Positive monthly consumer price inflation data for the eurozone on Tuesday helped London stocks into the green, with one eye ahead of Wednesday’s CPI read in the UK.
The FTSE 100 index closed up 23.55 points, 0.3%, at 7,638.03. The FTSE 250 ended up 95.43 points, 0.5%, at 19,315.98, and the AIM All-Share closed up 4.20 points, or 0.6%, at 745.39.
The Cboe UK 100 ended up 0.3% at 762.82, the Cboe UK 250 closed up 0.8% at 16,814.02, and the Cboe Small Companies ended up 0.3% at 14,416.26.
In European equities on Tuesday, the CAC 40 in Paris ended up 0.1%, while the DAX 40 in Frankfurt ended up 0.6%.
The eurozone harmonised index of consumer prices rose by 2.4% annually in November, slowing from a 2.9% increase in October. The figure was in line with Eurostat’s prior flash reading.
Month-on-month, prices fell by 0.6%, after they had risen by 0.1% in October. November’s reading was revised from an earlier flash estimate of a 0.5% fall.
Analysts at Oxford Economics said: ‘The decline in inflation was broad-based, with every major component contributing to the overall slowdown, beyond base effects in energy and easing food prices. Though services inflation declined markedly in November due to specific factors in the transport sector, services prices should remain stickier overall and may rebound slightly in December.’
On Wednesday, there are UK consumer and producer price inflation readings at 0700 GMT. This could set the tone for interest rates in the UK next year.
At the same time, there is German PPI data.
Interest rates have also been a topic of discussion on Tuesday.
Overnight on Tuesday, the Bank of Japan chose to stick with its long-standing, ultra-loose monetary policy, despite hawkish speculation in the weeks running up to the decision.
The BoJ also offered no guidance on its plans in the new year, sending the yen down against the dollar. The bank said it plans to ‘patiently continue’ with relaxed policy.
‘The Bank of Japan kept its major policy settings unchanged and made no changes to its forward guidance, pushing the yen down against the dollar. But we think the shift in tone is clear and major policy changes will be made early next year,’ analysts at ING said.
Against the yen, the dollar was trading at JP¥143.88 at the London equities close Tuesday, higher compared to JP¥143.05 late Monday.
The pound was quoted at $1.2734 at the London equities close Tuesday, compared to $1.2640 at the close on Monday. The euro stood at $1.0972 at the European equities close Tuesday, up against $1.0914 at the same time on Monday.
Stocks in New York were higher at the London equities close, with the DJIA up 0.6%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.5%.
In the FTSE 100, BP lost 0.3% and Shell rose 0.4%.
Oil prices rose marginally, amid disruption in the Middle East. Brent oil was quoted at $78.81 a barrel at the London equities close Tuesday, higher from $78.52 late Monday.
Iran-backed Houthi rebels have escalated attacks on tankers, cargo ships and other vessels in the Red Sea, imperilling a transit route that carries up to 12% of global trade. This prompted companies, including BP, to suspend transits through the area.
According to the Financial Times on Tuesday, Danish firm Maersk, which operates the second-largest fleet of shipping containers in the world, said it would re-route vessels bound for the Red Sea around Africa via the Cape of Good Hope.
In the FTSE 250, Diversified Energy plummeted 14%.
Diversified, the largest owner of US oil and gas wells in the country, received a letter on Monday from four members of the United States House of Representatives Committee on Energy and Commerce.
The letter requested information concerning the company’s well retirement and emissions practices, and expressed concerns over the company’s purchase of ‘a substantial share of the country’s ageing oil and gas wells.’
In response, Diversified has said: ‘the company is reviewing the letter and intends to engage in a positive and open manner, as it has continuously done, by providing information regarding the company’s peer-leading environmental and operational actions that underpin its responsible asset stewardship approach.’
Amongst London’s small-caps. Superdry plummeted 14%.
It warned its profit for its current financial year ending at the end of April will suffer amid the ‘well-documented challenging trading environment’.
The Cheltenham, Gloucestershire-headquartered clothing retailer pointed to an ‘abnormally mild autumn’ which resulted in a delayed uptake of its Autumn/Winter 23 collection.
Founder & Chief Executive Officer Julian Dunkerton said: ‘Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance. The operational progress we have made in the first half has been more encouraging with the intellectual property sale for the South Asian region and strong progress on our cost efficiency programme.’
De La Rue fell 4.0%, after it reported a widened loss amid revenue decline.
The security printed products maker said pretax loss widened to £16.8 million in the six months that ended September 30 from £15.9 million a year before. Revenue slipped 1.7% year-on-year to £161.5 million from £164.3 million.
On AIM, Tertiary Minerals rose 23%.
The Macclesfield, England-based mineral exploration and development company said it has signed an earn-in agreement with KoBold Metals and Mwashia Resources, regarding its copper project in Zambia.
On the end, Engage XR fell 19%, after it reported a ‘challenging’ year.
The Waterford, Ireland-based virtual reality software and technology group said it now expects between €3.6 million and €3.8 million in revenue for 2023, down from €3.9 million in 2022.
Chief Executive Officer David Whelan said: ‘2023 has indeed being challenging but extremely informative and now it is time to capitalise on the opportunity before us to generate meaningful revenues and expand our customer base.’
Gold was quoted at $2,039.44 an ounce at the London equities close Tuesday, up against $2,022.88 at the close on Monday.
In Wednesday’s UK corporate calendar there are full-year results from abrdn Diversified Income & Growth, as well as Jersey Electricity. There are also trading statements from Petrofac and Time Finance.
The economic calendar for Wednesday has the People’s Bank of China loan prime rate announcement overnight. Later on Wednesday, Bank of Canada’s meeting minutes will be released.
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