Stocks in Europe were mixed on Thursday midday ahead of an interest rate decision by the European Central Bank, while New York’s Nasdaq Composite is set to ease after storming above the 20,000 point mark.
The FTSE 100 index traded up 12.99 points, 0.2%, at 8,314.61. The FTSE 250 tread water. It was down just 0.53 points at 20,972.92. And the AIM All-Share was up 2.74 points, 0.4%, at 740.28.
The Cboe UK 100 was 0.1% higher at 834.60, the Cboe UK 250 was flat at 18,505.97, and the Cboe Small Companies fell 0.3% to 16,198.81.
The CAC 40 was down marginally in Paris. The DAX 40 in Frankfurt was slightly higher.
The ECB announces its latest interest rate decision at 1315 GMT.
‘Later today, the European Central Bank is expected to cut interest rates for a fourth time in the current cycle, in the face of a Eurozone economy which is teetering on the brink of a recession. The rumbling political crises in France and Germany only add to the tricky backdrop,’ AJ Bell analyst Dan Coatsworth commented.
French President Emmanuel Macron was expected Thursday to name a new prime minister a week after MPs toppled the government, with politicians across the spectrum holding their breath while he conducts a day visit to Poland.
Macron had promised to name a replacement government chief within 48 hours after meeting party leaders at his Elysee Palace office Tuesday, participants said.
Sterling rose to $1.2745 early Thursday afternoon, flat from $1.2746 at the time of the London equities close on Wednesday. The euro climbed to $1.0506 from $1.0490, while against the yen, the dollar faded to JP¥152.23 from JP¥152.49.
At 1330 GMT, there is a US producer price index reading and the latest jobless claims data.
Overnight, the Nasdaq Composite topped the 20,000 point mark for the first time.
AJ Bell’s Coatsworth added: ‘The catalyst for the tech-driven rally was a benign inflation reading. This fuelled expectations for an interest rate cut when the Federal Reserve meets next week. The Fed is in tricky position given the uncertainty over the incoming Trump administration‘s agenda and the scope for tariffs to revive inflationary pressures.
‘In hitting this latest milestone, the Nasdaq has nearly doubled in two years. To put that into context, the FTSE All-Share is up around 11% over the same timeframe.’
US stocks are called to open lower on Thursday. The Dow Jones Industrial Average and S&P 500 are called down 0.2%, and the Nasdaq down 0.3%.
An ounce of gold slipped to $2,711.23 early Thursday afternoon from $2,716.47 at the London equities close on Wednesday. A barrel of Brent rose to $73.55 from $73.05.
In London, shares in Currys jumped 13%. It reported an improved half-year performance, but hit out at ‘unwelcome headwinds from UK government policy’. Currys predicted that measures announced in the UK government budget are ‘likely to add around £32 million of annual cost to our business’.
‘We will seek to mitigate as much of this as possible through cost saving measures including process improvement, automation, offshoring, outsourcing and other overhead efficiencies. Some price rises are also inevitable. We will further update on this in due course,’ it added.
Currys said its trading performance ‘continues to strengthen, with profits and cashflow growing significantly’. Its pretax loss in the half-year to October 26 narrowed to £10 million from £44 million. Revenue improved 1.3% to £3.92 billion from £3.87 billion a year prior.
SThree plunged 23%. It warned tough market conditions are expected to continue in its new financial year. SThree, focused on the science, technology, engineering and mathematics fields, said net fees declined 12% in the year to November 30 to £369.1 million from £418.8 million. At constant currency, net fees fell 9%.
‘As has been widely reported across our industry, the past year has been characterised by protracted challenging market conditions which have impacted new business activity,’ CEO Timo Lehne said. ‘It is our specialism in STEM and Contract, combined with careful cost management, that has delivered a resilient performance, with FY24 expected to be in line with market consensus.’
It puts market consensus for pretax profit at £67.4 million, which would represent a 13% fall from the £77.9 million achieved in financial 2023. Looking to the new year, it is making the ‘prudent assumption’ that tough market conditions will persist, hurting net fees. It now expects pretax profit of £25 million for financial 2025, down more than 60% from what it expects for the year just gone.
SThree announced it plans to launch a new buyback of £20 million to be completed over the next six months.
Among London’s large-caps, Diageo added 3.3%, a UBS double upgrade adding some fizz to the brewer’s shares. It was raised to ’buy’ from ’sell’.
UBS sees upside risks to forecasts at Diageo’s US business and thinks the earnings downgrade cycle is near the end.
‘Following 31% [earnings per share] downgrades over the past two years, we think investors can gain comfort [that] the business is towards the end of its earnings downgrade cycle,’ UBS said in a research note.
Elsewhere, TT Electronics slumped 13%, but Volex shot up 7.9%.
Volex said it won’t make a takeover offer for TT Electronics, saying the board of the latter wants too high of a price.
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