Share prices were higher at midday in London on Monday, at the start of an big week for US company earnings.
The FTSE 100 index was up 20.52 points at 7,791.11. The FTSE 250 was up 57.51 points at 19,760.14, and the AIM All-Share was up 2.16 points at 858.18. All three indices were up 0.3%.
The Cboe UK 100 also was up 0.3%, at 779.25. The Cboe UK 250 was up 0.1% at 17,248.49, and the Cboe Small Companies was slightly higher at 13,988.81.
‘The FTSE 100 ticked higher on Monday without suggesting it would threaten the all-time high which it briefly flirted with before a sell-off at the end of last week,’ said AJ Bell investment director Russ Mould.
The dollar firmed off its morning lows by midday in London, with currency traders shaking off dovish signals from the Federal Reserve.
Sterling was quoted at $1.2360, pulling back than $1.2379 at the London equities close on Friday. Against the yen, the dollar was quoted at JP¥130.17, up from JP¥129.88
The euro traded at $1.0884, firm from $1.0837. However, it fell back from session highs above $1.09 - a nine-month high for the single currency.
In European equities on Monday, the CAC 40 index in Paris and the DAX 40 in Frankfurt both were up 0.1%.
Stock market investors are looking ahead to a gross domestic product reading from the US on Thursday, as well as a US inflation reading on Friday. The personal consumption expenditures price index is the US Fed’s preferred inflation gauge. The December index is due on Friday.
‘These will offer insight into two key and related factors which are grabbing the market’s attention right now.’ Mould said. ‘First, will the US avoid a deep recession and second, will inflation ease sufficiently to allow the Federal Reserve to ease up on interest rates before it has inflicted too much pain on businesses and consumers?’
According to FXStreet, market consensus expects US gross domestic product growth to have slowed to 2.8% in the fourth quarter of 2022 from 3.2% in the third quarter.
Stocks in New York were set to extend their Friday rally. The Dow Jones Industrial Average was called up 1.0%, the S&P 500 index up 1.7%, and the Nasdaq Composite 2.7% higher.
Among US companies due to release earnings this week are Microsoft on Tuesday, Tesla on Wednesday, and Intel on Thursday.
In London, Endeavour Mining was towards the top of the FTSE 100, adding 2.0%.
The gold miner, with assets in nations including Senegal and Burkina Faso, said annual gold production amounted to 1.40 million ounces, down 2.5% on-year from 1.44 million. The outcome was ‘slightly’ ahead of consensus and at the top end of Endeavour’s own 1.32 million to 1.40 million ounces target.
Endeavour declared a second-half dividend of $0.41 per share, up 46% from $0.28 a year earlier. Its total payout for 2022 has been lifted 45% to $0.81 per share from $0.56.
At the other end of the blue-chip index was St James’s Place, down 2.7%, as HSBC cut the stock to ’hold’ from ’buy’.
In the FTSE 250, National Express was up 2.2%.
The transport provider said it has won a contract worth over €1 billion to operate the RE1 and RE11 Rhein-Ruhr-Express lines in Germany to 2033. It first took over the operation of the two lines in February 2022 through an emergency contract award.
Following the new contract award, National Express now operates all three asset-light Rhein-Ruhr-Express lots under long-term contracts. The company noted that the contract is worth €1 billion over the lifetime of the agreement.
National Express said that the contract establishes it as ‘the second largest rail transport company in the region, delivering an anticipated 20 million train kilometres in 2023’.
Among London’s small-caps, UK pub and hotel chain Fuller, Smith & Turner shed 2.6%, blaming rail strikes for annual earnings that will come in below market expectations.
Fuller’s said that while sales in the four-week Christmas and New Year period were up 38% from a year before, they remained down 5% from the same period in 2019, before the Covid-19 pandemic. Train strikes throughout the holiday period reduced sales by £4 million, the company estimates.
In the 43 weeks to January 21, like-for-like sales were up 20% on a year before but down 3% from the same pre-pandemic period in financial 2020.
‘Normally picking up business from commuters seeking a drink after work or tourists enjoying its premium-end pub offering, disruption to trains going in and out of the capital meant it was up to locals to keep the tills ringing, and that wasn’t enough to keep earnings on track,’ AJ Bell’s Mould said.
‘With more train strikes on the cards, there is little that Fuller’s can do apart from hope there is an imminent resolution to the fight over transport worker pay.’
On AIM, Getech Group jumped 11%.
The geo-energy and green hydrogen company said 2022 revenue is expected ahead of market expectations at £5.0 million, compared to £4.3 million in 2021.
‘Getech starts 2023 with a strong balance sheet, sales pipeline growth, plus good customer and partner momentum,’ the firm said. It also confirmed its board has ‘no current plans’ for a capital raise from shareholders.
Brent oil fetched $88.28 a barrel on Monday at midday in London, up from $86.55 on Friday, while gold was quoted at $1,924.88 an ounce, down from $1,925.41.
‘After a difficult start to 2023, which saw prices drop over 10%, we have seen a significant recovery in energy commodities as improving economic outlooks and potential lower rate increases from central banks boosted optimism regarding the oil market,’ said XTB’s chief market analyst, Walid Koudmani.
Still to come on Monday’s economic calendar, there is flash EU consumer confidence at 1500 GMT.
By Elizabeth Winter, Alliance News senior markets reporter
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