Stock prices in Europe were mixed on Thursday morning ahead of interest rate decisions by the Bank of England and the Federal Reserve, as investors digest Donald Trump’s incoming second presidential term.
‘The BoE is expected to cut rates by 25bp today,’ noted Swissquote’s Ipek Ozkardeskaya. ‘The markets price in two more rate cuts by the end of next year and gives a 35% chance for a third one... [but] now, the bank analysts are lowering their post-Trump growth expectations for the UK – which is, in return, doveish for the BoE bets.’
As for the US Federal Reserve, which also makes its rate call today, she commented: ‘For the US, it’s clear: pro-growth policies, tax cuts, tariffs point at higher inflation in the US. The Federal Reserve is expected to announce a 25bp cut today, but the policy beyond today’s decision must be readjusted accordingly. The expectation, so far, was that the Fed would...deliver another 25bp cut in December, and a full point cut next year. Now, the December cut is on a slippery ground and the Fed should not consider more than two to three rate cuts next year.’
The FTSE 100 index opened up 7.76 points, 0.1%, at 8,174.44. The FTSE 250 was up 58.68 points, 0.3%, at 20,505.38, and the AIM All-Share was down 5.97 points, 0.8%, at 733.07.
Auto Trader was the FTSE 100’s biggest loser, dropping 5.1%.
This was despite the company reporting a 15% rise in pretax profit to £187.5 million for its first half, while revenue rose 8% to £302.5 million and basic earnings per share jumped 22% to 15.56 pence.
Trainline was among the FTSE 250 winners, gaining 4.1%.
Its first-half pretax profit rose to £46.5 million from £18.1 million the year before, while revenue jumped to £229.1 million and net ticket sales reached £3.00 billion.
The firm also bought back 62,750 shares for an average price of 398.32p yesterday.
It was second only to RS Group which gained 5.8%.
RS declared an increased interim dividend of 8.5p, although first-half profit fell on-year to £105.8 million and revenue edged lower to £1.44 billion from £1.45 billion.
RS said markets were more challenging than anticipated, a trend it expects to continue through the second half. It expects full-year results in line with market expectations.
The Cboe UK 100 was up 0.3% at 820.99, the Cboe UK 250 was up 0.1% at 1,8031.77, and the Cboe Small Companies was marginally higher at 16,407.40.
Among smaller companies, JZ Capital Partners opened 6.9% higher.
Its net asset value has growth to $4.15 at August 31 from $4.08 at February 29, and JZ claims to be in a strong financial position.
JZ further announced plans to return up to $40 million through redemption of up to 9.8 million shares.
In European equities on Thursday, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was up 0.8%.
The pound was quoted at $1.2935 early on Thursday in London, up compared to $1.2877 at the equities close on Wednesday. The euro stood at $1.0768, higher against $1.0728. Against the yen, the dollar was trading lower at JP¥153.85 compared to JP¥154.48.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 0.3%. In China, the Shanghai Composite was up 2.5%, while the Hang Seng index in Hong Kong was up 1.9%. The S&P/ASX 200 in Sydney closed up 0.3%.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 3.6%, the S&P 500 up 2.5% and the Nasdaq Composite up 3.0%.
Brent oil was quoted lower at $74.85 a barrel early in London on Thursday from $75.18 on Wednesday.
Gold was quoted lower at $2,662.97 an ounce, against $2,665.82.
Meanwhile, construction purchasing managers’ indices for the eurozone, France and Germany just came out. In the eurozone, the decline in activity eased in October while the drop in new orders deteriorated.
‘Demand conditions at eurozone construction firms remained muted in October, as the pace of contraction quickened for the first time since July,’ S&P Global said.
Still to come on Thursday’s economic calendar, there will be CPI data from Ireland and weekly US jobless figures.
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