European equities were mixed on Thursday morning, ahead of the European Central Bank’s next interest rate decision this afternoon.
The FTSE 100 index opened up 2.10 points at 7,963.31. The FTSE 250 was down 4.02 points at 19,797.73, and the AIM All-Share was up 1.13 points, 0.2%, at 756.32.
The Cboe UK 100 was up 0.1% at 796.00, the Cboe UK 250 was up 0.1% at 17,216.17, and the Cboe Small Companies wasdown 0.2% at 14,720.34.
In European equities on Thursday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was down slightly.
Thursday’s economic calendar has an interest rate decision from the European Central Bank. It is due out at 1315 BST and markets are widely expecting the central bank to keep rates unchanged.
Investors will be eyeing the press conference which will follow, in hopes of some hints on the ECB’s expected timing of rate cuts.
Across the Atlantic, hopes of a June rate cut were almost crushed on Wednesday, sending stocks in New York lower.
In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.1%, the S&P 500 down 1.0% and the Nasdaq Composite down 0.8%.
Inflation data from the US on Wednesday came in stronger than expected, forcing the market to reassess the timing of an easing in monetary policy.
According to the Bureau of Labor Statistics, the year-on-year rate of US consumer price inflation picked up to 3.5% last month, from 3.2% in February, taking it further above the Fed’s 2% inflation target.
The rate of consumer price inflation had been expected to pick up to just 3.4%, according to FXStreet cited consensus.
There were also minutes from the US Federal Reserve to digest on Wednesday.
Federal Reserve officials said they required more confidence that inflation was moving towards its 2% target before cuts to interest rates could be considered, minutes from the March Federal Open Market Committee meeting showed.
‘Wednesday’s inflation report dealt a significant blow to the Federal Reserve’s aspirations for a soft landing as, once again, inflation outpaced expectations,’ said SPI Asset Management’s Stephen Innes.
‘Hotter-than-expected prices force Fed officials back into a cautious stance, where they must await further clarity on inflation dynamics and tangible signs of economic deceleration before even entertaining a rate cut before Q4.’
Still to come on Thursday, there is a producer price reading from the US. It is expected to deliver more data which will dampen hopes of interest rate cuts.
According to FXStreet, the US producer price index is expected to come in at 2.2% in March, picking up from 1.6% in February.
The pound was quoted at $1.2539 early on Thursday in London, down compared to $1.2546 at the equities close on Wednesday. The euro stood at $1.0737, lower against $1.0743. Against the yen, the dollar was trading at JP¥153.10, up compared to JP¥152.88.
In the FTSE 100, AstraZeneca rose 1.0%.
The pharmaceutical company said it plans to increase its dividend for 2024 by 7% to $3.10 per share, from $2.90 a year prior.
Chair Michel Demare said: ‘This uplift is in line with our progressive dividend policy, which remains unchanged, and reflects the continuing strength of AstraZeneca’s investment proposition for shareholders.’
Kingfisher jumped 3.8%, after HSBC raised the retailers broker rating to ’buy’.
The bank also raised Smiths Group’s rating to ’buy’. The engineering company’s stock rose by 2.1%.
In the FTSE 250, Darktrace rose by 8.3%, thanks to a jump in its annual guidance.
The Cambridge, England-based cybersecurity company said at constant currency rates, annualised recurring revenue at March 31 was $731.1 million, representing growth of 24% from $583.6 million a year ago. Revenue in its third quarter jumped 24% to $176.1 million from $139.2 million a year prior.
Looking ahead, Darktrace narrowed its guidance range for constant currency ARR, and now expects growth of between 22.3% and 23.0%, from 21.5% to 23.0% previously.
The firm also raised its expectations for year-on-revenue growth and adjusted Ebitda margin, and now expects revenue growth of at least 25.5%, up from its previous 23.5% and 25.0% range.
On London’s AIM, Lok’n Store shares rose by 16%.
Brussels-based Shurgard, the largest developer, owner and operator of self-storage facilities in Europe, said it has reached an agreement to buy the self storage provider for £378 million.
Under the agreement, Lok’n Store shareholders will receive 1,110 pence in cash per share. This represents a 6% premium to the closing price of 958p on Wednesday.
Chair Andrew Jacobs said: ‘Lok’nStore’s board believes the offer represents significant value for Lok’nStore’s shareholders, recognising the quality of Lok’nStore’s real estate portfolio and operational strength. Over the years Lok’nStore has built a unique portfolio of purpose-built self-storage assets. We believe that integrating Lok’nStore’s assets and operations into Shurgard is highly complementary considering Lok’nStore’s asset locations and positioning in its markets.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 0.4%. In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P/ASX 200 in Sydney closed down 0.4%
Brent oil was quoted at $90.47 a barrel early in London on Thursday, up from $89.31 late Wednesday. Gold was quoted at $2,338.60 an ounce, higher against $2,334.91.
Still to come on Thursday’s economic calendar, there is a producer price reading from the US, as well as the weekly initial jobless claims.
Copyright 2024 Alliance News Ltd. All Rights Reserved.
