Stock prices in London closed lower on Tuesday, with New York tracking down, although the cooling US job market fed hopes of interest rate cuts.
The FTSE 100 index closed down 30.71 points, 0.4%, at 8,232.04. The FTSE 250 ended down 182.50 points, 0.9%, at 20,717.99, and the AIM All-Share closed down 6.96 points, 0.8%, at 798.20.
The Cboe UK 100 ended down 0.5% at 820.70, the Cboe UK 250 closed down 1.0% at 18,202.58, and the Cboe Small Companies ended down 0.8% at 16,970.20.
In European equities on Tuesday, the CAC 40 in Paris ended down 0.7%, while the DAX 40 in Frankfurt ended down 1.0%.
There was some more disappointing economic data from the US on Tuesday, leading to a risk off sentiment.
Stocks in New York were lower at the London equities close, with the DJIA down 0.1%, the S&P 500 index down 0.3%, and the Nasdaq Composite down 0.4%.
The number of job openings in the US dropped more than expected in April, figures on Tuesday showed, suggesting the labour market may be starting to cool.
According to the US Bureau of Labor Statistics the number of job openings was 8.1 million on the last business day of April, below the FXStreet consensus of 8.3 million.
The total for March was revised down by 133,000 to 8.4 million.
Meanwhile, reports on Monday painted a conflicting picture as to the health of the US manufacturing sector.
The S&P Global US manufacturing PMI rose to 51.3 in May, after having posted in line with the 50.0 no-change mark in April. The total was above the flash figure of 50.9.
Of more concern, the Institute for Supply Management’s manufacturing PMI registered 48.7 in May, down from 49.2 in April.
Yet, Daniel Takieddine at BDSwiss said that Tuesday’s job openings data has meant that traders have priced in a ‘more probable chance’ of a Federal Reserve rate cut in September.
‘Furthermore, Friday’s payroll numbers are highly anticipated, as they will provide key insights into the outlook for the world’s largest economy and the trajectory of interest rates. If the job market presents signals of cooling down, expectations of interest rate cuts could strengthen, supporting the stock market in the process,’ Takieddine added.
The US nonfarm payrolls data is out at 1330 BST on Friday.
The pound was quoted at $1.2786 at the London equities close Tuesday, compared to $1.2788 at the close on Monday. The euro stood at $1.0881 at the European equities close Tuesday, against $1.0883 at the same time on Monday. Against the yen, the dollar was trading at JP¥154.89, lower compared to JP¥156.16 late Monday.
In the FTSE 100, BP and Shell sunk to the bottom of the index, closing down 3.8% and 2.1%, respectively.
Brent oil was quoted at $77.01 a barrel at the London equities close Tuesday, down from $78.22 late Monday.
‘OPEC’s surprise decision to start rolling back some of its production cuts before the end of the year hit the market,’ AJ Bell’s Russ Mould explained.
In the FTSE 250, Carnival shot up to the top of the index. The cruise ship operator closed up 7.3%.
Broker Peel Hunt raised the company’s broker rating to ’buy’.
Octopus Renewables rose 1.5%.
The London-based investment company, focused on renewable energy assets across Europe and Australia, said it will initiate a share buyback programme with an initial tranche worth up to £10 million.
Elsewhere, on London’s AIM, Vast Resources shares shot up 36%.
The miner reported that 25,388 tonnes of ore was mined in the first quarter at Baita Plai mine, up 22% from 20,728 tonnes a year prior and 5.0% higher than 24,178 tonnes in the final quarter of 2023. The mine’s copper concentrate grade was 20%, versus 23% a year previously but higher than 18% in the fourth quarter of 2023.
Baita Plai is located in the Apuseni Mountains, Transylvania.
Gold was quoted at $2,322.80 an ounce at the London equities close Tuesday, lower against $2,341.60 at the close on Monday.
In Wednesday’s UK corporate calendar, there are full year results from B&M European Value Retail, as well as Ninety One. There is also a trading statement from WH Smith.
The economic calendar for Wednesday has composite PMI readings from France, Germany, the eurozone and the US.
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