London’s FTSE 100 made a tepid start to 2024, with underwhelming manufacturing data from the UK and eurozone doing little to lift sentiment.
Equities in New York are called to open lower ahead of a key week for the US interest rate outlook. The latest Federal Reserve meeting minutes are released on Wednesday, before the official US jobs report on Friday.
The FTSE 100 index was down 29.34 points, 0.4%, at 7,703.90. The FTSE 250 was down 89.51 points, 0.5%, at 19,600.12, and the AIM All-Share was up 0.84 of a point, 0.1%, at 764.16.
The Cboe UK 100 was down 0.4% at 769.26, the Cboe UK 250 was down 0.5% at 17,076.23, and the Cboe Small Companies was down 0.4% at 14,939.05
‘Markets got off to a cautious start on the first trading day of 2024, perhaps setting the tone for what could be a volatile year jam packed with political jostling ahead of crunch elections,’ said AJ Bell analyst Russ Mould.
The latest S&P Global UK manufacturing purchasing managers’ index fell to 46.2 points in December, having risen to a seven-month high of 47.2 in November. The PMI fell further below the 50.0 point no-change mark, remaining below the threshold for the 17th consecutive month. The latest number landed below the flash estimate of 46.4.
S&P Global said the downturn accelerated as intakes of new work from both domestic and export clients declined. All five of the PMI sub-indices, new orders, output, employment, stocks of purchases and suppliers’ delivery, have remained in deterioration.
‘The latest S&P Global survey suggests the recent decline in manufacturing output probably has further to run...We doubt the headline index will recover materially in the new year, either,’ said Pantheon Macroeconomics analyst Gabriella Dickens.
‘We think manufacturing output will continue to decline over the next few months. But given that the manufacturing sector accounts for only around 10% of overall economic output, and the services sector activity looks set to recover, we think a recession will be avoided.’
Sterling was quoted at $1.2668 on Tuesday at midday, down from $1.2747 at the early London equities close on Friday.
In European equities, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was up 0.2%.
In the eurozone, factories continued to undergo a sharp downturn in December, survey results from S&P Global showed, but noted that there are signs that the worst could be over.
The Hamburg Commercial Bank eurozone manufacturing purchasing managers’ index rose to a seven-month high of 44.4 points in December from 44.2 in November. The reading was a touch higher than the flash estimate, which had forecast no change from the prior month.
The euro traded at $1.0976 on Tuesday afternoon, lower than $1.1074 around the same time on Friday. Against the yen, the dollar was quoted at JP¥141.85, higher than JP¥141.42.
Still to come on Tuesday is a US manufacturing PMI reading at 1445 GMT.
Stocks in New York are called to open lower. The Dow Jones Industrial Average was called down 0.3%, the S&P 500 index down 0.4%, and the Nasdaq Composite down 0.7%.
In the FTSE 100, AstraZeneca lost 0.6%.
The Cambridge-based pharmaceutical firm and Sanofi’s long-acting monoclonal antibody treatment Beyfortus has been approved in China for the prevention of respiratory syncytial virus lower respiratory tract infection in neonates and infants.
AstraZeneca said the approval by China’s National Medical Products Administration is based on three ‘pivotal’ late-stage clinical trials and an ‘extensive’ local clinical development programme. It is anticipated to be available during the upcoming 2024/25 RSV season.
Beyfortus was approved in the EU in October 2022 and received approval by the US Food & Drug Administration in July 2023 following the unanimous recommendation by the Antimicrobial Drugs Advisory Committee in June 2023.
AstraZeneca said regulatory applications are currently under review in Japan and ‘several other countries’.
BT rose 0.9%, while WPP lost 1.1%, after Sky News on Monday reported that outgoing BT Chief Philip Jansen has been approached about becoming the next chair of WPP.
Jansen, who is set to leave BT in the spring, is reportedly one of a number of candidates to have been considered in recent weeks for the WPP chairmanship.
City sources on Monday said WPP’s search was yet to reach an advanced stage and that there was no certainty that Jansen or WPP would opt to progress his candidacy further.
Airtel Africa rose 0.4%, after the telecommunications firm announced the retirement of Chief Executive Officer Segun Ogunsanya, naming Transformation Director Sunil Taldar as his successor.
Taldar joined the telecommunications company in October and will be appointed to the board as CEO and executive director following a transition period at the beginning of July.
At this time, Ogunsanya will formally retire but will be available to advise Chair Sunil Bharti Mittal, the board and incoming CEO Taldar for a 12-month period.
In the FTSE 250, Balfour Beatty rose 1.0% after the infrastructure construction firm said it appointed corporate brokers to manage an initial tranche of its 2024 share buyback programme, repurchasing up to £50 million or 63.2 million shares.
Balfour Beatty intends for this initial tranche to be completed by the end of June, while the total anticipated 2024 share buyback will be confirmed with the firm’s full year results in March.
On AIM, LungLife AI surged 30%, after the developer of clinical diagnostic solutions designed to address the early detection of lung cancer announced the successful validation of its LungLB test for indeterminate lung nodules.
The LungLB test is a blood-based tool used by clinicians to help with earlier diagnosis of lung cancer nodules.
The diagnostic demonstrates a positive predictive value of 81% in distinguishing benign from cancerous lung nodules in patients with nodules smaller than 15 millimetres. This surpasses the current clinical standard of around 60%.
Sareum soared 22%, after the pharmaceutical company’s co-development partner CRT Pioneer Fund entered into a development and commercialisation licence for SRA737 with an unnamed US biopharmaceutical company.
SRA737 is a clinical-stage oral, selective checkpoint kinase 1 inhibitor that targets cancer cell replication and DNA damage repair mechanisms.
Gold was quoted at $2,070.92 an ounce on Tuesday at midday, higher than $2,065.02 on Friday. Brent oil was trading at $78.53 a barrel, higher than $77.56.
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