Blue chip stocks in London were up at the start of Friday afternoon, while mid-caps lost ground, after there were no surprises from UK and US central banks this week.
Amongst individual stocks, Phoenix Group got a boost thanks to its 2023 results. Retail stocks were lower on the back of February’s ‘downpour’.
The FTSE 100 index was up 52.26 points, 0.7%, at 7,934.81. The FTSE 250 was down 18.04 points, 0.1%, at 19,723.27, and the AIM All-Share was up 1.18 points, 0.2%, at 741.82.
The Cboe UK 100 was up 0.6% at 793.40, the Cboe UK 250 was down 0.1% at 17,135.78, and the Cboe Small Companies was down 0.1% at 14,621.31.
In European equities on Friday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was up 0.1%.
‘It’s been quite the week for news flow. Naturally, everything has centred around central bank interest rate decisions and while the US and UK kept their rates level, it’s all about what could happen next, and confidence is growing that we’ll see rate cuts soon,’ said AJ Bell’s Russ Mould.
On Wednesday, the US Federal Reserve left interest rates unmoved, as expected, while its latest set of projections still suggest three cuts will come this year. The central bank’s federal funds rate range was unchanged at 5.25%-5.50%.
After the Fed, the Bank of England left bank rate at 5.25% in the afternoon.
Yet, there was a marked shift in the voting pattern with eight members of the Monetary Policy Committee voting to leave interest rates unchanged, with hawks Jonathan Haskel and Catherine Mann no longer recommending rates be increased.
The pound was quoted at $1.2581 at midday on Friday in London, lower compared to $1.2665 at the equities close on Thursday. The euro stood at $1.0817, down against $1.0859. Against the yen, the dollar was trading at JP¥151.62, lower compared to JP¥151.69.
In the FTSE 100, Phoenix surged 10%.
In 2023, the London-based life insurance provider reported total cash generation of £2.02 billion, up 35% from £1.50 billion the year prior. This was above the company’s upgraded target of £1.8 billion, which was also the market consensus.
Phoenix announced an ambition to grow operating cash generation by around 25% to £1.4 billion in 2026 from £1.1 billion in 2023, after which it is expected to grow at a mid-single digit rate over the long term.
These ‘ambitious’ growth targets will support a new ‘progressive’ and sustainable dividend policy, it said.
Vodafone edged up 1.5%.
The UK Competition & Markets Authority said a planned merger between Vodafone UK and Three UK could raise consumer prices and harm investment into UK mobile networks.
Vodafone UK is owned by Berkshire, England-based telecommunications provider Vodafone Group PLC, and Three UK is owned by Hong Kong-based telecommunications, ports, infrastructure and retail conglomerate CK Hutchison.
Both are major providers of mobile telecommunication services in the UK, and two of only four UK mobile network operators, the others being BT/EE and Virgin Media O2.
Vodafone and CK Hutchison announced plans in June to combine the UK businesses into a joint venture, with Vodafone to own 51% and CK Hutchison 49% of the combined operation. This would bring their 27 million customers under a new, single network provider.
Elsewhere in the FTSE 100, retailers were on the back foot. JD Sports lost 4.5%, Ocado lost 0.9%, and Frasers shed 0.7%.
According to the Office for National Statistics, UK retail sales were flat on-month in February, following a 3.6% boost in January. January’s figure was upwardly revised from 3.4%. February’s retail sales figure was predicted to show a fall of 0.3%, according to FXStreet, so the actual figure beat market consensus.
Year-on-year, UK retail sales fell by 0.4% in February, following a 0.5% increase in January. FXStreet were expecting retail sales to fall by 0.7% annually.
‘Unfortunately, February’s downpours put retailers on the back foot again after a short-lived uplift to retail sales in January,’ said Ebury’s Phil Monkhouse.
‘With dampened and unpredictable consumer demand seemingly becoming the ’new-normal’ in an uncertain economic environment, retailers will find today‘s data a disappointing reminder that volatility is not yet behind us.’
In the FTSE 250, Wetherspoon lost 9.0%.
The Watford, Hertfordshire-based pub chain said in the six months to January 28, pretax profit fell by more than half to £26.1 million from £57.0 million. This was amid property losses of £15.1 million, compared to £11.2 million the previous year.
However, revenue rose 8.2% to £991.0 million from £916.0 million the year before.
Chair Tim Martin said: ‘The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance.’
Amongst London’s small-caps, James Fisher & Sons rose 7.5%.
The marine services firm said it has agreed to sell RMSpumptools for £90 million to ChampionX UK.
Chief Executive Jean Vernet comments: ‘The sale of RMS marks a significant step in simplifying our portfolio to further strengthen our financial position and create a platform for sustained recovery. We believe the transaction represents good value for our shareholders, reflecting RMS’s strong performance in recent years.’
Stocks in New York were called to open higher. The Dow Jones Industrial Average and the Nasdaq Composite were both call up 0.1%, whilst the S&P 500 index was called up 0.2%.
Brent oil was quoted at $85.86 a barrel at midday in London on Friday, up from $85.50 late Thursday.
Gold was quoted at $2,167.44 an ounce, down against $2,178.10.
Still to come on Friday’s economic calendar, there is a retail sales reading from Canada at 1230 GMT.
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