Stock prices in London began the last week before Christmas finishing in the green, as comments hawkish US Federal Reserve officials failed to deter investors.
The FTSE 100 index closed up 38.12 points, 0.5%, at 7,614.48. The FTSE 250 ended up 11.58 points, 0.1%, at 19,220.55, and the AIM All-Share closed up 1.88 points, or 0.3%, at 741.19.
The Cboe UK 100 ended up 0.5% at 760.32, the Cboe UK 250 closed up 0.1% at 16,679.25, and the Cboe Small Companies ended up 0.5% at 14,370.59.
In European equities on Monday, the CAC 40 in Paris ended down 0.4%, while the DAX 40 in Frankfurt ended down 0.6%.
On Monday, markets were digesting some hawkish comments from US Federal Reserve officials.
This is a move away from Wednesday’s pivot, when the Fed left US interest rates unchanged, but signalled for cuts in 2024.
New York Federal Reserve President John Williams told CNBC’s ’Squawk Box’ that the central bank isn’t ‘really talking about rate cuts right now’.
Separately, Atlanta Fed President Raphael Bostic, who votes on monetary policy next year, told Reuters that he expects two rate cuts in 2024 but not starting until the third quarter. Meanwhile, Loretta Mester, the president of Cleveland Fed, said markets are a ‘bit ahead’ of central bank on rate cuts.
AJ Bell’s Russ Mould said the comments has left markets ‘somewhat in limbo.’
Still to come this week, there are US gross domestic product readings, as well as core inflation figures. The data could give investors more guidance about where interest rates might go.
Stocks in New York were higher at the London equities close, with the DJIA up 0.2%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.4%.
The pound was quoted at $1.2640 at the London equities close Monday, lower compared to $1.2693 at the close on Friday. The euro stood at $1.0914 at the European equities close Monday, slightly higher against $1.0912 at the same time on Friday.
We still aren’t done with interest rates decision for 2023. The Bank of Japan announces its monetary policy on Tuesday.
According to a Bloomberg report last Monday citing ‘people familiar with the matter’, the BoJ is likely to keep its ultra-loose monetary policy in place, despite recent market speculation that the negative rate may be scrapped.
Against the yen, the dollar was trading at JP¥143.05, higher compared to JP¥141.75 late Friday.
In the FTSE 100, BP rose 1.6%.
The oil firm said it had joined other companies in suspending transits through the Red Sea, after Yemen’s Huthi rebels targeted Israel with missiles.
‘In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits,’ a statement said.
‘We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region,’ it added.
SPI Asset Management’s Stephen Innes explained: ‘It appears that a cohort of traders are taking hedging precautions against the tail risk associated with the Strait of Hormuz, which is providing the bid today. The Houthis’ focus on vessels with ties to Israeli ownership or those engaged in shipping cargo to Israel through the Red Sea has raised concerns.’
Peer Shell rose 1.4%.
Brent oil was quoted at $78.52 a barrel at the London equities close Monday, up from $76.34 late Friday.
At the top of the index was Entain, up 4.1%. Jefferies raised the stock to ’buy’ from ’hold’.
On the other hand, Fresnillo closed down 5.2%. Morgan Stanley cut the miner’s stock to ’underweight’ from ’equal-weight’. Housebuilders Berkeley Group and Barratt Developments were also stung by a broker downgrade, falling 3.4% and 2.5% respectively after UBS cut the stocks to ’neutral’ from ’buy’.
In the FTSE 250 index, IP Group jumped 5.9%.
The investors launched a share buyback worth up to £20 million. The programme will run until the end of 2024.
‘The board remains committed to making regular cash returns to shareholders from realisations,’ IP Group said.
On London’s AIM, N4 Pharma surged 39%.
The pharmaceutical company announced the successful oral administration of Nuvec with a DNA plasmid after receiving promising results from its research programme with the University of Queensland.
Chief Executive Officer Nigel Theobald said: ‘This continued success shows that Nuvec has the potential to be successfully used as an oral delivery system with many potential applications such as a vaccine, a product for irritable bowel disease or to treat colonic cancer among many possible examples. Given the complexities involved in oral delivery this early success with Nuvec represents a potentially massive opportunity and point of difference for Nuvec and its use as delivery system to target multiple diseases.’
Cap-XX plummeted 57%, after it responded to a court decision regarding its patent infringement case against Maxwell Technologies.
The Sydney-based company, which manufactures supercapacitors for portable electronic devices, started its patent infringement trial against Maxwell Technologies last Monday.
The complaint, filed in September 2019, alleged that Maxwell Technologies had directly and indirectly infringed on Cap-XX’s patents for several capacitor products.
On Friday, the jury in the Delaware district court affirmed that Cap-XX’s patents were invalid, thereby nullifying the accusations against Maxwell. As a result, Maxwell is not liable to pay any damages or license fees.
Gold was quoted at $2,022.88 an ounce at the London equities close Monday, lower against $2,034.62 at the close on Friday.
In Tuesday’s UK corporate calendar, there is a consumer price index for the eurozone at 1000 GMT.
The economic calendar for has half year results from Hipgnosis Songs Fund. There is a trading statement from Nanoco.
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