Stocks in London ended lower on Thursday, as markets nervously look ahead to the US Federal Reserve’s next interest rate decision.
Nerves around interest rate decisions were eased slightly after a weaker US jobless claims reading.
The Fed will announce its rate decision on Wednesday next week.
The FTSE 100 index closed down 24.60 points, 0.3%, at 7,599.74 on Thursday. The FTSE 250 ended down 44.72 points, or 0.2%, at 19,107.55. The AIM All-Share closed just 0.15 of a point lower at 792.90.
The Cboe UK 100 ended down 0.3% at 758.22, the Cboe UK 250 closed down 0.2% at 16,685.09, though the Cboe Small Companies ended up 0.4% at 13,863.03.
In Europe, the CAC 40 in Paris ended up 0.3%, and the DAX 40 in Frankfurt added 0.2%.
In New York, the Dow Jones Industrial Average was up 0.3%, the S&P 500 added 0.4% and the Nasdaq Composite climbed 0.8%.
New claims for unemployment insurance in the US rose in the most recent week, the Department of Labor reported.
According to the Department of Labor on Thursday, initial claims for unemployment support in the week ended June 3 totalled 261,000, an increase of 28,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 to 233,000 from 232,000.
The four-week moving average was 237,250, an increase of 7,500 from the previous week’s revised average. The previous week’s average was revised up by 250 to 229,750 from 229,500.
The dollar moved lower in the wake of the data. The pound was quoted at $1.2541 late Thursday in London, firm from $1.2459 at the equities close on Wednesday. Against the yen, the dollar was trading at JP¥139.05, lower compared to JP¥139.85.
The Fed will announce its rate decision on Wednesday next week. According to the CME FedWatch Tool, markets see a 73% chance of the Fed holding interest rates steady next week.
The eurozone fell into recession in the first quarter of this year, according to revised figures from Eurostat.
Seasonally adjusted gross domestic product decreased by 0.1% in the first quarter from the fourth quarter of last year, after Eurostat revised down a forecast from May, which had estimated slight growth.
For the fourth quarter of 2022, eurozone GDP was similarly revised down to negative 0.1%, from a previous estimate of flat on the third quarter. This means eurozone GDP has contracted for two consecutive quarters, which is the definition of a recession.
The euro stood at $1.0774 late Thursday, higher against $1.0705 at the London equities close on Wednesday.
In London, Vodafone fell 5.4%, the worst blue-chip performer.
The stock finished 2.3% higher on Wednesday, amid a report by Reuters that the telecommunications provider is in the final stage of agreeing to merge its UK operations with Hong Kong conglomerate CK Hutchison. According to Reuters, an announcement is expected as soon as Friday.
Vodafone shares returned gains on Thursday, however, with its shares going ex-dividend. It means new buyers will not qualify for the latest payout.
Grocer Sainsbury’s fell 3.8% and advertising firm WPP lost 2.6%. They also went ex-dividend.
Crest Nicholson dropped 7.4%. The housebuilder swung to a pretax profit of £28.4 million for the half-year ended April 30, from a loss of £52.2 million at the same point last year.
However, revenue fell to £282.7 million from £364.3 million the prior year, and home completions dropped by 18% to 894 from 1,096 the previous year. The company said this reflected the economic uncertainty and lower confidence in the housing market.
FirstGroup soared 14% after it trebled its total dividend despite reporting a lower annual profit.
The public transport provider declared a final dividend of 2.9 pence per share, up from 1.1p per share a year ago. This brings the total dividend to 3.8p for financial 2023, more than tripled from 1.1p a year prior.
This was despite pretax profit in the year ended March 25 falling sharply to £128.7 million from £654.1 million the year prior, and revenue dropping 15% to £4.76 billion from £5.59 billion.
‘Better than expected results reflected a clear marginrecovery in Bus and surprising strength in Rail, within the Open Access and ancillary service areas. Net cash was also better than we had forecast, with the dividend also well ahead of our assumptions and the share buyback plan extended by £115 million,’ analysts at Liberum commented.
Costain shares plunged 13% after it was removed from a UK infrastructure project.
It agreed with National Highways that its involvement in the A66 Northern Trans-Pennine upgrade project ‘will come to an organised and managed end’.
‘Costain is one of four parties involved in the A66 and this project was included in our preferred bidder book and therefore this decision has no impact on the group’s order book,’ the company said.
‘Costain continues to bid on a number of significant projects across the group. Costain confirms that it will continue to work on the A12 Chelmsford to A120 widening project, supporting the delivery of the project’s development consent order application and delivering a package of enabling works for the scheme. We will continue to bring our innovation and expertise to other critically important National Highways projects. The board remains confident of delivering full year results in line with its expectations.’
Brent oil was quoted at $76.28 a barrel at the time of the London equities close on Thursday, down from $77.24 late Wednesday. Gold was priced at $1,966.33 an ounce, up against $1,954.11.
Friday’s economic calendar has inflation data from China overnight.
The local corporate diary has annual results from real estate investment trust Industrials REIT, which recently agreed to a takeover by Blackstone. Kidney health-focused diagnostics company Renalytix reports third-quarter results.
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