Stock prices in London were a mixed bag at the close on Thursday, ahead of PCE data from the world’s largest economy.
On Friday, the core personal consumption expenditures inflation reading for June, the Federal Reserve’s preferred measure, is scheduled for release.
The FTSE 100 index closed up 32.66 points, 0.4%, at 8,186.35. The FTSE 250 ended down 66.49 points, 0.3%, at 20,884.35, and the AIM All-Share closed down 3.61 points, 0.5%, at 773.03.
The Cboe UK 100 ended up 0.4% at 816.71, the Cboe UK 250 closed down 0.3% at 18,294.02, and the Cboe Small Companies ended down 1.2% at 17,015.15.
In European equities on Thursday, the CAC 40 in Paris ended down 1.2%, while the DAX 40 in Frankfurt ended down 0.5%.
Stocks in New York were higher at the London equities close, with the DJIA up 0.9%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.1%.
The US economy picked up speed in the second quarter, and inflationary pressures eased by less than expected, data on Thursday showed.
According to the ‘advance’ estimate released by the US Bureau of Economic Analysis, real gross domestic product increased at an annual rate of 2.8% in the second three months to June. The FXStreet consensus forecast an increase to 2.0%.
In the first quarter, GDP had increased by 1.4%.
The BEA said the increase in GDP primarily reflected increases in consumer spending, private inventory investment, and non-residential fixed investment.
Analysts at ING said: ‘The economy is facing more challenges in the second half of the year and with the Fed sounding more relaxed on the path ahead for inflation, we expect a growing focus on activity to deliver rate cuts from September.’
In other economic news, the personal consumption expenditures price index increased by 2.6%, compared with an increase of 3.4% in the first quarter.
The growth in the core PCE index eased to 2.9% on-quarter, compared to 3.7% in the first quarter. The core PCE reading excludes food and energy, and it is the Federal Reserve’s preferred inflationary gauge. It had been expected to ebb to 2.7%.
Meanwhile, weekly initial jobless claims fell by more than expected in the latest week, figures from the Department of Labour showed.
In the week ending July 20, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 10,000 from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 243,000 to 245,000. A fall to 238,000 had been expected.
The pound was quoted at $1.2882 at the London equities close Thursday, lower compared to $1.2926 at the close on Wednesday. The euro stood at $1.0860 at the European equities close Thursday, higher against $1.0857 at the same time on Wednesday. Against the yen, the dollar was trading at JP¥153.88, up compared to JP¥153.44 late Wednesday.
In the FTSE 100, British American Tobacco closed up 4.6%.
BAT said its first-half performance for 2024 was in line with its expectations, and indicated that it is on track to deliver its full-year guidance.
The London-based cigarette and vaping products maker reported a 5.7% rise in pretax profit to £5.60 billion for the first half of 2024 from £5.30 billion a year earlier, boosted by profit from ‘associates and joint ventures’.
But revenue fell 8.2% to £12.34 billion from £13.44 billion, driven by the sale of businesses in Russia and Belarus in September 2023, and currency headwinds.
On the other hand, Centrica lost 9.9%.
Centrica, which owns British Gas, reported pretax profit of £1.63 billion for the six months that ended June 30, down sharply from £6.43 billion a year before, as revenue dropped by more than a third to £10.54 billion from £16.52 billion.
Despite the drop in half-year profit, Centrica raised its interim dividend by 13% to 1.50p from 1.33p a year before. The company also said it will extend its share buyback by another £200 million, to be completed by February next year.
The Windsor, England-based energy provider also confirmed that Chair Scott Wheway will step down this year, with Senior Independent Director Kevin O’Bryne promoted to take his place.
In the FTSE 250, IG Group edged up 4.7%.
The London-based contracts-for-difference trading platform reported that revenue fell to £987.3 million in the financial year ended May 31, down from £1.02 billion a year earlier.
Pretax profit fell by 11% to £400.8 million from £449.9 million.
IG also increased its total dividend to 46.2 pence from 45.2p, as well as announcing a new share buyback programme of £150 million to be completed by the end January next year.
On the other hand, Centamin lost 6.3%.
Pretax profit was $117.1 million, up 2.0% from $114.8 million, but basic earnings per share fell 9% to $7.19 from $7.86.
Revenue increased 8.5% to $465.1 million from $425.6 million.
Centamin declared an interim dividend of 2.25 US cents per share, ‘exceeding the minimum policy of distributing 30% of cash flow available for dividends’, up from 2.0 cents.
Brent oil was quoted at $81.75 a barrel at the London equities close Thursday, unchanged compared to late Wednesday. Gold was quoted at $2,366.60 an ounce at the London equities close Thursday, lower against $2,426.06 at the close on Wednesday.
In Friday’s UK corporate calendar, there are half year results from Natwest, Rightmove, and Segro.
The economic calendar for Friday has unemployment and retail sales data from Spain. There is also a French consumer confidence reading.
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