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LONDON MARKET CLOSE: CAC 40 underperforms amid political uncertainty

26th Jun 2024 17:04

(Alliance News) - Stock prices in London closed lower on Wednesday, with eyes on two days of key US economic data to close of the week.

Uncertainty continues to dominate Europe, too, as investors look ahead to upcoming elections in France and the UK. The CAC 40 in Paris took the biggest hit on Wednesday, ahead of the election Sunday.

The FTSE 100 index closed down 22.46 points, 0.3%, at 8,225.33. The FTSE 250 ended down 65.33 points, 0.3%, at 20,298.10, and the AIM All-Share closed down 2.11 points, 0.3%, at 765.92.

The Cboe UK 100 ended down 0.2% at 818.62, the Cboe UK 250 closed down 0.4% at 17,672.21, and the Cboe Small Companies ended up 0.8% at 16,996.22.

In European equities on Wednesday, the CAC 40 in Paris ended down 0.7%, while the DAX 40 in Frankfurt ended down 0.1%.

Stocks in New York lacked direction at the London equities close, with the DJIA down 0.1%, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.3%.

Eyes are on US economic data over the next two days.

On Friday there is the latest US personal consumption expenditures data, which is the US Federal Reserve's preferred inflation gauge.

According to FXStreet, the PCE reading is expected to ebb slightly to 2.6% in May on-year from 2.7% a month earlier.

ING's Robert Carnell called the PCE reading the "big release of the week."

Before then, on Thursday, investors will be digesting a US gross domestic product reading. This will be release at 1330 BST.

Already on Wednesday, investors have been investing some weak US housing data.

The US Census Bureau reported that new home sales fell by 11% in May on-month to 619,000 from 698,000 a month earlier.

"New home sales may continue to be subdued until we see a more substantial decline in mortgage rates. We do expect a modest rebound in sales later in H2 of this year when we look for mortgage rates to decline more decisively below 7% once Fed rate cuts get underway," said analysts at Oxford Economics.

"Our forecast continues to be for the first rate cut to come in September, with cuts to continue at every other meeting after that."

The pound was quoted at USD1.2624 at the London equities close Wednesday, lower compared to USD1.2676 at the close on Tuesday. The euro stood at USD1.0678 at the European equities close Wednesday, lower against USD1.0705 at the same time on Tuesday.

Against the yen, the dollar was trading at JPY160.66, higher compared to JPY159.73 late Tuesday.

In Europe, markets are facing political instability in the run up to the French and the UK elections.

French Prime Minister Gabriel Attal and the chief of the main far-right party Jordan Bardella clashed in an ill-tempered debate Tuesday that exposed fierce tensions less than a week ahead of the most polarising election in decades.

Attal, Bardella and hard-left MP Manuel Bompard, representing the left-wing coalition, exchanged accusations in a sometimes bruising live TV encounter where discussion of issues was often drowned by a cacophony of voices.

Bardella's National Rally still has a clear lead in opinion polls ahead of Sunday's first round of voting in the parliamentary elections, followed by the left-wing New Popular Front coalition with President Emmanuel Macron's centrist alliance lagging in third.

Uncertainty in the political sphere was not limited to France, with so-called "gamblegate" dominating the UK election. This comes little over a week until polling day.

In the FTSE 100, Phoenix Group closed down 1.5%, after it said it is exploring a potential disposal of its SunLife business.

The London-based insurer and pensions provider said it had made the decision following a strategic review.

Haleon lost 0.3%.

The Surrey, England-based consumer healthcare arm said it has agreed to sell its nicotine replacement therapy business outside of the US to Dr Reddy's Laboratories SA. The deal is worth up to GBP500 million in total.

"This divestment will allow Haleon to exit the NRT category outside of the US and will reduce complexity across the business allowing increased focus on strategic growth areas," Haleon said.

In the FTSE 250, shares in Future leapt 8.3%, boosted by a double-upgrade from Jefferies sparked by its confidence in a strong return to revenue growth at the company.

"Signs of inflection and Growth Acceleration Strategy progress provide us with confidence to double upgrade Future," the broker stated in a note to clients.

Jefferies moved Future, the Bath, England-based online magazine publisher and owner of price comparison website Go Compare, to 'buy' from 'underperform'.

Apax Global Alpha edged up 3.0%. The London-based investment trust announced a EUR30 million share buyback, as it concludes the review of its capital allocation policy.

"The new capital allocation framework constructed in line with AGA's investment objectives to maximise returns for shareholders across economic cycles, and taking into account AGA's overall financial position which continues to be prudently managed," Apax explained.

Amongst London's small-caps, ProCook rose 12%.

The pots and pans seller said revenue in the year to March 31 rises 0.4% to GBP62.6 million from GBP62.3 million. It swung to a pretax profit of GBP700,000 from a loss of GBP6.5 million.

Brent oil was quoted at USD84.21 a barrel at the London equities close Wednesday, down from USD85.05 late Tuesday. Gold was quoted at USD2,297.70 an ounce at the London equities close Wednesday, lower against USD2,324.50 at the close on Tuesday.

In Thursday's UK corporate calendar, there are full year results from Watches of Switzerland, Currys, and Halfords.

As well as the US GDP reading, the economic calendar for Thursday has a eurozone consumer confidence reading at 1000 BST.

At 1330 BST there is the weekly US initial jobless claims data to digest, as well as trade balance data.

By Sophie Rose, Alliance News senior reporter

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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