Equities in London were jittery ahead of the start of US earnings season, with investors awaiting reports from banking titans JPMorgan and Morgan Stanley.
‘Financial institution reports are particularly interesting because they can give a general overview of the health of an economy and their projections can sometimes set the tone for the coming trading sessions, especially as investors continue to be uncertain about the prospects of recession and upcoming central bank decisions,’ said Walid Koudmani, chief market analyst at XTB.
The FTSE 100 was down 71.80 points, or 0.3%, at 7,138.57. The FTSE 250 index was down 29.68 points, or 0.2%, at 18,681.68. The AIM All-Share index was down 0.64 of a point at 878.53.
The Cboe UK 100 index was down 0.4% at 711.63. The Cboe 250 was down 0.4% at 16,262.69, and the Cboe Small Companies was flat at 13,100.88.
In mainland Europe, the CAC 40 stock index in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.1%.
In the FTSE 100, Centrica was the best performer, up 3%, after JPMorgan placed the British Gas parent on its 'positive catalyst watch' list.
Severn Trent was up 0.8% after the utility said it has made a good start to the financial year operationally and continues to expect at least £50 million in customer outcome delivery incentives outperformance payments in financial 2023. As expected, Severn Trent said it was seeing an increase in operating costs, particularly energy and chemicals.
At the other end of the large-caps, Barratt Developments was down 2.6%. The housebuilder said it delivered an ‘excellent’ performance for its recently ended financial year, reflecting strong customer demand for homes and the productivity of its sites.
For the financial year that ended June 30, adjusted pretax profit is anticipated to be in the range of £1.05 billion and £1.06 billion, slightly ahead of current market consensus expectations at £1.048 billion, and up from £919.7 million in financial 2021.
Barratt said total home completions returned to pre-pandemic levels, with 17,908 homes completed in the year, up from 17,243 homes the year before.
Looking ahead, Barratt said it has significant net cash balances, a well-capitalised balance sheet, and a strong forward sales position. It also said it has ‘clear plans’ to secure both incremental home completion growth and further operating efficiencies in the year ahead.
Rivals Berkeley, Taylor Wimpey and Persimmon were down 1.1%, 1.0% and 0.5% respectively in a negative read-across.
In the FTSE 250, Playtech was by far the worst performer, down 18%, after the gambling software provider noted TTB Partners does not intend to make a takeover offer.
TTB Partners said that, due to challenging underlying market conditions, it does not intend to make a takeover offer for Playtech.
The Hong Kong-based finance company expressed interest in making an all-cash offer for Playtech back in February, after Playtech shareholders voted down a £2.1 billion offer from Australia's Aristocrat Leisure. After a recent deadline extension, TTB had until Friday to either make a firm offer or walk away.
Playtech, noting the statement, said it remains confident in its long-term prospects.
Ashmore Group was down 5.0% after the emerging markets-focused money manager reported a drop in assets under management in its fourth quarter.
Ashmore reported total assets under management of $64.0 billion at the end of June, down 18% from $78.3 billion at the end of March. This comprised net outflows of $6.6 billion and negative investment performance of $7.7 billion.
The company said there was ‘broad-based risk aversion’ across asset classes globally. ‘As is typical in such a market environment, Ashmore's investment processes underperformed over the quarter,’ it said.
SSP Group was down 3.4%. The food kiosk operator said its revenue continued to strengthen in the third quarter as rail travel bounced back from the pandemic.
For the three months to June 30, SSP said revenue was at 87% of 2019 levels, driven by a recovery in passenger numbers.
But SSP noted that it also benefited from ‘longer passenger dwell times in some markets’, without explaining this further. The UK in recent months has suffered both train strikes and flight cancellations and delays, leaving passengers stuck in airports and train stations.
SSP said recovery has been led by domestic and leisure travel in both the air and rail sectors. Further, rail commuter travel continued to recover well, albeit at a slower pace than leisure travel, SSP said.
Looking ahead, SSP said its medium-term expectation for a recovery of the like-for-like business to 2019 levels of profitability remains unchanged.
On Wednesday, stocks in New York ended modestly lower, with the Dow Jones Industrial Average down 0.7%, the S&P 500 down 0.5% and the Nasdaq Composite down 0.2%
Even though Wall Street's main indices ended in the red, they were off their intraday lows.
In Asia on Thursday, the Japanese Nikkei 225 index closed up 0.6%. In China, the Shanghai Composite closed down 0.1% and the Hang Seng index in Hong Kong was down 0.2%. In Sydney, the S&P/ASX 200 finished 0.5% higher.
Sterling was quoted at $1.1850 early Thursday, down from $1.1929 at the London equities close on Wednesday.
The euro traded at $1.0030 early Thursday, lower against $1.0089 late Wednesday. Against the yen, the dollar was trading at fresh 24-year highs, quoted at JP¥138.94 in London, rising sharply from JP¥137.35 late Wednesday.
Gold stood at $1,719.18 an ounce early Thursday, lower than $1,739.37 on Wednesday.
Brent oil was trading at $99.40 a barrel Thursday morning, down from $100.80 late Wednesday.
Thursday's economic calendar has Irish inflation at 1100 BST and US jobless claims at 1330 BST.
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