Stock prices in London closed mostly higher on Thursday a day after inflation cooled to the Bank of England’s target, with European markets also rising.
The FTSE 100 index closed up 67.35 points, 0.8%, at 8,272.46. The FTSE 250 ended up 117.67 points, 0.6%, at 20,498.72, and the AIM All-Share closed down 5.12 points, 0.7%, at 772.38.
The Cboe UK 100 ended up 0.8% at 822.72, the Cboe UK 250 closed up 0.7% at 17,849.09, and the Cboe Small Companies ended up 0.5% at 16,811.34.
In European equities on Thursday, the CAC 40 in Paris ended up 1.3%, while the DAX 40 in Frankfurt ended up 1.0%.
The Bank of England left the door ajar open for an August interest rate cut after saying June’s decision to leave bank rate unchanged was ‘finely balanced’.
ING Developed Markets Economist James Smith said: ‘The Bank of England kept rates on hold this month, but comments in the statement and minutes suggest officials are getting closer to cutting interest rates despite some recent unwelcome services inflation figures.’
At its June meeting, the BoE’s Monetary Policy Committee voted 7-2 to keep bank rate at 5.25% for the seventh-successive meeting.
The decision comes after numbers on Wednesday showed that inflation returned to the BoE’s target for the first time since July 2021.
According to the Office for National Statistics, the rate of yearly consumer price growth faded to 2.0% in May, from 2.3% in April. The reading was in-line with the FXStreet cited consensus.
The rate of inflation stood as high as 11.1% in October 2022, but has faded, albeit bumpily, since then.
AJ Bell’s Laura Suter said: ‘Much of the public might have expected that once we hit the coveted 2% target for inflation the Bank would immediately start cutting rates.
‘Sadly, that’s not the case. Sticky core inflation and higher services inflation all helped to play into the Bank’s decision not to cut rates.’
The pound was quoted at $1.2675 at the London equities close Thursday, lower compared to $1.2723 at the close on Wednesday.
The euro stood at $1.0713 at the European equities close Thursday, down against $1.0745 at the same time on Wednesday. Against the yen, the dollar was trading at JP¥158.71, higher compared to JP¥157.92 late Wednesday.
In the FTSE 100, Ocado lost 13%, making it the worst performer of the day.
Ocado shares dropped, after the firm said it will, alongside Sobeys, focus their joint resources into driving order and sales volumes across the current network instead of proceeding with plans for a new ’fulfilment centre’.
The Hertfordshire, England-based grocery retailer and technology firm partnered with Sobeys, Canada’s second largest food retailer, in January 2018. Both companies agreed to launch an online grocery business in Canada using the end-to-end solutions within the Ocado Smart Platform.
In the FTSE 250, CMC Markets shot up 8.5%.
The London-based company is a provider of online trading and investment platforms spanning multiple asset classes, with a retail, professional and institutional offering.
In the year that ended March 31, pretax profit rose 21% to £63.3 million from £52.2 million the previous year. Total revenue increased 11% to £359.7 million from £325.1 million.
CMC increased its final dividend by 87% to 7.3 pence per share from 3.9p. This brings the total dividend to 8.3p, up 12% from 7.4p paid last year.
On the other hand, Tate & Lyle lost 9.1%, after it announced a deal to acquire nature-based ingredients company CP Kelco US Inc.
The London-based sweetener and food ingredients supplier said the $1.8 billion takeover of the Atlanta, Georgia-based company will create a ‘leading global speciality food and beverage solutions business’.
Amongst London’s small-caps, Speedy Hire closed up 6.7%, after the Merseyside, England-based tool and equipment hire company announced the signing of a new long-term contract.
The long-term contract with Amey Group Services will generate up to £25 million revenue per annum, Speedy Hire said, and is due to mobilise in the second of the current financial year, subject to a transition period.
Stocks in New York were higher at the London equities close, with the DJIA up 0.2%, the S&P 500 index up 0.1%, and the Nasdaq Composite up marginally higher.
Brent oil was quoted at $85.57 a barrel at the London equities close Thursday, down from $85.77 late Wednesday. Gold was quoted at $2,357.90 an ounce at the London equities close Thursday, higher against $2,325.80 at the close on Wednesday.
In Friday’s UK corporate calendar, there are full year results from JLEN Environmental Assets and Severfield.
The economic calendar for Friday has a slew of flash composite PMI data from the Eurozone, Germany and the UK. There is also UK retail sales data out at 0700 BST.
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