Stock prices were lower in London at midday Wednesday as UK retail sales continued to fall in August, and while investors awaited second quarter earnings from tech firm Nvidia.
The FTSE 100 index was down 9.17 points, or 0.1%, at 8,336.29. The FTSE 250 was down 36.43 points, or 0.2%, at 21,125.64, and the AIM All-Share was down 5.92 points, or 0.8%, at 773.26.
The Cboe UK 100 was down 0.1% at 834.18, the Cboe UK 250 was down 0.3% at 18,592.17, and the Cboe Small Companies was up 0.1% at 17,005.49.
In local economic news, retail sales in the UK fell for the third consecutive month in August although the rate of the downturn eased back. The Confederation of British Industry’s latest Distributive Trades Survey pointed to continued weakness in the retail sector, as headline retail sales balance hit minus 27% for the month.
This, however, represented an improvement, following a balance of minus 43% in July.
Retailers told the industry body they still expect overall decline in September, but indicated the rate of decline will slow down further. Firms surveyed said that sales for the time of year were ‘poor’ in August, with sales volumes likely to remain depressed next month.
The market took a turn following the survey, tipping red ahead of Nvidia results later in the day.
‘The expectations for Nvidia’s Q2 results are sky-high, of course. In numbers, Nvidia’s own revenue forecast is a whopping $28 billion of sales in the Q2 of this year. That’s more than the double of the money the company made a year ago. And the market expectations are even more than that: they range between $27 and $32 billion,’ said Swissquote’s Ipek Ozkardeskaya.
In European equities on Wednesday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.7%.
Keir Starmer will attempt to seize a ‘once-in-a-generation opportunity to reset our relationship with Europe’ during two days of meetings in Berlin and Paris.
The UK prime minister is in Berlin for talks with Chancellor Olaf Scholz as he hopes to ‘turn a corner on Brexit’, with plans for a new treaty with Germany aiming to boost business and increase joint action on illegal migration.
It is expected he will tell Scholz he is focused on making sure the UK moves past Brexit and rebuilds relationships with European partners.
After Germany, Starmer will travel to Paris for the Paralympics opening ceremony on Wednesday evening, before a breakfast meeting with French business leaders on Thursday morning, and a summit with President Emmanuel Macron at the Elysee Palace.
The pound was quoted at $1.3219 at midday on Wednesday in London, down compared to $1.3230 at the equities close on Tuesday. The euro stood at $1.1129, down against $1.1162. Against the yen, the dollar was trading at JP¥144.41, up compared to JP¥144.27.
In the FTSE 100, Prudential was up 1.6%.
The insurance company raised its first interim dividend by 9.3% to 6.84 US cents per share from 6.26c a year prior despite a 66% fall in IFRS attributable pretax profit to $394 million in the first half of 2024 from $1.18 billion a year before. Adjusted operating profit was $1.54 billion, up 6% from $1.46 billion.
Frasers lost 0.7%.
The Shirebrook, England-based owner of the House of Fraser, Sports Direct and Flannels retail chains expanded its retail presence, after purchasing a 14.65% strategic investment in Accent Group.
Accent Group is a Melbourne-based retail and distribution business in the performance and lifestyle market in Australia and New Zealand. This strategic investment will allow Frasers to grow its presence in Australia and New Zealand.
Elsewhere in the FTSE 250, John Wood Group lost 0.1%.
The firm has signed for the sale of its stake in Ethos Energy and CEC Controls Co. Combined, these two business contributed $41 million to Wood’s adjusted earnings before interest, tax, depreciation and amortisation in 2023.
Wood expects net cash proceeds of around $125 million from the disposals. In addition, Wood will be issued loan notes by EthosEnergy which, on repayment around five years after completion, will generate further proceeds of up to $42 million plus interest.
On AIM, Aquis Exchange lost 14%.
The London-based creator and facilitator of financial markets posted net revenue for the six months ended June of £10 million, up 3.5% from £9.7 million a year prior.
However, its shares fell following the loss of a historical contract for a start-up exchange, which was not renewed. This will reduce revenue and pretax profit from that renewal for the year ending December 31, and means Aquis now expects second half revenue and pretax profit to be £1 million lower than originally thought.
Stocks in New York were called higher. The Dow Jones Industrial Average was called fractionally higher, and the S&P 500 index and the Nasdaq Composite up 0.1%.
As the presidential campaign heats up, prosecutors have filed a revised indictment of Donald Trump on charges that he tried to overturn the 2020 US election after losing to Joe Biden.
The superseding indictment retains the same four charges against Trump but takes into account the recent Supreme Court ruling that a former president has broad immunity from criminal prosecution.
Meanwhile, in the Democrat camp, US Vice President Kamala Harris will sit down with CNN this week for her first interview since President Joe Biden dropped his re-election bid.
She will be joined by her running mate, Minnesota Governor Tim Walz. Harris has been criticised for not holding news conferences or granting interviews with news outlets since Biden stepped aside on July 21.
Brent oil was quoted at $78.61 a barrel at midday in London on Wednesday, down from $80.07 late Tuesday.
‘Oil prices pared recent gains following a rebound above $72.00 per barrel despite ongoing geopolitical tensions and declining crude oil inventories...However, the market remained cautious amid concerns about sluggish global demand,’ said Li Xing Gan, a financial markets strategist at Exness.
‘Elsewhere, supply risks, such as Libyan oil output disruptions and Middle East conflicts, continue to keep the market on edge. Furthermore, new escalations in Eastern Europe could limit the downside risks in oil prices.’
‘Later today, crude prices may experience further volatility with the release of EIA Crude Oil inventory data for the week ending August 23. It is expected to show a decline of 2.7 million barrels, continuing the recent trend. A larger-than-expected decline in crude inventories could provide support to oil prices.’
Gold was quoted at $2507.70, an ounce, lower against $2,517.10.
Still to come on Wednesday’s economic calendar, there is EIA crude oil stocks from the US, as well as a speech from Atlanta Fed President Raphael Bostic.
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