Stocks in London opened mixed on Monday, with the FTSE 100 lifted by mining stocks following the latest economic data from China.
The FTSE 100 index opened up 27.35 points, 0.4%, at 7,505.54. The FTSE 250 was down 93.62 points, 0.5%, at 18,556.81. The AIM All-Share was down 0.81 of a point, or 0.1%, at 742.63.
The Cboe UK 100 was up 0.8% at 751.25, the Cboe UK 250 was 1.0% at 16,232.40, and the Cboe Small Companies was down 0.1% at 13,553.67.
In European equities on Monday, the CAC 40 in Paris was down 0.9%, while the DAX 40 in Frankfurt was down 0.7%.
Investors are awaiting a busy week of interest rate decisions and economic data. There is UK unemployment data on Tuesday, a US inflation print on Wednesday and the European Central Bank’s next interest rate decision on Thursday.
‘This week, the US inflation numbers will give the dollar a fresh direction, and hopefully a softish one,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
‘The Fed will likely hold fire when it meets this month, but nothing is less sure for the November meeting. This week’s inflation data will be played in terms of November expectations.’
According to FXStreet data, core CPI - which excludes food and energy - is expected to edge up 0.2% month-on-month in August, unchanged from July’s rise.
The next interest rate decision in the US is on September 20.
Currently, markets see a 93% chance of interest rates standing pat at the Federal’s Reserve next meeting, according to the CME FedWatch Tool. At the following meeting in November, however, markets see a 42% chance of the Fed lifting rates by 25 basis points.
The Fed has raised its benchmark lending rate 11 times over the past 18 months to a level not seen for 22 years as it grapples with inflation.
Before the US interest rate decision, the ECB will be deciding its own on Thursday.
Lloyds said that the Frankfurt-based bank’s decision on whether to pause or to hike for a tenth consecutive meeting is ‘on a knife-edge.’
The pound was quoted at $1.2518 early on Monday in London, higher compared to $1.2477 at the equities close on Friday. The euro stood at $1.0734, higher against $1.0715.
Against the yen, the dollar was trading at JP¥146.06, lower compared to JP¥147.64.
The Japanese currency picked up after sinking last week to a 10-month low against the dollar, with support coming from comments seen as hawkish by Bank of Japan boss Kazuo Ueda. He told the Yomiuri newspaper that policymakers would have a better idea later in the year about wage rises, a key data point for rate decisions.
The yen has tumbled around 10% owing to the BoJ’s refusal to move away from its ultra-loose monetary policy, even as the Fed pushed borrowing costs to a two-decade high.
Equities in Japan headed lower on account of the stronger yen, with the Nikkei 225 index in Tokyo closing down 0.4%. In China, the Shanghai Composite closed up 0.8%, while the Hang Seng index in Hong Kong was down 0.5% in late trade. The S&P/ASX 200 in Sydney closed up 0.5%.
In the FTSE 100, China-exposed miners Fresnillo, Anglo American, Rio Tinto and Glencore were up 5.6%, 3.0%, 2.6% and 2.3%, respectively.
Over the weekend, China’s National Bureau of Statistics reported that consumer prices in the country edged up slightly on an annual basis in August.
The consumer price index was 0.1% higher annually in August, compared to a 0.3% deflation in July. This underperformed against FXStreet-cited expectations, which anticipated a 0.2% increase.
Melrose Industries lost 2.7%. RBC cut the aerospace manufacturer to ’sector perform’.
In the FTSE 250, Vistry rose 13%, after it reported a ‘robust’ financial performance in the first half of 2023.
Revenue in the period rose 33% to £1.58 billion from £1.19 billion a year earlier. Pretax profit edged up 2.6% to £114.2 million from £111.3 million.
The Kent-based housebuilder said it is revising its strategy to focus solely on building affordable homes through its ‘high return’ Partnerships division, to help address the UK’s ‘chronic shortage of affordable mixed tenure housing’.
Looking ahead, Vistry said it intends to launch a share buyback of up to £55 million in November.
Amongst London’s small-caps, Restaurant Group rose 5.3%.
Restaurant Group confirmed it has agreed to sell its ‘challenged’ Frankie & Benny’s and Chiquito chains to the owner of Bella Italia, Las Iguanas and Banana Tree, saying this will reduce its debt and improve its profit margin.
The buyer, Big Table Group Ltd, will pay a nominal £1 for Restaurant Group’s loss-making Leisure business and will receive a ‘contribution’ from Restaurant Group of £7.5 million.
Restaurant Group said the disposal of its Leisure business, which consists primarily of 75 Frankie & Benny’s and Chiquito restaurants, is expected to complete at the start of the fourth quarter of this year. It already had been in the process of closing loss-making sites in the division, and any sites already closed will remain the responsibility of Restaurant Group.
Barkby shares more than doubled to 8.40 pence.
It said it is exploring options to maximise shareholder value from its subsidiary, Cambridge Sleep Sciences, the science-based sleep technology business behind SleepEngine.
‘We expect CSS to become a significant business in its own right and the purpose of the strategic review is to evaluate the most appropriate corporate setting and structure for the company to allow it to develop its full potential as well as what is in the best interests of Barkby’s shareholders,’ said Chair Charles Dickson.
Barkby noted that there can be no certainty that any offer or sale will ultimately be made for CSS or the value of any such proposed deal.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.2%, while the S&P 500 and the Nasdaq Composite were up 0.1%.
Brent oil was quoted at $90.43 a barrel early in London on Monday, down from $90.70 late Friday.
Gold was quoted at $1,927.91 an ounce, up against $1,921.00.
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