Stocks in London closed mostly lower on Tuesday, as investors nervously eye this week’s US inflation print.
The FTSE 100 index closed down 10.23 points, 0.1%, at 7,683.96. The FTSE 250 ended down 99.78 points, 0.5%, at 19,294.02, and the AIM All-Share closed up 1.84 points, or 0.3%, at 752.66.
The Cboe UK 100 ended flat at 767.86, the Cboe UK 250 closed down 0.8% at 16,767.71, and the Cboe Small Companies ended down 0.1% at 14,937.27.
Stocks in New York were lower at the London equities close, with the Dow Jones Industrial Average down 0.7%, the S&P 500 index down 0.5%, and the Nasdaq Composite down 0.3%.
On Monday, stocks in New York leapt, with tech stocks especially in vogue. The Dow rose 0.6%, the S&P ended up 1.4% and the Nasdaq surged 2.2%.
However, Monday’s tech rally fizzled out on Tuesday, ahead of a key US inflation read later this week. The US consumer price reading for December is due out at 1330 GMT on Thursday.
The print might give some clues on the US Federal Reserve’s next policy move, and beyond that, whether a rate cut in March materialises. There is a 62% chance the Fed cuts rates in March, according to the CME FedWatch Tool.
In December, the Fed kept interest rates at a 22-year high and hinted at three rate cuts in 2024.
In European equities on Tuesday, the CAC 40 in Paris ended down 0.3%, while the DAX 40 in Frankfurt fell 0.2%.
The Federal Reserve announces its first interest rate decision of the year on January 31. The Bank of England follows suit a day later. The first European Central Bank decision of the year is on January 25.
The pound was quoted at $1.2703 at the London equities close Tuesday, down from $1.2757 at the close on Monday. The euro stood at $1.0923 at the European equities close Tuesday, lower against $1.0974. Against the yen, the dollar was trading at JP¥144.35, up from JP¥143.84 late Monday.
In early local news, UK retail sales growth was weaker in December, according to figures from the British Retail Consortium.
The latest BRC-KPMG tracker for 2023 showed retail sales increased by 3.6% from 2022. Annually, food growth was up 8.1% and non-food declined by 0.1%.
UK total retail sales increased by 1.7% in December, against growth of 6.9% in December a year earlier. This was below the 3-month average growth of 2.3% and below the 12-month average growth of 3.6%. The period covers the five weeks November 26 to December 30.
In the FTSE 100, sportswear retailers JD Sports and Frasers Group fell 3.9% and 1.4%. Primark-owner AB Foods lost 0.6%.
Meanwhile, B&M fell 0.4%.
The Luxembourg-headquartered variety goods retailer declared a special dividend of 20.0p after a stellar Christmas period.
Sales rose by 5% on a year before in its ‘golden quarter’, the 13 weeks leading up to Christmas.
AJ Bell’s Russ Mould said investors ‘can find reassurance’ in the special dividend, saying the ‘dividend may not have been declared if management was feeling worried about the outlook.’
In the FTSE 250 index, Jupiter Fund Management slumped 14% as it suffered higher net outflows than expected in the fourth quarter of 2023, and announced a manager of several of its most important funds will depart in July.
Ben Whitmore, the current manager of the Jupiter UK Special Situations Fund, Jupiter Income Trust, Jupiter Global Value Unit Trust, and Jupiter Global Value SICAV, as well as £4.8 billion of segregated mandates, will leave the company at the end of July, having been with Jupiter since 2006.
Whitmore will be replaced in part by a recruit from JO Hambro Capital Management.
Hays lost 7.6%, after it reported ‘a more difficult December’.
The London-based recruitment company said second-quarter group fees fell 10% annually on a like-for-like basis, with a slowdown seen in December.
Hays added it expects pre-exceptional operating profit for the six months to December 31 to be around £60 million, lower than current market expectations of £73 million. For the six months to December 31, 2022, it had reported operating profit of £97.0 million.
Robert Walters lost 9.5% in a negative read-across.
On London’s AIM, shares in Zytronic fell 22%, after a number of setbacks resulted in disappointing revenue for the year.
The touch sensors manufacturer’s revenue dropped 30% to £8.6 million from £12.3 million the year before. Gaming and vending market headwinds also slashed the company’s sales in these two sectors, which declined by £2.3 million and £1.0 million, respectively.
The group attributes the disappointing sales results to a number of externalities. Electronic component shortages, a lack of trade events in previous years due to the Covid pandemic and the resignation of several key staff, including Zytronic’s sales and marketing director, have also inhibited recovery, the company said.
Brent oil was quoted at $77.81 a barrel at the London equities close Tuesday, up from $75.73 late Monday.
Gold was quoted at $2,029.09 an ounce at the London equities close Tuesday, down against $2,032.33 at the close on Monday.
In Wednesday’s UK corporate calendar, there are trading statements from grocer Sainsbury’s and housebuilder Persimmon.
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