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LONDON MARKET CLOSE: FTSE 100 clings onto gain despite late slip

29th Sep 2023 17:01

(Alliance News) - Stock prices in Europe ended the third-quarter in the green on Friday, on largely favourable inflation data in the US and eurozone, as well as decent economic growth data from the UK.

The FTSE 100 faced some late pressure, however, registering only a marginal gain and closing well-off session highs.

The FTSE 100 index rose 6.23 points, or 0.1%, at 7,608.08. The FTSE 250 ended up 180.74 points, or 1.0%, at 18,279.42, and the AIM All-Share added 1.20 points, or 0.2%, at 726.18.

For the week, the FTSE 100 fell 1.0%, the FTSE 250 and the AIM All-Share each gave back 1.8%.

The Cboe UK 100 rose 0.3% at 760.70, the Cboe UK 250 surged 1.6% at 16,025.79, and the Cboe Small Companies added 0.9% at 13,484.64.

In European equities on Friday, the CAC 40 in Paris added 0.3% and the DAX 40 in Frankfurt rose 0.4%.

Stocks in New York were on the up. The Dow Jones Industrial Average rose 0.3%, the S&P 500 added 0.6% and the Nasdaq Composite climbed 1.0%.

For the third-quarter alone, the FTSE 100 edged up 1.0%, having suffered a 1.3% fall in the second-quarter. Heading into the final three months of 2023, the blue-chip index is 2.1% higher than where it stood at the end of 2022.

The final week of the quarter was a tricky one for equities, hurt by the expectation that the US Federal Reserve will keep rates higher for longer, the threat of a US government shutdown, and property sector woes in China.

The Fed was back under the spotlight on Friday, following the release of a US inflation reading.

The Federal Reserve's preferred US inflationary indicator faded back below the 4% threshold for the first time since September 2021, numbers on Friday showed.

According to the Bureau of Economic Analysis, the core personal consumption expenditures grew 3.9% on-year in August, fading from the 4.3% rise registered in July. The reading was in line with FXStreet cited consensus.

The core reading, the Fed's preferred inflation gauge, does not include food or energy. The headline annual PCE index, which does, accelerated.

The headline PCE index rose 3.5% on-year last month, quickening slightly from a 3.4% increase in July. It is the third month in-a-row that year-on-year growth in personal consumption expenditures has quickened. The figure was in line with FXStreet cited expectations, however.

Analysts at ING commented: "The Fed's favoured measure of inflation undershot expectations and has boosted the case for the Fed not hiking rates in the current quarter. But huge upward revisions to household savings suggests the consumer can remain more resilient than we thought likely and supports the case for the Fed keeping monetary policy tighter for longer."

In the eurozone, meanwhile, consumer price inflation is expected to cool to 4.3% in September, from 5.2% in August, according to a flash estimate from Eurostat on Friday.

Core consumer prices - which exclude energy, food, alcohol and tobacco - are expected to rise 4.5% on an annual basis in September, slowing sharply from a 5.3% rise in August.

The euro stood at USD1.0585 late Friday, higher against USD1.0568 on Thursday. Against the yen, the dollar was trading at JPY149.30, slightly lower compared to JPY149.36.

The pound was quoted at USD1.2207, largely flat from USD1.2209 at the London equities close on Thursday.

According to a second estimate from the Office for National Statistics, UK gross domestic product increased 0.2% against the prior quarter in second quarter of 2023. This was unchanged from an earlier estimate.

Meanwhile, GDP in the first quarter of the year was upwardly revised to a quarter-on-quarter increase of 0.3%, from a previous estimate of a 0.1% increase.

In the FTSE 100, athleisure retailer JD Sports added 5.1%. JD Sports surged in a positive read-across after New York-listed sports apparel maker Nike reported a first-quarter revenue rise.

Nike was up 6.4% in New York.

Water utility Severn Trent added 4.9%. It proposed "record" levels of investment in its new business plan for April 1, 2025 to March 31, 2030.

The water utility said the plan includes GBP12.9 billion total expenditure across its network, including GBP5.0 billion of investment focused on enhancing capacity and service beyond current levels.

Putting pressure on the FTSE 100, Shell and BP lost 1.8% and 1.5%, tracking oil prices lower.

Brent oil was quoted at USD92.64 a barrel early in London on Friday afternoon, down from USD94.09 at the London equities close on Thursday.

Oanda analyst Craig Erlam commented: "The oil price rally has continued this week although there are some signs that it's starting to run on fumes as we go into the weekend. The fundamentals remain very supportive of the price, with the market in deficit thanks to the efforts of Opec+ in restricting supply.

"But with investors now questioning the resilience of the global economy going into next year against the backdrop of higher interest rates for longer, that bullish bias in oil markets may become more balanced."

Back in London, Future was the best FTSE 250 performer, adding 25%.

It said its adjusted operating profit in the year ended September 30 is expected to be in line with board expectations of GBP254.1 million.

The company owns names including Marie Claire, Country Life, Money Week said that audience numbers have stabilised in the second half of its financial year, noting positive month-on-month momentum in the final quarter.

However, Future said trading conditions overall remain "mixed" with challenges in consumer spending and the digital advertising market.

Carnival declined 4.6% despite hailing "record revenue" in its third-quarter. Revenue in the three months ended August 31 rose 59% to USD6.85 billion from USD4.31 billion a year earlier.

Carnival reported a net income of USD1.07 billion, swinging from a loss of USD770 million.

The cruise ship firm added: "Booking volumes during the third quarter continued at significantly elevated levels, setting a new third quarter record for total bookings during the quarter."

Wealth manager Kingswood slumped 14% as it cut profit guidance.

Kingswood's revenue in the half-year ended June 30 declined 22% to GBP80.4 million from GBP62.7 million and its pretax loss widened to GBP9.9 million from GBP1.7 million.

Kingswood cut its proforma operating profit guidance to GBP13.6 million from GBP14.7 million, due to lower than expected investment banking and capital markets activity.

Gold was quoted at USD1,856.33 an ounce late Friday afternoon, lower against USD1,861.02 late Thursday.

Monday's economic calendar has a slew of purchasing managers' index readings, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.

The local corporate calendar has full-year results from flooring manufacturer James Halstead.

By Eric Cunha, Alliance News news editor

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