Stocks in London ended lower on Thursday, though avoided deeper losses thanks to a better-than-expected US jobless claims reading.
The FTSE 100 index ended down 21.91 points, 0.3%, at 8,144.97. It had been 1.3% lower earlier on Thursday, however.
The FTSE 250 fell 67.45 points, 0.3%, at 20,508.58, and the AIM All-Share lost 2.11 points, 0.3%, at 765.21.
The Cboe UK 100 ended down 0.2% at 813.12, the Cboe UK 250 fell 0.4% to 17,961.14, and the Cboe Small Companies fell 0.6% to 16,676.67.
In European equities on Thursday, the CAC 40 in Paris fell 0.3%, while the DAX 40 in Frankfurt added 0.4%.
In New York, the Dow Jones Industrial Average rose 1.3%, the S&P 500 surged 1.7% and the Nasdaq Composite jumped 2.0%.
US initial jobless claims were lower than expected in the week just gone, numbers from the Department of Labor showed.
In the week ending August 3, the advance figure for seasonally adjusted initial claims decreased to 233,000. The reading from the prior week was revised upwardly to 250,000 from 249,000.
The latest reading came in below FXStreet cited consensus of 240,000.
‘It’s only one data point, though this afternoon’s US jobless claims figures appear to have steadied some market nerves, with claims rising by just 233k in the week to 3rd August, considerably below both the consensus expectation, and prior print. Stocks have popped in reaction, as dip buyers emerge for a third straight day, though the rapid nature by which gains fizzled out yesterday may be some cause for concern, particularly with the S&P,’ Pepperstone analyst Michael Brown commented.
‘Nevertheless, the rather sizeable equity, and Treasury, reaction to what is usually a glossed-over data release speaks to how the market continues to hang on the ’growth scare’ narrative, with next week’s retail sales print the next jigsaw piece in further allaying concerns over an imminent US economic slowdown, which were sparked by last week’s poorer-than-expected labour market report.’
The pound was quoted at $1.2720 late on Thursday in London, a touch lower from $1.2723 at the equities close on Wednesday. The euro stood at $1.0907, lower against $1.0936. Against the yen, the dollar was trading at JP¥147.17, down compared to JP¥147.40.
Brent oil was quoted at $78.92 a barrel, up from $78.64 late Wednesday. Gold was quoted at $2,415.11 an ounce, higher against $2,399.30.
In London, Spirax lost 7.2%, after reporting a performance ‘slightly below’ expectations in the first half.
The Cheltenham, England-based thermal energy and fluid technology firm said pretax profit rose 9.5% to £124.8 million in the first half that ended June 30 from £114.0 million in the previous year.
Revenue fell 2.8% to £827.0 million from £850.8 million, while operating costs declined 5.4% to £679.8 million from £718.6 million.
Spirax raised its interim dividend by 3.3% to 47.5 pence per share from 46.0p.
Chief Executive Officer Nimesh Patel: ‘Against the backdrop of a weak macroeconomic environment in some of our key markets and a strong currency headwind, first half results were slightly below our expectations.’
Beazley rose 11%.
Beazley is a London-based specialist insurance underwriter, managing six Lloyd’s of London syndicates. It said pretax profit nearly doubled to $728.9 million in the six months that ended June 30 from $336.4 million a year before.
Insurance written premiums rose by 6.9% to $3.12 billion from $2.92 billion a year before, and Beazley’s combined ratio improved to 77% from 84%. Any combined ratio below 100% means a provide on underwriting, so the lower the better.
‘Expertise in underwriting and active risk selection are key drivers of this strong result, even as the rating environment is moderating,’ commented Chief Executive Officer Adrian Cox.
Deliveroo jumped 9.9% after the firm hailed ‘key financial milestones’, achieving first-half profit.
The food delivery company said revenue in the six months to June 30 rose 0.8% to £1.03 billion from £1.02 billion a year prior.
It swung to a pretax profit of £4.3 million, from a loss of £57.6 million.
It was a first half where ‘key financial milestones’ were reached, with Deliveroo hailing ‘positive free cash flow’ alongside the swing to profit.
Adjusted earnings before interest, tax, depreciation and amortisation jumped 57% to £61.7 million from £39.4 million. It achieved free cash flow of £3.2 million, compared to an outflow of £27.7 million a year earlier.
The firm also announced a new £150 million share buyback, which ‘reflects financial progress in the last year and confidence in the outlook’.
‘I am pleased with the performance we have achieved this half, which was driven by effective execution of our growth and profitability initiatives. As a result, we reached two major financial milestones: positive free cash flow and positive profit for the period,’ Chief Executive Officer Will Shu said.
‘Looking ahead, while there is continued uncertainty in the external environment, I am encouraged by the inflection we are currently seeing in consumer behaviour in many of our markets. The Deliveroo platform is more powerful than ever, and we remain responsive to the external environment while continuing to optimise our proposition for consumers, riders and merchants. We operate across attractive verticals, in large, underpenetrated markets, and it’s clear that there is a lot of room for growth in our industry. I want to thank the Deliveroo team whose talent and expertise is invaluable as we continue to capture the many opportunities ahead of us.’
Looking ahead, it expects its full-year adjusted Ebitda to be at the upper half of its £110-130 million range. It still expects to be free cash flow positive for the whole of 2024.
AJ Bell analyst Russ Mould commented: ‘Food takeaway platform Deliveroo served up a significant milestone with its results for the first six months of the year as it delivered its first half-year profit since joining the market in 2021. Significantly, this was also backed by positive free cash flow which, unlike profit figures, cannot be massaged to give a more favourable picture of performance.
‘The shares have really struggled since early optimism in the wake of its IPO evaporated with concerns ranging from regulation, competition and slowing demand as consumer habits changed coming out of the pandemic. The company is now seeing improved demand and has sufficient confidence to announce a material share buyback programme. A change to listing rules, which effectively allow for the sort of dual class share structures which provide Deliveroo founder Will Shu with greater voting rights than ordinary shareholders, might pave the way for the company‘s entry into the FTSE 250.’
Friday’s economic calendar has a Chinese inflation reading overnight.
The local corporate calendar has a trading statement from housebuilder Bellway.
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