Stocks in London closed higher on Wednesday, but the FTSE 100 was held back over rising Covid-19 infections hurting China’s oil demand.
The FTSE 100 index closed up 31.10 points, 0.4%, at 7,585.19. The FTSE 250 ended up 256.73 points, 1.3%, at 19,391.07 and the AIM All-Share closed up 5.30 points, 0.6%, at 843.93.
The Cboe UK 100 ended up 0.4% at 758.45, the Cboe UK 250 closed up 1.4% at 16,824.02, and the Cboe Small Companies ended up 1.0% at 13,612.46.
Investors were looking ahead to the Federal Open Market Committee meeting minutes from December, which are due to be released at 1900 GMT. They will be looking for clues as to the central bank’s thinking behind its recent 50 basis point hike, and the potential trajectory of interest rates.
Meanwhile, the latest data showed the downturn in the US manufacturing sector deepened in December, according to the latest figures from the Institute for Supply Chain Management on Wednesday.
The ISM manufacturing purchasing managers’ index fell deeper into contraction at a reading of 48.4 in December, from 49.0 in November.
The reading confirmed a separate PMI survey from Tuesday from S&P Global, showing a reading of 46.2 in December, worsening from 47.7 in November.
There was also the latest US job openings and labour turnover summary from the Bureau of Labor Statistics.
Job openings were little changed in November, edging down by 54,000 to 10.46 million from a revised figure of 10.51 million in October.
In addition, the number of hires in November fell by 56,000 to 6.06 million, from 6.11 million in October.
‘The JOLTs data provided little in the way of support for a cooling job market... Though we do expect easing in the months ahead as the economy cools and enters a recession in Q2, today’s report keeps the Fed on track to lift rates again at February’s meeting,’ commented Matthew Martin, US economist at Oxford Economics.
Stocks in New York were higher at the London equities close, with the DJIA up 0.3%, the S&P 500 index up 0.6%, and the Nasdaq Composite up 0.5%.
US stocks had mostly dipped into the red upon the release of the PMI and jobs data at 1500 GMT, before staging a recovery.
The dollar was mostly weaker against major currencies ahead of the FOMC minutes, but firmed against the yen.
The pound was quoted at $1.2054 at the London equities close on Wednesday in London, higher compared to $1.1980 late Tuesday. The euro stood at $1.0598, higher against $1.0550.
Against the yen, the dollar was trading at JP¥131.87, higher compared to JP¥130.89.
Meanwhile, Brent oil was quoted at $78.07 a barrel, down significantly from $83.03, as investors grew concerned about lower demand from the world’s biggest importer China, amid a steep rise in Covid infections in the country.
The World Health Organization criticised China’s ‘very narrow’ definition of Covid deaths, warning that official statistics were not showing the true impact of the outbreak.
‘We still do not have complete data,’ the WHO’s emergencies director Michael Ryan told reporters.
‘We believe that the current numbers being published from China under-represent the true impact of the disease in terms of hospital admissions, in terms of ICU admissions, and particularly in terms of deaths,’ Ryan said.
Oil majors BP and Shell were weighing on the FTSE 100, down 3.6% and 3.5% respectively.
The dimmer prospects for mineral demand from China also drove mining stocks lower. Glencore fell 6.9%, with Anglo American down 2.7%.
The price of gold was firming, however, on account of the weaker dollar. Gold was quoted at $1,857.48 an ounce on Wednesday, sharply higher against $1,829.14 late Tuesday.
Mexico-focused gold and silver miner Fresnillo, surged 7.3%.
Online grocery Ocado was also putting in a strong performance, up 9.0%.
Data from Kantar showed Ocado sales increased by 8.2% year-on-year in the 12 weeks to Christmas Day, as it maintained a market share of 1.7%.
Tesco sales, meanwhile, grew by 6.0%. It remained the UK’s most popular supermarket though its market share slipped to 27.5% from 27.9%. Peer Sainsbury saw sales growth of 6.2%, though its market share fell to 15.5% from 15.7%.
Shares in Sainsbury’s and Tesco closed up 4.8% and 2.6% respectively.
Meanwhile, FTSE 250-listed Wizz Air climbed 10%, as easyJet gained 7.5%. The airlines received a boost from positive passenger numbers from low-cost peer Ryanair.
The Dublin-based firm said passenger numbers grew 21% to 11.5 million in December from 9.5 million the previous year.
Ryanair said it operated over 65,500 flights in December with a load factor of 92%, compared to 81% a year prior.
On AIM, United Oil & Gas plunged 18% as it said drilling had failed to find hydrocarbons at the Abu Sennan licence.
The oil and gas company with exploration and appraisal assets in the Abu Sennan licence, onshore Egypt, announced it completed its drilling operations on the ASW-1X exploration well, drilling the well to a depth of 3,640 metres.
The company said although the well encountered net reservoir in the Abu Roash, Bahariya, and Alam El Bueib targets, the logs did not indicate that there were hydrocarbons present.
The ASW-1X well will be plugged and abandoned, and the Sino Tharwa-1 rig will be used to drill the ASH-8 development well, the first of the 2023 drilling campaign, the company said.
In European equities on Wednesday, the CAC 40 in Paris ended up 2.2%, while the DAX 40 in Frankfurt ended up 2.1%. Warmer-than-expected weather had brightened the mood on the continent, easing fears over gas shortages.
Sentiment was also lifted by a better-than-expected PMI reading for the eurozone.
The eurozone economy remained in a downturn at the end of 2022, though displayed some signs of improvement, data from S&P Global showed on Wednesday.
The seasonally adjusted S&P Global eurozone composite purchasing managers’ index output index was 49.3 in December, up from 47.8 in November. Market consensus, as cited by FXStreet, had expected a reading of 48.8.
In the global calendar for Thursday, there’s are services PMIs from China and Ireland overnight, with the UK to follow at 0930 GMT, and the US at 1600 GMT.
On the corporate side, there will be post-Christmas trading update from clothing retailer Next, bakery chain Greggs, and budget retailer B&M.
By Elizabeth Winter, Alliance News senior markets reporter
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