The FTSE 100 edged higher early Thursday, as investors nervously wait for the European Central Bank’s interest rate decision.
The FTSE 100 index opened up 20.25 points, 0.3%, at 7,546.24. The FTSE 250 was down 17.36 points, 0.1%, at 18,544.14, and the AIM All-Share was up 3.46 points, 0.5%, at 744.21.
The Cboe UK 100 was up 0.2% at 751.99 the Cboe UK 250 was down 0.1% at 16,198.03, and the Cboe Small Companies was up 0.1% at 1,481.05.
There was some bad news for UK housebuilders, as house prices declined at their fastest rate since 2009 in August, according to surveyors. The Royal Institution of Chartered Surveyors said a net balance of 68% of property professionals reported house prices falling rather than rising, marking the most negative reading since 2009.
Further, controversial government plans to relax environmental rules to boost housebuilding have been scuppered by peers. The House of Lords voted by 192 to 161, majority 31, against scrapping EU-era rules that force developers to mitigate the impact new homes have on river health.
In the FTSE 100, shares in Persimmon fell 0.9%, as Barratt Developments lost 0.2%.
The index’s top performers were Anglo American, up 2.7% as JPMorgan raised the miner’s price target, and Rio Tinto, which the US bank raised to ’neutral’ from ’underweight’.
There was more happening in the FTSE 250 on Thursday.
Trainline jumped 14%, as the company reported stronger-than-expected interim trading, and launched a new share buyback.
In the six months to August 31, the online rail ticket seller’s total net ticket sales jumped 23% year-on-year to £2.65 billion, driving revenue up 19% to £197 million. It reconfirmed its guidance expectations for the financial year as a whole. It also announced a new capital allocation framework, and launched a share buyback of up to £50.0 million to take place over the next 12 months.
Hilton Foods rose 6.6%.
The food packaging firm announced a long-term supply agreement with Wal-Mart Canada. The deal will see Hilton open a new manufacturing facility in Eastern Canada, to supply Walmart’s supercentres with a range of protein products.
Elsewhere on the main market, THG dropped 10%.
The e-commerce retail group, which trades as The Hut Group, reported a weaker first half of 2023. Revenue fell to £969.3 million from £1.07 billion a year before, as pretax loss widened to £133.0 million from £108.2 million. ‘Our strategy of supporting our consumers through 2022, sacrificing margins in the short-term, is bearing fruit,’ said CEO Matthew Moulding, pointing to the firm’s adjusted Ebitda and cash figures. Its Beauty division has returned to growth since the start of August.
The company said revenue momentum exiting the third quarter gives it confidence in continuing revenue growth of 0% to minus 5% in the year as a whole.
In Asia on Thursday, the Nikkei 225 index in Tokyo closed down 0.2%. In China, the Shanghai Composite added 0.1%, while the Hang Seng index in Hong Kong was up 0.2% in late dealings. The S&P/ASX 200 in Sydney closed up 0.5%.
Markets were fairly sanguine, despite Wednesday’s hotter-than-expected US inflation print.
In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.2%, the S&P 500 up 0.1% and the Nasdaq Composite up 0.3%.
The consumer price index increased to 3.7% on an annual basis in August, from a 3.2% rise in July. The headline inflation figure was expected to accelerate to 3.6%, according to FXStreet-cited market consensus. Core inflation cooled annually, but edged up by slightly higher than expected from the prior month.
SPI Asset Management’s Stephen Innes said the cooling of annual core inflation and the recent cooling labour market data will ‘likely seal the deal’ for a rate pause from the Federal Reserve next week.
‘Nevertheless, given the disconcerting uptick in headline inflation and the ongoing ascent of oil prices, the Federal Reserve is likely to maintain the option of another rate hike should the trend of inflation moderation witnessed over the summer fail to persist,’ he added.
The dollar was weaker in early transactions in Europe.
Sterling was quoted at $1.2485 early Thursday, lower than $1.2496 at the London equities close on Wednesday. Against the yen, the dollar was quoted at JP¥147.15, down versus JP¥147.42.
It’s the ECB’s turn to announce its latest interest rate decision at 1315 BST, with many forecasters predicting a final 25 basis point hike. However, some predict the Frankfurt-based central bank might opt to keep rates on hold.
The euro traded at $1.0739, losing ground on $1.0744. In European equities, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was down 0.3%.
Investors will be eyeing the year’s biggest initial public offering in New York later on Thursday.
British chip designer Arm is targeting a valuation of more than $52 billion for its initial public offering on the Nasdaq exchange.
Arm, whose semiconductor design is integrated into the vast majority of smartphones worldwide, has priced its shares at $51. This gives it a valuation at the top end of its target range, underscoring the enthusiasm among investors amid an explosion of interest in artificial intelligence.
The company, which is a world leader in smartphone chip design and is owned by the Japanese tech investor SoftBank, has announced it will list on the tech-rich Nasdaq stock exchange under the ‘ARM’ ticker.
Gold was quoted at $1,906.88 an ounce early Thursday, lower than $1,912.70 on Wednesday. Brent oil was trading at $92.49 a barrel, up from $92.15.
In addition to the ECB decision, Thursday’s economic calendar has the US weekly unemployment claims report at 1330 BST alongside US retail sales data and the latest US producer price index print.
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