London's FTSE 100 nudged cautiously higher on Thursday, as the pound's momentum finally waned, while European equities closed mixed as traders digested a rate hike by the European Central Bank.
The FTSE 100 index, stacked with firms that count their earnings in dollars, closed up 17.62 points, or 0.3% at 7,073.69 on Thursday. The pound was quoted at $1.1573 at the London equities close Thursday, down from $1.1612 at the close on Wednesday. A weaker pound is a tailwind for the FTSE.
The FTSE 250 ended down 23.97 points, or 0.1%, at 18,081.92. The AIM All-Share closed down just 0.21 of a point at 809.46.
The Cboe UK 100 ended up 0.4% at 707.04, the Cboe UK 250 closed up 0.2% at 15,534.37, and the Cboe Small Companies ended up 0.3% at 12,385.01.
In European equities on Thursday, the CAC 40 in Paris ended down 0.5%, while the DAX 40 in Frankfurt ended up 0.1%.
The European Central Bank on Thursday lifted its benchmark interest rates by 75 basis points, as expected.
The ECB is keen to keep a lid on inflation, which 'remains far too high'. Inflation will stay above its 2% target for 'an extended period', the Frankfurt-based central bank warned.
Thursday's three-quarter point hike takes the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility to 2.00%, 2.25% and 1.50%, respectively.
The ECB said it expects to lift rates further to ensure a 'timely' return to an inflation rate in line with its target.
The euro fell back below dollar parity, taking some shine off what has been a decent week so far for the single currency.
The euro stood at $0.9984 at the European equities close Thursday, down against $1.0064 at the same time on Wednesday.
Stocks in New York were mixed at the time of the London equities close, with the Dow Jones Industrial Average up 1.0%, the S&P 500 index down 0.2%, and the Nasdaq Composite down 1.0%.
The US economy grew at a faster pace than expected in the third quarter, according to the latest estimate from the US National Bureau of Economic Research on Thursday.
Gross domestic product grew by 2.6% annually in the third quarter of 2022, growth coming in higher than FXStreet-cited consensus of 2.4%. The figure shows the US economy is coping with high interest rates better than the market had expected, and strengthens the case for more US Federal Reserve rate hikes.
Against the yen, the dollar was trading at JP¥145.90 late Thursday, lower compared to JP¥146.50 late Wednesday.
In the FTSE 100, Shell added 5.2% to close as the best performer on Thursday.
The oil major swung to a net profit in the third quarter of the year, but reported that profit fell behind the second quarter as it warned of volatility in global energy markets.
Net profit totalled $6.74 billion in the third quarter, after oil prices surged, improving from a loss after tax of $447 million the previous year.
The profit was far lower when compared with its second-quarter net profit of $18.04 billion, however. Shell blamed the drop on a slump in refining margins.
In a positive read across, BP and Harbour Energy climbed 3.3% and 2.6%, respectively.
Airtel Africa sank to the bottom of the FTSE 100, plunging 15%. The Africa-focused telecommunications firm said its profit was held back by the devaluation of certain African currencies.
Pretax profit fell 9.1% to $516 million from $567 million, as the firm recognised $358 million in net finance costs, compared to $169 million a year before.
Net finance costs included foreign exchange and derivative losses of $184 million, compared to $24 million a year before.
Anglo American dropped 2.1% after it reported mixed quarterly production performance, with most commodities declining amid a challenging operating conditions.
For the third quarter that ended September 30, rough diamond production increased by 4% and steelmaking coal production rose by 28%.
Copper output, however, was down 6% and nickel production fell by 4%. Production in platinum group metals fell by 6%, hurt by electricity loadshedding in South Africa, infrastructure closures at Amandelbult and lower grade at Mogalakwena.
Mining peers Rio Tinto and Glencore fell 4.0% and 2.5%, respectively, in a negative read-across.
In the FTSE 250, Renishaw fell 3.5% despite saying it was confident of its long-term strategy after seeing revenue growth across all business sectors in its financial first quarter.
Reinshaw is a Gloucestershire, England-based provider of manufacturing technologies, analytical instruments and medical devices.
For the three months ended September 30, the company reported pretax profit of £38.6 million, down 2.0% from £39.3 million a year prior. Total revenue for the period was £179.9 million, up 14% from £157.8 million.
Renishaw noted, however, that general market sentiment was becoming more cautious, as evidenced by a weakening in order intake from the semiconductor and electronics sectors.
Brent oil was quoted at $94.75 a barrel at the London equities close Thursday, up from $93.93 late Wednesday.
Gold was quoted at $1,662.60 an ounce at the London equities close Thursday, lower against $1,665.70 at the close on Wednesday.
In Friday's UK corporate calendar, Glencore and International Consolidated Airlines publish third quarter results.
The economic calendar has GDP readings from Germany at 0900 BST, before the personal consumption expenditures inflationary gauge from the US at 1330 BST. Core PCE is the Fed's preferred inflationary measure.
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