Stocks in London were called slightly higher on Thursday at midday, as investors eye the European Central Bank’s upcoming rate decision and following surprisingly positive data for the UK construction industry.
The FTSE 100 index was up 25.37 points, 0.3%, at 8,272.32. The FTSE 250 was up 66.00 points, 0.3%, at 20,739.41, and the AIM All-Share was down 2.54 points, 0.3%, at 796.43.
The Cboe UK 100 was up 0.2% at 824.40, the Cboe UK 250 was up 0.1% at 18,167.18, and the Cboe Small Companies was flat at 16,923.80.
In European equities on Thursday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.7%.
‘The ECB is expected to follow the likes of Canada, Sweden and Switzerland by cutting rates later today, bringing the long-awaited pivot in monetary policy and signalling the start of a new era,’ said AJ Bell’s Russ Mould.
‘After a long period of rock-bottom rates, the subsequent period shocked markets to the core as interest rates soared amid high levels of inflation.
‘We’re now beginning the next phase in the cycle where inflationary pressures ease and central banks move to a new playbook to help prop up a flagging economy and make life easier for consumers and businesses who have had to stomach sky-high borrowing costs.’
The ECB is expected to cut rates by 25 basis points, a quarter of a percentage point. The Frankfurt-based official lender is due to announce its latest interest rate decision on Thursday at 1315 BST.
ECB President Christine Lagarde is scheduled to take questions afterwards, and focus will be on the implications of what she says for market expectations about the pace and size of future rate cuts.
The Bank of Canada led the charge on Wednesday by cutting its own interest rates, in a move which was widely expected by markets.
Back in the UK, there was some good news for the UK construction sector, with construction activity rising at its fastest pace in two years in May.
The headline S&P Global UK construction purchasing managers’ index rose to 54.7 points in May from 53.0 in April, outperforming FXStreet-cited market expectations of a fall back to 52.5 points.
May’s PMI score represented the fastest pace of expansion in the UK construction sector in two years. Climbing further above the 50-point mark separating growth from contraction, it indicates the pace of growth accelerated.
Housebuilders were little effected by the news. Taylor Wimpey, Persimmon and Barratt Developments were all up 0.5% at midday Thursday.
The pound was quoted at $1.2785 at midday on Thursday in London, higher compared to $1.2764 at the equities close on Wednesday. The euro stood at $1.0878, up against $1.0866. Against the yen, the dollar was trading at JP¥156.04, lower compared to JP¥156.19.
In the FTSE 250, John Wood jumped 9.9%.
John Wood on Wednesday said it has decided to engage with Dar Al-Handasah Consultants Shair & Partners Holdings Ltd after evaluating a fourth bid proposal received last Wednesday.
The Aberdeen, Scotland-based consulting and engineering firm noted that this ‘fourth and final’ offer from the Beirut-founded company, which is known as Sidara, is worth 230 pence per share. It values Wood Group at around £1.58 billion.
Sidara has steadily increased its bid proposal from an initial 205p per share.
The deadline by which Sidara has to decide whether to make a formal bid has been extended to July 3.
Mitie edged up 1.0%.
In the financial year that ended March 31, pretax profit leapt 48% to £156.3 million from £105.5 million a year prior. Revenue rose 11% to a record £4.51 billion from £4.06 billion.
Chief Executive Phil Bentley said: ‘Our divisions are all performing well, with Technical Services, Central Government & Defence and Communities delivering double digit revenue growth, and Business Services more than replacing all of the revenue from certain short-term public sector contracts.’
On London’s AIM, Clontarf Energy plummeted 58%.
The oil, gas and minerals explorer said it has encountered a setback, as its submission for the Bolivia Lithium project was not accepted.
Clontarf maintained that it will continue to argue the case, and is optimistic that this subject may be revisited at a later date.
Stocks in New York were called virtually flat. The Dow Jones Industrial Average was called down 0.1% and the S&P 500 index down marginally, and whilst the Nasdaq Composite was called up 0.1%.
Brent oil was quoted at $78.66 a barrel at midday in London on Thursday, up from $77.25 late Wednesday. Gold was quoted at $2,361.40 an ounce, higher against $2,351.20.
As well as the ECB interest rate decision, still to come on Thursday’s economic calendar is the weekly US jobless claims data at 1330 BST.
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