Stock prices in London were little moved on Tuesday midday despite inflation in the eurozone getting closer to its 2% target.
The FTSE 100 index was up 0.94 of a point at 7,615.42. The FTSE 250 was up 101.02 points, 0.5%, at 19,321.57, and the AIM All-Share was up 2.41 points, 0.3%, at 743.60.
The Cboe UK 100 was flat at 760.22, the Cboe UK 250 was up 0.8% at 16,818.19, and the Cboe Small Companies was down 0.1% at 14,363.93.
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.
Against the yen, the dollar was trading at JP¥144.71, up compared to JP¥143.05.
‘The Bank of Japan did not give in to market pressure and kept its dovish guidance intact. However, the wording on the economic and inflation outlook paves the way for a hike in the second quarter in our view,’ said ING’s Francesco Pesole.
Speculation had been swirling for weeks that officials would shift away from negative interest rates and tight grip on bond yields as inflation picks up.
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.
This follows inflation data from the eurozone, released Tuesday.
Eurostat reported that eurozone’s harmonised index of consumer prices rose by 2.4% annually in November, slowing from a 2.9% increase in October. Month-on-month, prices fell by 0.6%, they had risen by 0.1% in October.
Meanwhile, AJ Bell’s Russ Mould said: ‘Events in the Red Sea, where companies like Maersk and BP are diverting vessels thanks to a series of attacks, are a reminder of the impact of the ongoing conflict in the Middle East and may well act as a renewed inflationary pressure – as a disrupted supply chain leads to a higher cost of goods.’
Iran-backed Huthi rebels have escalated attacks on tankers, cargo ships and other vessels in the Red Sea, imperiling 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.
Meanwhile, oil prices slipped slightly, having advanced on Monday amid disruption in the Middle East. Brent oil was trading at $77.82 a barrel at midday Tuesday, down from $78.52 late Monday. London’s oil majors BP and Shell shed 0.9% and 0.7% respectively at midday.
In the FTSE 250 index, Hipgnosis Songs Fund lost 2.1%.
Hipgnosis, which was due to release its half-year results on Tuesday, announced they will be delayed until the end of the year, amid a discrepancies between an independent valuation of its intellectual property assets and its manager’s own view.
The embattled investor in music rights said an independent valuer found its assets have a value ‘materially higher than the valuation implied by proposed and recent transactions in the sector’, particularly the proposed sale of assets to Hipgnosis Songs Capital, a joint venture between between investment adviser Hipgnosis Song Management and private equity firm Blackstone.
Amongst London’s small-caps. Superdry plummeted 16%.
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 7.8%, 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, Engage XR fell 27%, 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.’
In European equities on Tuesday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was up 0.4%.
Stocks in New York were called slightly higher. The Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite were all called up marginally.
The pound was quoted at $1.2706 at midday on Tuesday in London, higher compared to $1.2640 at the equities close on Monday. The euro stood at $1.0939, up against $1.0914.
Gold was quoted at $2,025.60 an ounce at midday Tuesday, higher against $2,022.88 late Monday.
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