The dollar was easing back against the pound and other currencies midday Thursday, as traders repositioned their exposures ahead of a likely market-moving US inflation print.
The FTSE 100 index was up just 3.18 points at 6,829.33 around midday. The FTSE 250 surged 152.25 points, or 0.9%, to 16,763.41. The AIM All-Share slipped 0.29 of a point to 775.98.
The Cboe UK 100 was marginally higher at 682.07 points, the Cboe UK 250 up 0.7% to 14,324.21, and the Cboe Small Companies up 0.6% at 12,381.90.
In European equities on Thursday, the CAC 40 was up 0.3% in Paris, while the DAX 40 in Frankfurt was 0.7% higher.
Markets are heading towards ‘high noon’, Societe Generale analyst Kit Juckes commented about the 1230 GMT release of the US consumer price index for September.
‘Markets are quiet, reminiscent of a scene in an old western before a gunfight. It's not often that an economic data release has as much power over sentiment as this afternoon's US CPI release,’ Juckes added.
Annual US consumer price growth is expected to have slowed to 8.1% in September from 8.3% in August. Markets are on edge, however, as August's figure had come in ahead of market consensus of 8.1%. A slowdown in the headline rate is not a foregone conclusion, despite consensus expectations.
Ahead of the reading, the dollar was largely lower on Thursday, though still ascendant.
Sterling rose markedly to $1.1147, ignoring a worrying lack of confidence in the UK government's fiscal plans, from $1.1066 at the time of London stock market close on Wednesday.
The euro rose to $0.9723 from $0.9702. Against the yen, the dollar faded to JP¥146.80 from JP¥146.90.
It was expected that some foreign currency traders would scale back dollar bets ahead of the inflation release, SPI Asset Management analyst Stephen Innes commented.
‘One would expect risk reduction, or reducing USD longs, into the US CPI. This is very normal,’ Innes explained.
A hotter-than-expected US inflation print would see sterling and the euro give back their European morning gains on the greenback, however.
‘The dollar is a little heavy, but in mostly narrow ranges ahead of the September CPI, said Bannockburn Global Forex. ’The headline is expected to soften for the third consecutive month, but the core rate is seen firming back to the high set in March.
‘We had thought the dollar could be vulnerable to a buy the rumour sell the fact type of activity, but the intraday momentum indicators suggest this may not materialize immediately after the CPI report.’
Going into the reading, stocks in New York are called higher. The Dow Jones Industrial Average and S&P 500 are called up 0.4% and the Nasdaq Composite up 0.2%.
A barrel of Brent oil was quoted at $92.51 midday Thursday London time, flat from $92.55 late Wednesday. Gold was quoted at $1,674.65 an ounce, up from $1,670.16.
In London, Entain shares rose 4.2%, the best blue-chip performer.
The gambling operator backed annual guidance as it looks to a final quarter boosted by the football World Cup.
In the third quarter of 2022, net gaming revenue rose 2%, but was flat at constant currency. Online net gaming revenue was up 1%, but down 2% at constant currency, an outturn Entain largely expected.
Looking ahead, the Ladbrokes owner's fourth quarter will benefit from the World Cup, as well as easier comparatives due to Covid-19 and the temporary closure of its Dutch arm. The latter annualised from the start of this month.
Meanwhile, its US fortunes are improving. The BetMGM joint-venture, which Entain owns alongside MGM Resorts International, has a 25% market share in the areas in which it operates. That excludes New York.
Third-quarter net gaming revenue in the US surged 90% to $400 million, helped by the start of the US National Football League season. Same-state revenue was up 50%.
The US market is a burgeoning one for firms such as Entain and Paddy Power-owner Flutter Entertainment. It contrasts with the UK market which is facing increased regulatory scrutiny.
Flutter shares were up 2.0% in a positive read across from Entain's numbers.
Elsewhere in the gambling sector, software firm Playtech added 5.1%. Numis raised the stock to 'buy' from 'add'.
Grosvenor casino-owner Rank Group said it has not struggled to get punters through the doors, but has been hurt by their reduced spending once inside. Shares were down 7.7% at midday.
In the three months to September 30, group net gaming revenue rose 2% year-on-year on a like-for-like basis to £165.7 million. At Grosvenor alone, this was a 5% decline.
‘Grosvenor venues saw visits grow in the quarter, however, with lower spend per visit,’ Rank explained. It expects consumer spending to remain under ‘significant pressure’.
Elsewhere in London, Zotefoams added 25%. The lightweight foams maker said revenue in the third quarter of 2022 was up 27% year-on-year.
Demand is resilient and revenue and margins are benefiting from measures to contain the impact of cost inflation. Zotefoams also is being boosted by a weaker sterling.
It now expects adjusted pretax profit to be ‘significantly ahead’ of market expectations, which currently stand at £9.3 million.
The Wall Street earnings season continued on Thursday, with numbers from investment firm BlackRock.
BlackRock saw its assets fall by more than a staggering $1 trillion in the third quarter, with the world's largest fund manager's Retail and ETF funds getting battered.
BlackRock ended September 30 with total assets under management of $7.961 trillion, falling 16% from $9.464 trillion at the same point a year earlier.
BlackRock shares were 0.7% higher in pre-market trade in New York, however.
On Friday, JPMorgan and Wells Fargo report third-quarter results.
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