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LONDON MARKET CLOSE: FTSE 100 held back by miners and oil firms

7th Nov 2023 16:58

(Alliance News) - The FTSE 100 in London closed slightly lower on Tuesday, as miners and oil firms continued to drag down the index throughout the day.

The FTSE 100 index closed down 7.72 points, 0.1%, at 7,410.04. The FTSE 250 ended up 14.24 points, 0.1%, at 17,761.71, and the AIM All-Share closed up 0.75 of a point, or 0.1%, at 698.63.

The Cboe UK 100 ended down 0.2% at 739.72, the Cboe UK 250 closed up 0.1% at 15,421.18, and the Cboe Small Companies ended flat at 12,932.60.

The dollar recovered from some recent weakness on Tuesday, after the Reserve Bank of Australia chose to hike interest rates, calling into question the Federal Reserve's more dovish approach.

The pound was quoted at USD1.2304 at the London equities close Tuesday, down compared to USD1.2385 at the close on Monday. The euro stood at USD1.0688 at the European equities close Tuesday, lower against USD1.0736 at the same time on Monday.

Against the yen, the dollar was trading at JPY150.51, higher compared to JPY149.75 late Monday.

The Reserve Bank of Australia lifted the cash rate by a quarter of a percentage point to 4.35%, its highest level since December 2011. It was the first tightening in five months and also the first under the stewardship of Michele Bullock, who took over as central bank governor in September.

"Perhaps some read that if the RBA needs to restart its tightening cycle after a four-month pause, maybe the Fed does too," said ING Economics.

Meanwhile, BBH Currency Strategy said that "the Fed hawks are not going quietly."

On Monday, Minneapolis Fed chief Neel Kashkari did not declare victory in the fight against inflation. "Before we declare that 'we're absolutely done, we've solved the problem', let's get more data and see how the economy evolves," Kashkari said.

On Thursday Fed Chair Jerome Powell is scheduled to speak, so all ears will be on his takes.

Weighing in on the FTSE 100 on Tuesday were miners and oil majors.

Anglo American, Antofagasta, and Glencore fell 3.5%, 3.4% and 2.4% on the back of weak China data. Exports there declined in a poor reading of the global economy, however imports rose in a sign that domestic demand is picking up.

Weaker oil prices hurt BP and Shell, the duo declined 2.1% and 1.8%.

A barrel of Brent oil fell to USD83.71 early Tuesday, down from USD86.00 late Monday afternoon.

However, the FTSE 100 ended higher, thanks to some positive trading updates and results.

Finishing the day at the top of the index was AB Foods, jumping 6.8%.

The London-based food manufacturer, and fast fashion retailer through Primark, said pretax profit for the year ended September 16 leaped up 25% to GBP1.34 billion from GBP1.08 billion the year before.

Revenue increased by 16% to GBP19.75 billion from GBP17.00 billion, which AB Foods said was "driven in large part by pricing actions".

AB Foods declared a final dividend of 33.1 pence per share, up from 29.9p the year before, as well as a 12.7p special dividend. These brought the total financial 2023 payout to 60.0p per share, up 37% from 43.7p.

The company also announced a new share buyback programme aiming to raise GBP500 million over the next 12 months. It previously completed a GBP500 million buyback after the end of financial 2023.

Beazley ended up 7.1%.

Beazley said net insurance written premiums in the nine months to September 30 surged 26% to USD3.53 billion from USD2.80 billion, while written premiums rose 9% to USD4.33 billion from USD3.98 billion the year before.

Looking ahead, Chief Executive Officer Adrian Cox said he is looking forward to "reporting a strong profit at year-end," adding that "the insurance business is cyclical, and market conditions are evolving quickly."

In the FTSE 250 index, Watches of Switzerland rose 13%, as it backed annual guidance and set out lofty longer-term goals.

Revenue in the second-quarter to October 29, rose around 1.3% to GBP379 million from GBP374 million. It said luxury watch demand "remains robust". For the whole of the half-year, revenue was down around 0.5% year-on-year to GBP761 million.

The watch seller still predicts full-year constant currency revenue growth of 8% to 11%. Looking further ahead, it plans to double sales and profit by financial 2028, as WoSG set out its "long range plan".

Amongst London's small-caps, XP Power climbed 28%.

The designer and manufacturer of power controllers said it has raised GBP43.9 million via a placing of 3.8 million new shares at 1,150 pence per share.

On Monday, XP said the funds raised through the placing will be used to reduce net debt, improve the company's liquidity position, refinance capital investments and continue to invest in key areas including research & development.

On AIM, Naked Wines plunged 36%. The wine seller now predicts annual sales will fall between 12% and 16%. It had previously predicted a decline between 8% and 12%.

Stocks in New York were higher at the London equities close, with the DJIA up 0.3%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 1.0%.

In European equities on Tuesday, the CAC 40 in Paris ended down 0.4%, while the DAX 40 in Frankfurt ended up 0.1%.

Brent oil was quoted at USD82.55 a barrel at the London equities close Tuesday, down from USD86.00 late Monday. Gold was quoted at USD1,963.77 an ounce at the London equities close Tuesday, up against USD1,982.98 at the close on Monday.

In Wednesday's UK corporate calendar, Marks & Spencer will announce its half year results. There will also be first quarter results from JD Wetherspoon.

The economic calendar for Wednesday has the eurozone's retail trade reading at 1000 GMT. Before that, there will be CPI data for Germany at 0700 GMT.

By Sophie Rose, Alliance News senior reporter

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