6th Mar 2024 16:52
(Alliance News) - Stock prices in London closed higher on Wednesday, as Federal Reserve Chair Jerome Powell's testimony lacked in hawkish surprises, while the pound nudged higher as traders digested a series of policy measures unveiled by UK Chancellor Jeremy Hunt.
The FTSE 100 index ended up 33.15 points, 0.4%, at 7,679.31. The FTSE 250 shot up 202.19 points, 1.1%, at 19,473.22, and the AIM All-Share closed up 2.74 points, 0.4%, at 737.63.
The Cboe UK 100 ended up 0.5% at 769.32, the Cboe UK 250 closed up 1.2% at 16,826.71, and the Cboe Small Companies added 0.7% to 14,583.57.
In European equities on Wednesday, the CAC 40 in Paris rose 0.3% and the DAX 40 in Frankfurt added 0.1%.
Stocks in New York were higher at the time of the closing bell in Europe. The Dow Jones Industrial Average was up 0.6%, the S&P 500 and the Nasdaq Composite each added 0.8%.
The US Federal Reserve's progress in bringing down inflation is not yet certain, the chair of the country's central bank said on Wednesday ahead of two days of hearings in Washington.
"If the economy evolves broadly as expected, it will likely be appropriate to begin dialling back policy restraint at some point this year," Fed Chief Powell said in a statement.
"But the economic outlook is uncertain, and ongoing progress toward our two percent inflation objective is not assured," he added.
Pantheon Macroeconomics analyst Ian Shepherdson said Powell offered "nothing new".
"In short, no surprises, no news," Shepherdson said.
"Chair Powell stuck closely to the standard Fed script in his written Monetary Policy Testimony, breaking no new ground."
The pound was quoted at USD1.2750 late Wednesday, up from USD1.2721 at the equities close on Tuesday. The euro stood at USD1.0908, higher against USD1.0866. Against the yen, the dollar was trading at JPY149.36, down compared to JPY150.12.
Ebury analyst Matthew Ryan commented: "Sterling took today's UK spring budget in its stride, as tends to be the case in all but exceptional circumstances, with Chancellor Hunt delivering no real surprises to markets."
A cut to national insurance, stamp duty relief as well as a freeze on fuel and alcohol duties were among the marquee tax measures that Hunt announced in his budget.
The tobacco, oil and gas sectors were targeted to top up government coffers, however, as were 'non-doms'.
Just before his time on the despatch box came to an end, Hunt confirmed that from April 6, there will be a further cut to national insurance, trimming the rate paid by employees to 8% from 10%. In last year's autumn statement, it had been cut from 12%.
The average person in the UK has the "lowest effective personal tax rate since 1975", the chancellor claimed.
Despite the chancellor announcing an introduction of excise duty on vaping products with effect October 2026, shares in Supreme and Chill Brands surged on Wednesday in London. Supreme rose 15%, while Chill jumped 11%.
Hunt noted vapes have a "positive role" to play in helping smokers quit the habit. As a result, there was a one-off increase in tobacco duty to make sure vaping remains cheaper than smoking.
Elsewhere in London, ConvaTec shot up 6.2%. The Reading, England-based medical products and technology company said its pretax profit more than doubled to USD167.4 million in 2023, from USD81.9 million the prior year.
ConvaTec also said revenue increased 3.4% to USD2.14 billion from USD2.07 billion, while organic revenue growth accelerated to 7.2%, "broad-based across all four chronic care categories".
Elsewhere among London's large-caps, gold miners Fresnillo and Endeavour moved in opposite directions, after the precious metal hit another record high.
Gold was quoted at USD2,145.00 an ounce late Wednesday, up against USD2,125.97 at the same time on Tuesday. It had hit another record high of USD2,149.21 on Wednesday.
Endeavour rose 2.0%, though Fresnillo lost 2.9% as the dust settled following its annual results on Tuesday, which did not win over German bank Berenberg.
"We seriously considered downgrading Fresnillo to sell after its 2023 results but believe that, after a model update and review, the current valuation, albeit at a premium to most London-listed peers, just about sits in the range of fair value versus market price," Berenberg analysts said, in a note aptly titled "bearish hold".
Premier Foods jumped 12%, with shares in the company behind Ambrosia, Bisto, Mr Kipling and Oxo hitting a 12-month high.
It said it has reached an agreement with the RHM Pension Scheme Trustee to suspend pension deficit contribution payments from April 1.
The suspension of future contributions is taking place earlier than originally expected, reflecting the strong performance of the pension scheme, the company said.
As a result, Premier Foods said it would benefit from GBP33 million increased free cash flow for the financial year ending March 29, 2025.
Elsewhere, Digital 9 surged 26%.
The investor focused on "critical digital infrastructure assets" said it has received merger control approval in Iceland for the completion of the Verne transaction. On Tuesday, Digital 9 had received approval in Finland.
Back in November, Digital 9 announced the sale of its stake in the Verne Group for up to USD575 million to funds managed by Ardian France SA, a Paris-based investment and asset management firm.
Brent oil was quoted at USD83.78 a barrel late Wednesday in London, up from USD82.69 late Tuesday.
Thursday's economic calendar has an interest rate decision from the European Central Bank at 1315 GMT. The ECB is expected to leave rates on hold, but all eyes will be on clues for future policy decisions, as hope of an April rate cut dwindles.
Elsewhere, there is the latest US initial jobless claims data at 1330 GMT, after a Halifax UK house price index reading at 0700 GMT.
The local corporate calendar has annual results from insurers Admiral, Aviva and Beazley and Ladbrokes Coral owner Entain.
By Eric Cunha, Alliance News news editor
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