Stocks in London opened mixed, with the FTSE 100 marginally up, as investors demonstrated caution ahead of key inflation prints from the US Federal Reserve and European Central Bank later in the day.
The FTSE 100 index opened up just 0.29 of a point at 7,473.96. Meanwhile, the FTSE 250 was up 65.74 points, or 0.4%, at 18,630.26. The AIM All-Share was down 0.22 of a point at 741.92.
The Cboe UK 100 was marginally lower at 744.32, the Cboe UK 250 was up 0.5% at 16,295.21, and the Cboe Small Companies was flat at 13,034.73.
A flash inflation print for the EU at 1000 BST and the US personal consumption expenditures index - one of the Fed’s preferred inflationary gauges - will be released at 1330 BST.
‘Despite the dark clouds on the European skies, the latest inflation numbers showed that inflation in both Spain and Germany ticked higher in August for the second month – a U-turn that could be explained by the re-surge in oil prices since the end of June. This morning, the aggregate [consumer price index] number may not confirm a fall to 5.1% in headline inflation. And a stronger-than-expected CPI print will likely boost the [European Central Bank] hawks,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
In London, Persimmon was among the top performers in the FTSE 100 on Thursday morning, up 1.1%, despite news that the housebuilder will be removed from London’s flagship index from the market open on Monday, September 18.
The change ends Persimmon’s roughly 10-year spell among London’s blue-chips.
In the FTSE 250, Grafton added 2.5%.
The building materials distributor and DIY retailer reported a decline in half-year pretax profit but remained confident that its full-year adjusted operating profit will be in line with analyst expectations of £202.6 million.
In the six months ended June 30, the company reported a pretax profit of £93.6 million, down from £132.4 million the previous year.
The fall in profit came as Grafton recorded just £1.1 million in property profits in the half compared to £18.5 million the year prior, and as its finance expenses climbed to £12.5 million from £9.8 million.
More positively, revenue ticked up to £1.19 billion from £1.15 billion.
The company also announced its intention to start a new share buyback programme for up to £50.0 million. The news comes as the company completes a buyback that began on May 12 for a total of £50.0 million.
Elsewhere in London, PPHE Hotel jumped 4.6% after it reported a strong performance in the first half of 2023, boasting ‘record’ interim revenue and a return to pretax profit.
The hotel and resort operator swung to an interim pretax profit of £2.0 million from a loss of £26.1 million the year prior.
This came as the company reported ‘record’ revenue of £180.0 million, up 59% from £113.2 million the previous year and up 16% from £155.3 million in the same half of 2019.
PPHE said it now entering its strongest half of the year and said it is confident in its long-term growth.
It reiterated its expectations for the full year, expecting revenue of £400 million and earnings before interest, tax, depreciation and amortisation of £120 million.
On AIM, Ovoca Bio plunged 43% after it announced the top-line results from its phase 2 dose-ranging study assessing Orenetide did not show statistically significant superiority versus placebo on its co-primary endpoints.
The study evaluated the effect of a range of daily administered Orenetide doses on a lack or loss of sexual desire in 667 women.
In European equities on Thursday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was up 0.4%.
In Tokyo on Thursday, the Nikkei 225 index closed 0.9% higher. The S&P/ASX 200 in Sydney closed up 0.1%.
In China, the Shanghai Composite closed down 0.6%, while the Hang Seng index in Hong Kong closed 0.7% lower.
China’s biggest developer Country Garden faces a crunch vote on extending debt repayment terms that could determine whether it defaults, plunging the country’s property market deeper into turmoil.
The firm has racked up debts of more than $150 billion and this week reported a record ¥48.9 billion - around $6.7 billion - loss for the first six months of the year.
Country Garden warned Wednesday that it faced a default if its financial performance ‘continues to deteriorate’, adding it ‘felt deeply remorseful for the unsatisfactory performance’.
Bondholders are due to conclude a crunch vote Thursday on whether to extend repayment on a keynote worth $535 million.
Creditors have until 2200 CST, or 1500 BST, to decide on a proposal to postpone this payment, according to Bloomberg.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average closing up 0.1%, the S&P 500 up 0.4% and the Nasdaq Composite up 0.5%.
Stocks were buoyed as softer economic data in the US painted a picture of a slowing economy, raising the likelihood that US interest rates have peaked.
According to an updated estimate from the US Bureau of Economic Analysis, the US economy grew less than initially expected in the second quarter of 2023. In addition, data from ADP showed that job growth in the US private sector slowed significantly in August.
The dollar staged a small recovery on Thursday morning, after initially slumping in the wake of the weaker-than-expected US data on Wednesday.
The pound was quoted at $1.2720 at early on Thursday in London, down from $1.2732 at the close on Wednesday. The euro stood at $1.0902, lower against $1.0931.
Against the yen, the dollar was trading at JP¥145.76, virtually unchanged from JP¥145.75.
Further gains for the dollar were capped as investors waited for the all-important US non-farm payrolls figures on Friday. Investors are hoping for further signs that the US labour market is cooling.
Brent oil was quoted at $85.36 a barrel at early in London on Thursday, up from $84.70 late Wednesday. Gold was quoted at $1,945.11 an ounce, a touch higher against $1,945.03.
Still to come on Thursday’s economic calendar, the US weekly unemployment claims report will be published at 1330 BST.
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