflationary pressures.’
Tuesday’s economic calendar has a UK unemployment reading at 0700 GMT, eurozone GDP at 1000 GMT, before the eagerly-anticipated US inflation data at 1330 GMT.
In London, Unilever and British American Tobacco, two of the FTSE 100’s biggest constituents, were among those leading the way. They rose 3.1% and 1.9%. Last week, consumer goods firm Unilever fell 0.9% and cigarette maker BAT lost 2.6%. The duo’s annual results both underwhelmed.
Housebuilders ended lower, however. Persimmon ended down 3.7% and Taylor Wimpey 3.0% lower.
Deutsche Bank cut Taylor Wimpey to ’hold’ from ’buy’ and Persimmon to ’sell’ from ’hold’. It lowered Crest Nicholson to ’hold’ from ’buy’ also. The FTSE 250 stock lost 5.3%.
Elsewhere in London, Kape Technologies jumped 12% after it received a takeover offer from Unikmind Holdings, a company wholly-owned by Teddy Sapi, who holds around 55% of Kape.
The offer for $3.44 per Kape share, or 285 pence per share, values the entire company at around $1.51 billion or £1.25 billion. The offer price represents a 9.7% premium to Kape’s closing price of 260 pence on Friday.
Cineworld jumped 18%. Vue International has lined up financial backing from its new shareholders to help assemble a takeover tilt for the Brentford, London-based cinema chain, according to a report from Sky News.
Funds managed by Barings and Farallon Capital Management have agreed to provide capital to Vue International to support strategic acquisitions, with City sources claiming this support would allow Vue to be among the bidders for Cineworld.
This is ahead of a deadline set by Cineworld’s advisers later this week, Sky News said, adding the identity of other prospective bidders was unclear on Monday.
The beleaguered cinema chain put itself up for sale in January in the hope of securing its future.
Back in September 2022, Cineworld confirmed it was beginning a Chapter 11 filing in US Bankruptcy Court in Texas, as it grappled with liquidity woes.
It had first announced it was considering a Chapter 11 filing on August 22, and any deleveraging would likely result in a ‘very significant dilution’ of its shares.
Since then, there have been reports that Cineworld has been in discussions with London-based Vue International and Toronto-based Cineplex. Before the Covid-19 pandemic, Cineworld had agreed to buy Cineplex, but later backed and was ordered to pay damages to Cineplex by a Canadian court.
Brent oil was quoted at $85.82 a barrel at the time of the London equities close on Monday, down from $86.41 late Friday. Gold was quoted at US1,853.05 an ounce, lower against $1,858.39.
The local corporate calendar on Tuesday has annual results from soft drink bottler Coca-Cola HBC, and first-quarter numbers from travel company Tui.
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