Become a Member
  • Track your favourite stocks
  • Create & monitor portfolios
  • Daily portfolio value
Sign Up
Add shares to your
quickpicks to
display them here!

LONDON MARKET CLOSE: Europe outperforms FTSE 100 as eyes turn to ECB

5th Jun 2024 16:55

(Alliance News) - The FTSE 100 in London closed higher on Wednesday, but underperformed against its European counterparts, as eyes turn to an expected interest rate cut from the European Central Bank on Thursday.

The FTSE 100 index closed up 14.91 points, 0.2%, at 8,246.95. The FTSE 250 ended down 44.58 points, 0.2%, at 20,673.41, and the AIM All-Share closed up 0.77 of a point, 0.1%, at 798.97.

The Cboe UK 100 ended up 0.2% at 822.65, the Cboe UK 250 closed down 0.3% at 18,150.02, and the Cboe Small Companies ended down 0.3% at 16,922.97.

In European equities on Wednesday, the CAC 40 in Paris and the DAX 40 in Frankfurt both ended up 0.9%.

The European Central Bank will take centre stage on Thursday, with an anticipated interest rate cut.

The ECB is expected to cut rates by 25 basis points, a quarter of a percentage point. The Frankfurt-based official lender is due to announce its latest interest rate decision on Thursday at 1315 BST.

ECB President Christine Lagarde is scheduled to take questions afterwards, and focus will be on the implications of what she says for market expectations about the pace and size of future rate cuts.

AJ Bell investment director Russ Mould expects the ECB "to steal a march on the Federal Reserve and Bank of England by cutting rates over the next 24 hours".

Ipek Ozkardeskaya at Swissquote Bank agreed but said the expected 25 basis point cut "may not suffice to cheer up investors depending on what the chief, Christine Lagarde, says at her press conference regarding the bank's position concerning further cuts."

The Bank of Canada led the charge on Wednesday by cutting its own interest rates, in a move which was widely expected by markets.

The BoC increased rates by 475 basis points to a 22-year high between March 2022 and July 2023 and has kept them on hold since then in its efforts to cool inflation.

But, on Wednesday, the BoC in a statement said it will cut interest rates by 25 basis points, in a widely anticipated move.

The Governing Council of the BoC said: "With continued evidence that underlying inflation is easing, the Governing Council agreed that monetary policy no longer needs to be as restrictive and reduced the policy interest rate by 25 basis points. Recent data has increased our confidence that inflation will continue to move towards the 2% target."

Stocks in New York were higher at the London equities close, despite some weak economic data on the US labour market. The Dow Jones Industrial Average was up 0.1%, the S&P 500 index up 0.7%, and the Nasdaq Composite up 1.3%.

Private sector employment in the US increased by 152,000 jobs in May, ADP data showed Wednesday.

The increase fell below FXStreet-cited expectations of 173,000. It was lower than April's figure of 188,000, which had been downwardly revised from 192,000.

The pound was quoted at USD1.2764 at the London equities close Wednesday, lower compared to USD1.2786 at the close on Tuesday. The euro stood at USD1.0866 at the European equities close Wednesday, lower against USD1.0881 at the same time on Tuesday. Against the yen, the dollar was trading at JPY156.19, higher compared to JPY154.89 late Tuesday.

In the FTSE 100, B&M fell 7.3%.

In the 53 weeks that ended March 30, the Luxembourg-headquartered variety goods retailer said pretax profit rose 14% to GBP498 million from GBP436 million a year prior. Revenue increased by 10% to GBP5.48 billion from GBP4.98 billion a year ago.

B&M said it intends to open between 15 to 20 UK stores in the first quarter of financial 2025 as it continues to progress towards the long-term target for 1,200 B&M UK stores.

But Shore Capital analyst Clive Black felt this was a "curious statement".

Black wondered whether it was wise to plan for around 1,200 stores in the UK, saying that "hostage to fortune comes to mind, as competition, attrition and cannibalisation must build."

Centrica lost 4.8%, after it said performance so far this year has been in line with expectations against the backdrop of a more "normalised" external environment.

In a trading statement ahead of Wednesday's annual general meeting, the Windsor, England-based owner of British Gas said full year group adjusted earnings per share are expected to be in-line with consensus analyst expectations.

Centrica put the analyst range for adjusted EPS at between 15.8 pence to 21.0p with a mean consensus of 18.3p. This will be sharply down from adjusted EPS of 33.4p in 2023 and 34.9p in 2022.

In the FTSE 250, Workspace jumped 6.2%.

The London-based owner and operator of flexible work space said in the financial year that ended March 31, pretax loss widened to GBP192.8 million from GBP37.5 million the year prior. This was attributed to a 9.5% fall in property valuations to GBP2.45 billion from GBP2.74 billion.

Net rental income increased to GBP126.2 million, up 8.2% from GBP116.6 million.

Workspace declared a final dividend of 19.00 pence per share, increasing 9.2% from 17.40p, bringing the full year dividend to 28.00p, up 8.5% from 25.80p.

On the other hand, Ninety One slipped 6.5%.

The London and Cape Town-based company said its pretax profit was up 2.0% to GBP216.8 million for the financial year that ended March 31, compared to GBP212.6 million a year before.

Revenue declined to GBP697.8 million, 6.4% lower than GBP745.5 million.

Ninety One cut its final dividend to 6.40 pence, down 4.5% from 6.70p. This left the total payout 6.8% lower at 12.30p versus 13.20p.

Brent oil was quoted at USD77.25 a barrel at the London equities close on Wednesday, up from USD77.01 late on Tuesday. Gold was quoted at USD2,351.20 an ounce at the London equities close Wednesday, higher against USD2,322.80 at the close on Tuesday.

In Thursday's UK corporate calendar, there are full year results from Mitie Group and Schroder Real Estate Investment Trust.

Before the ECB's interest rate decision, the economic calendar for Thursday has construction PMI data from the UK, the Eurozone and Germany. There is also the weekly US jobless reading at 1330 BST to look out for.

By Sophie Rose, Alliance News senior reporter

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

FTSE 100 Latest