London shares prices were trading firm at midday on Monday and the FTSE 100 was inching back up toward its recent record high, as investors cautiously awaited fresh UK economic data in the week ahead.
‘Back above the 7,900 mark and within striking distance of its recent all-time highs the index continues to build on its gains of recent months, but the confidence that remains is about as fragile as a fine china cup,’ said Russ Mould, investment director at AJ Bell.
The FTSE 100 index was up 25.75 points, or 0.3%, at 7,908.39. The UK equity benchmark hit a record intraday high of 7,934.30 on Thursday last week.
The FTSE 250 was up 16.11 points, or 0.1%, at 20,046.18. Meanwhile, the AIM All-Share was down 2.79 points, or 0.3%, at 871.60.
The Cboe UK 100 was up 0.4% at 791.56, the Cboe UK 250 was marginally higher at 17,472.41, and the Cboe Small Companies was up 0.4% at 13,873.17.
There is a slew of fresh UK data due for release in the days ahead which may push back against London’s positive start to the week.
UK wage and unemployment data will be released before the London market open on Tuesday. The consumer price index for January is published on Wednesday and retail sales figures on Friday.
Wage and price inflation readings will be particularly influential on the thinking of the Bank of England, as interest rate hikes remain on the agenda for central banks globally.
Analysts at Lloyds Bank said it expects the labour market data to ‘do little to relieve Bank of England policymakers’ concerns about domestic inflationary pressures’.
‘Unfilled job vacancies are falling but for now remain uncomfortably high. Moreover, we expect the latest release to show a further fall in the unemployment rate and another rise in employment. Also, while total pay growth may have slowed modestly, we project regular (ex-bonus) pay to have picked up further to 6.6%,’ they said.
The pound was quoted at $1.2063 at midday on Monday in London, lower compared to $1.2072 at the close on Friday.
The top three blue-chip performers in London at midday on Monday were Weir, Spirax-Sacro and Pershing Square. The stocks were up 2.6%, 2.5%, and 2.2%, respectively.
Housebuilders remained among the worst performing stocks in the FTSE 100 at midday.
Persimmon was down 3.3%, Taylor Wimpey down 3.0%, and Barratt Developments down 2.3%. Berkeley was down 1.1%.
In the FTSE 250, Crest Nicholson lost 5.6% after Deutsche Bank cut the housebuilder to ’hold’ from ’buy’ with a price target of 243 pence.
Elsewhere in London, Kape Technologies jumped 12% after it received a takeover offer from Unikmind Holdings, a company wholly-owned by Teddy Sapi, who holds around 55% of Kape.
The offer for $3.44 per Kape share, or 285 pence per share, values the entire company at around $1.51 billion or £1.25 billion. The offer price represents a 9.7% premium to Kape’s closing price of 260 pence on Friday.
Non-Standard Finance plunged 15% as it reiterated warnings of company-wide insolvency as it continues talks with the UK Financial Conduct Authority.
The Wakefield, West Yorkshire-based consumer lending firm said talks with advisors and the UK Financial Conduct Authority are progressing regarding a potential scheme of arrangement.
If the scheme is sanctioned, the company intends to proceed with a capital raise for the payment of customer redress, as well as to recapitalise the remaining group and enable its Everyday Loans business to move forward with its growth plan.
The capital raise will ‘materially dilute’ the interests of existing shareholders. However, if the proposed capital raise is unsuccessful, Non-Standard Finance says its balance sheet will remain ‘deeply insolvent’.
Asset manager MJ Hudson said Ernest & Young has quit as its auditor with immediate effect, less than 18 months after being appointed.
The letter of resignation from EY said: ‘We are ceasing to hold office because we have lost trust and confidence in the company’s management and those charged with governance, and in their ability, along with your finance team, to provide us with accurate and reliable information for audit.’
Consequently, MJ Hudson said it believes the finalising of its financial 2022 reports will ‘take some time’ as it commences a search for a new auditor.
The resignation was first reported by Sky News. Shares in MJ Hudson are suspended from trading.
In European equities on Monday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.3%.
The EU raised its economic growth forecast for the eurozone, predicting the single-currency block will manage to ‘narrowly’ avoid a recession.
In its winter economic forecast for 2023, the EU lifted its growth forecast for the eurozone to 0.9%, compared to a previous estimate of 0.3%. This is on the basis of no escalation of Russian aggression in Ukraine.
The EU noted ‘favourable developments’ since its Autumn forecast, including easing wholesale gas prices and higher-than-average gas storage levels in time for winter.
The euro stood at $1.0678, unchanged from $1.0677 at the close on Friday. Against the yen, the dollar was trading at JP¥132.63, higher compared to JP¥131.44.
On Friday, reports in Japanese media, including the Nikkei business daily and public broadcaster NHK, said the government plans to nominate economics professor Kazuo Ueda as Bank of Japan governor.
It initially led to a jump in the yen on expectations that that it may signal a move to a tighter monetary policy. The yen has subsequently settled down after Ueda said he did not plan an immediate change in policy, according to Lloyds Bank.
Stocks in New York were called to open broadly higher. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.4%. The Dow and S&P closed up 0.5% and 0.2%, respectively, on Friday, while the Nasdaq closed down 0.6%.
Brent oil was quoted at $86.08 a barrel at midday in London on Monday, down from $86.41 late Friday. Gold was quoted at US1,862.26 an ounce, higher against $1,858.39.
Copyright 2023 Alliance News Ltd. All Rights Reserved.
