Stocks were in the red on Thursday at midday, as investors failed to get into the festive spirit ahead of a US economic data read later in the day.
It is London’s last full day of trading before markets shut early for a Christmas break on Friday.
The FTSE 100 index was down 37.23 points, 0.5%, at 7,678.45. The FTSE 250 was down 148.60 points, 0.8%, at 19,480.49, and the AIM All-Share was down 2.78 points, 0.4%, at 748.66.
The Cboe UK 100 was down 0.6% at 766.65, the Cboe UK 250 was down 0.8% at 16,966.35, and the Cboe Small Companies was down 0.4% at 14,567.99.
In European equities on Thursday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both down 0.6%.
At 1330 GMT, there is a US gross domestic product reading, as well as the unemployment insurance weekly claims report.
Investors will then have the key US personal consumption expenditures price index print on Friday, which is the Federal Reserve’s preferred metric of inflation.
AJ Bell’s Russ Mould said ‘a higher-than-expected core US inflation reading tomorrow could tip us back into fretting about rates being higher for longer, while any downgrade to America‘s final GDP estimate for the third quarter might elevate concerns about the health of the economy.’
More positively, Swissquote Bank’s Ipek Ozkardeskaya commented: ‘Investors could still enjoy a soft US inflation read for November, and the latter could keep the bond rally intact into Xmas. If that’s the case, the US dollar will remain under pressure.’
Last week, the Federal Open Market Committee extended a pause in monetary policy that has been in place since July, leaving the federal funds rate at a 22-year high of 5.25% to 5.5%. At the time, Federal Reserve Chair Jerome Powell said that while interest rates ‘are at or near the peak of the cycle’, the committee ‘has been surprised before and will do more if needed to bring inflation down’.
The notion that the US Federal Reserve might be ready to start cutting interest rates next year has given a boost to stocks.
The pound was quoted at $1.2657 at midday on Thursday in London, lower compared to $1.2734 at the equities close on Wednesday. The euro stood at $1.0963, down against $1.0972. Against the yen, the dollar was trading at JP¥142.98, down compared to JP¥143.88.
Stocks in New York were called higher, ahead of the data. The Dow Jones Industrial Average and the S&P 500 index are both called to open up 0.4%, whilst the Nasdaq Composite is called to open 0.6% higher.
In the FTSE 100, Vodafone was the best performer at midday, up 2.2%.
Bloomberg reported that Swisscom is weighing an offer for the UK telecom’s Italian business early next year, potentially countering a rival proposal from France’s Iliad.
Citing people familiar with the matter, Bloomberg reported that the possible deal would combine Vodafone’s mobile service with Swisscom’s Fastweb fiber broadband carrier in the country.
Swisscom and Vodafone are in talks to discuss the terms and a formal bid could be announced as soon as next month, the Bloomberg sources said.
Iliad on Monday said it submitted a proposal to Vodafone to create a new joint venture company that combines Vodafone Italia and Iliad Italia.
Admiral lost 1.1%.
Berenberg cut the insurer’s stock to ’hold’ from ’buy’.
In the FTSE 250, troubled Hipgnosis lost 1.2%, after it released its delayed interim results.
This comes just two days after the music intellectual property investor flagged discrepancies between an independent valuation of its intellectual property assets and its manager’s own view. On Tuesday, Hipgnosis delayed he release of the results.
On an IFRS basis, net asset value per share at the end of September fell 7.2% to 110.12 US cents from 118.63 cents at the end of March, or 9.2% to 173.92 cents from 191.53 cents on an operative basis.
However, it warned that investors should use these figures ‘with a higher degree of caution and less certainty’, given ongoing concerns about the accuracy of the valuation of its assets.
The warning is another hit for the embattled firm. The discounted sale of assets to a partnership that includes investment adviser Hipgnosis Song Management, followed in October by a profit warning and decision to skip paying a dividend, triggered a shareholder revolt.
Amongst London’s small-caps, Capital rose 7.7%.
The mining services company announced the largest contract award in the history of a majority-owned subsidiary.
MSALabs, a geochemical laboratory services provider, has won a contract worth $140 million over five years, with annual revenue of $30 million once fully operational.
On London’s AIM, tinyBuild rocketed 70%.
The Washington, US-based video game developer and publisher said French video game firm Atari will buy $2 million of its shares via a private placing at 5p each. This comes amid plans to raise around $14 million via the issue of shares at the same price.
However, it provided a rather gloomy update on trading, noting some contracts may slip into next year. It expects revenue to be between $40 and $50 million in 2023, which would be down from $63.3 million in 2022.
In response, tinyBuild firm has ‘promptly accelerated’ its cost reduction plans. It will use fund from the equity raise to strengthen its balance sheet.
Brent oil was quoted at $79.47 a barrel at midday in London on Thursday, down from $80.44 late Wednesday. Gold was quoted at $2,034.62 an ounce, slightly higher against $2,034.50.
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