Stock prices in London opened mixed on Wednesday, with the FTSE 100 rising on strong updates from large-caps, but the FTSE 250 was dragged into the red as Aston Martin tumbled.
The FTSE 100 index opened up 10.87 points, 0.2%, at 7,332.59. The FTSE 250 was down 12.42 points, 0.1%, at 17,070.63, and the AIM All-Share was up 1.13 points, 0.2%, at 680.98.
The Cboe UK 100 was up 0.2% at 731.19, the Cboe UK 250 was down 0.1% at 14,837.88, and the Cboe Small Companies was slightly lower at 12,589.71.
In European equities, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.3%.
With the Israel-Hamas war seeming to remain fairly contained for now, investors’ focus was locked on the upcoming interest rate decision from the US.
The Federal Reserve is widely anticipated to leave interest rates where they are at its November meeting, and will be hoping that the recent rise in bond yields will help to do some of the heavy lifting. The decision will be announced at 1800 GMT.
‘The communication from the Federal Reserve in October strongly indicated that the [Federal Open Market] Committee believes the recent increase in long-term Treasury yields, particularly the substantial repricing of the term premium, is effectively tightening financial conditions,’ said SPI Asset Management’s Stephen Innes.
Sterling was quoted at $1.2152 early Wednesday, higher than $1.2128 at the London equities close on Tuesday. The euro traded at $1.0563, little changed from $1.0562.
In early local economic news, the annual pace of decline in UK house prices eased somewhat in October, according to Nationwide data on Wednesday, as prices rose on a monthly basis.
On a seasonally-adjusted basis, UK house prices rose 0.9% in October from September, compared to the 0.1% rise in September from August.
On an annual basis, prices were 3.3% lower in October, slowing from the 5.3% decline seen in September.
‘The uptick in house prices in October most likely reflects the fact that the supply of properties on the market is constrained. There is little sign of forced selling, which would exert downward pressure on prices, as labour market conditions are solid and mortgage arrears are at historically low levels,’ said Robert Gardner, Nationwide’s chief economist.
The Bank of England will announce its interest rate decision on Thursday, with the market anticipating it will hold interest rates once again.
In the FTSE 100, GSK rose 1.7% as it upgraded its annual guidance, after a strong third quarter.
For 2023, the pharmaceutical firm now expects turnover to grow between 12% and 13%, compared to a prior range of 8% to 10%. Adjusted operating profit is now forecast to rise between 13% and 15%, compared to 11% to 13% before. The figures refer to constant exchange rate growth and exclude Covid-19 solutions. In the third quarter, turnover rose to £8.15 billion from £7.83 billion a year before. Pretax profit was £1.79 billion, rising sharply from £1.01 billion. It declared a third-quarter dividend of 14 pence, and expects 56.5p for the whole year.
‘Competitive performance was broadly based but benefitted particularly from the outstanding US launch of Arexvy, the world’s first RSV vaccine,’ said CEO Emma Walmsley.
Next rose 1.6% as it upped its annual pretax profit guidance by £10 million to £885 million, as full price sales in the third quarter came in ahead of guidance.
The retailer said full price sales in the period from August to October grew 4.0% annually, ahead of guidance of 2.0%. For the financial year as a whole, it expects full price sales to grow 3.1% to £4.74 billion, assuming they see 2.0% growth in the remainder of the year. However, it noted sales growth has been variable in recent months, which it attributes to changing weather conditions as opposed to underlying changes in the consumer economy.
At the other end of the FTSE 100 were Segro down 3.1%, as Goldman Sachs cut the stock to ’sell’. BP fell 1.1%, as JPMorgan cut the stock to ’underweight’ from ’neutral’, after its third-quarter results missed profit estimates on Tuesday.
In the FTSE 250, Aston Martin Lagonda Global dropped 10%.
The luxury sports car manufacturer said third-quarter revenue rose 15% to £362.1 million year-on-year from £315.5 million, and pretax loss narrowed to £117.6 million from £225.9 million. It left most of its guidance for 2023 unchanged, but trimmed wholesales volumes guidance to around 6,700 units from previous guidance of around 7,000 units.
Against the yen, the dollar was quoted at JP¥151.33, down versus JP¥151.63.
The yen found some strength after Japan’s top currency official said that Tokyo was ‘on standby’ to intervene after the yen fell to a new year-low against the dollar and plunged against the euro, Bloomberg reported.
‘We’re on standby,’ currency official Masato Kanda told reporters, according to Bloomberg News. ‘But I can’t say what we’ll do, and when – we’ll make judgements overall, and we’re making judgements in a state of urgency.’
In Japan on Wednesday, the Nikkei 225 index in Tokyo was closed up 2.4%. Toyota closed up 4.7%, as the carmaker increased its annual profit forecast, crediting cost-cutting efforts and the weaker yen.
In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong closed marginally lower.
Chinese manufacturing returned to a mild state of contraction in October, survey data revealed. The Caixin manufacturing purchasing managers’ index fell to 49.5 points in the month from 50.6 in September. Falling below the 50-point no-change mark, it shows activity fell in the sector.
The S&P/ASX 200 in Sydney closed up 0.9%.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average down 0.4%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.5%.
Gold was quoted at $1,976.94 an ounce early Wednesday, lower than $1,989.19 on Tuesday.
Brent oil was trading at $85.55 a barrel, down from $86.09.
Wednesday’s global economic calendar has further manufacturing PMIs from the UK and the US.
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