Stocks in London closed predominantly lower on Thursday, in parallel with peers across Europe, as nervous sentiment prevailed ahead of US jobs data on Friday.
The FTSE 100 index closed down 1.66 points at 7,513.72. The FTSE 250 ended down 47.99 points, 0.3%, at 18,618.74, and the AIM All-Share closed up 2.74 points, or 0.4%, at 720.86.
The Cboe UK 100 ended down 0.2% at 750.42, the Cboe UK 250 closed down 0.2% at 16,157.85, and the Cboe Small Companies ended up 0.7% at 13,920.30.
In European equities on Thursday, the CAC 40 in Paris closed up 0.1% and the DAX 40 in Frankfurt ended down 0.2%.
All eyes on Thursday have been on the next set of interest rate decisions from central banks, and it seems like this will be the same on Friday.
Investors are nervously waiting for the US non-farm payroll report, which could help set the direction for the Federal Reserve interest rate outlook. Friday’s data is expected to show that nonfarm payrolls rose to 180,000 last month, from 150,000 in October.
‘US jobs numbers tomorrow and central bank meetings next week could inform the market if it has got carried away with the level of rate cuts which are now being priced in for 2024,’ said AJ Bell’s Russ Mould.
The Fed will make its interest rate decision on Wednesday next week, followed by the ECB a day later.
On Thursday, investors digested the US Department of Labor’s weekly figures. They showed that new US initial unemployment benefits claims picked up slightly last week, though were lower than expected.
According to the US Department of Labor, initial jobless claims totalled 220,000 in the week ended December 2, rising slightly from 219,000 a week prior. The previous week’s reading was upwardly revised from 218,000. The latest reading came in below the FXStreet cited consensus of 222,000.
Meanwhile, the yen surged against the dollar on Thursday after comments from the head of the Bank of Japan stoked speculation it will tighten its ultra-loose monetary policy.
Against the yen, the dollar was trading at JP¥144.07, down compared to JP¥147.17 late Wednesday.
Governor Kazuo Ueda said handling monetary policy ‘will become even more challenging from the year-end and heading into next year’, Bloomberg News reported.
‘These comments come a day after Deputy Governor Hamani downplayed the potential negative impact of hiking rates. As a result, Bank of Japan liftoff expectations have shifted back to April vs. June at the start of this week,’ commented analysts at Brown Brothers Harriman.
The BoJ’s next policy board makes its next decision on December 19.
The pound was quoted at $1.2580 at the London equities close Thursday, down compared to $1.2601 at the close on Wednesday. The euro stood at $1.0791 at the European equities close Thursday, lower against $1.0796 at the same time on Wednesday.
Stocks in New York were mixed at the London equities close. The DJIA was down 0.1%, however the S&P 500 index was up 0.6%, and the Nasdaq Composite up 1.0%.
In the FTSE 100, DS Smith rose 1.5%.
The London-based maker of paper-based packaging reported that pretax profit fell 17% to £268 million, from £321 million a year ago. The firm said revenue declined 18% to £3.51 billion in the first half ended October 31, from £4.30 billion the year prior.
DS Smith declared an interim dividend of 6.0 pence per share, unchanged from previously, ‘ in light of the strong business performance, building on the robust position of the second half of the previous year,’ it said.
Looking ahead, the company said it expects its full year results to be in line with expectations.
Vodafone slipped 3.3% as Exane BNP lowered its rating for the telecommunications firm to ’underperform’. Peer BT fell 1.7%.
Meanwhile, British Airways parent IAG lost 2.4%. JPMorgan cut the stock to ’underweight’ from ’neutral’.
In the FTSE 250 index, AJ Bell surged 16% after it reported ‘record’ annual results.
For the financial year ended September 30, the investment platform generated record revenue of £218.2 million, up 33% from £163.8 million. Pretax profit shot up 50% to £87.7 million from £58.4 million.
AJ Bell proposed a final dividend of 7.25 pence per share, up 58% from 4.59p. Its total annual dividend amounted to 10.75p, up 46% from 7.37p.
‘I am pleased to report another year of strong financial performance for the business which has demonstrated our ability to continue to grow in different market conditions,’ Chief Executive Michael Summersgill said.
Coats gained 12%, after it reached an agreement with the trustee of the Coats UK Pension Scheme to switch off pension deficit repair payments from the start of the new year.
The Bristol, England-based industrial thread and footwear component manufacturer said it agreed to pay the scheme a one-off lump sum payment of £10 million to move into an expected surplus position against the technical provisions funding basis. This will enable the switch off threshold to be ‘comfortably met’, it said.
On the other hand, Future lost 16%.
The Bath, England-based magazine publisher said pretax profit fell 19% to £138.1 million in the year that ended on September 30, from £170.0 million the previous year. Revenue decreased 4.4% to £788.9 million from £825.4 million.
‘Looking back at the prior year, we have delivered a resilient performance amid a challenging market, with a resilient full-year profit performance and strong cash generation, reflecting the diversified nature of our business and the leadership positions we retain across verticals,’ commented CEO Jon Steinberg.
Amongst London’s small caps, Kin & Carta jumped 8.4% to 112.11 pence.
The London-based business software consultancy said Apax Partners upped its takeover offer to 120p per Kin & Carta share, valuing the firm at £220.3 million on fully diluted basis from a previous £203 million.
It now believes the new bid is fair and reasonable, unanimously recommending to shareholders that they vote in favour of the scheme at the court and general meetings.
Brent oil was quoted at $74.52 a barrel at the London equities close Thursday from $75.14 late Wednesday. Gold was quoted at $2,028.77 an ounce at the London equities close Thursday, higher against $2,026.89 at the close on Wednesday.
In Friday’s UK corporate calendar, Berkeley Group will post its half year results
As well as the US jobs report, the economic calendar for Friday has Germany’s consumer price index reading at 0700 GMT. Overnight, there is a gross domestic product reading paired with trade balance data from Japan.
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