16th Feb 2023 16:55
(Alliance News) - Blue-chip benchmarks in London and Paris hit record highs on Thursday, with the FTSE 100 managing to cling to its daily gain, despite some weakness following US producer price data.
Another red-hot US inflationary reading saw the FTSE 100 slip into negative territory. It climbed back into the green as the afternoon progressed, however, but closed off session high.
"It's been a day of two halves for European markets today, with both the FTSE 100 and CAC 40 making new record highs this morning, before slipping back from those peaks during the afternoon session," CMC Markets analyst Michael Hewson commented.
"The catalyst for the pullback was a US PPI report, which punched a hole in the speed of the disinflation narrative that has driven this week's stock market gains. It was a timely reminder to markets that while inflation may have peaked, the move lower in prices isn't going to be a straight line, and that there are likely to be many twists and turns on the way."
The FTSE 100 index ended up 14.70 points, or 0.2%, at 8,012.53. It struck a record high of 8,047.06 points earlier on Thursday.
The FTSE 250 closed 15.82 points, or 0.1%, lower at 20,156.77. The AIM All-Share edged up by just under 0.10 of a point, closing at 869.59.
The Cboe UK 100 closed up 0.1% at 801.94, the Cboe UK 250, however, fell 0.1% to 17,553.06. The Cboe Small Companies lost 0.2% to 14,012.77.
In European equities on Thursday, the CAC 40 in Paris surged 0.9%, it had hit a record high in late-morning trade. The DAX 40 in Frankfurt closed up 0.2%.
On a monthly basis, the US producer price index for final demand increased 0.7% in January, reversing from a 0.2% decline in December.
This came above expectations, according to FXStreet. Markets had expected the producer price index to increase 0.4% in January.
Excluding food, energy and trade services, the index for final demand rose 0.6% in January. The US Bureau said this was the index's largest advance since March 2022.
On an annual basis, the index for final demand rose 6.0% in January, slowing from a 6.5% increase in December. Markets had expected producer price inflation to cool to 5.4%.
Stocks in New York were lower around the time of the closing bell in London, spooked by the inflation data.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite each fell 0.7%.
The pound was quoted at USD1.2004 at late Thursday in London, largely unchanged from USD1.2007 at the close on Wednesday. The euro stood at USD1.0674 Thursday, up slightly against USD1.0669 at the London equities close on Wednesday. Against the yen, the dollar was trading at JPY134.08, lower compared to JPY134.32.
In London, British Gas owner Centrica climbed 5.7%.
It reported a swing to a statutory loss in 2022 on re-measurement and higher operating costs, but adjusted profit tripled as revenue surged 84%.
The Windsor, England-based firm revealed a pretax loss of GBP240 million in 2022, compared to a profit of GBP954 million in 2021.
The swing to a loss was on re-measurements after taxation, Centrica said, largely reflecting the revaluation of UK energy supply hedging positions due to wholesale gas and power price falls towards the end of the year. The cost for re-measurement and settlement of derivative energy contracts ballooned to GBP8.48 billion in 2022 from GBP434 million in 2021.
However, adjusted operating profit tripled to GBP3.31 billion from GBP948 million.
Centrica added it intends to extend its existing GBP250 million buyback programme, announced in November, by an additional GBP300 million. This would result in Centrica buying back 10% of its share capital, the power utility said.
Standard Chartered rose 4.1%. It reported a pretax profit of USD4.29 billion in 2022, up 28% from USD3.35 billion in 2021, as interest income jumped by nearly 50% to USD15.25 billion from USD10.25 billion.
Profit fell short of consensus, however. It also announced a USD1 billion share buyback.
Among FTSE 250 stocks, Indivior tumbled 14%. The pharmaceutical company reported a swing to loss as it counts the cost of litigation provisions.
It posted a pretax loss of USD95 million in 2022 from a profit of USD190 million in 2021, despite a jump by 14% in net revenue to USD901 million from USD791 million.
Indivior booked a USD290 million exceptional provision in 2022, as it navigates initial mediation sessions in late January regarding legacy civil multi-district antitrust litigation.
Sausage casings maker Devro received an increased and "final" takeover offer from suitor Saria worth GBP564 million.
The Glasgow, Scotland-based firm deems the bid "fair and reasonable". Devro shares ended 6.7% higher, giving it a market capitalisation of GBP547.6 million.
On AIM, Jaywing tumbled 35%. The advertising and marketing agency expects an annual outturn below market expectations.
Its pipeline of new business remains "encouraging" but warned it has seen a softening in demand over the past two months.
As a result, significant project revenue previously expected to start in the fourth quarter of its financial year is now unlikely to begin by the March 31 year-end.
Full year revenue is now expected between GBP22.0 million and GBP22.5 million, compared to GBP23.3 million in financial 2022, with adjusted earnings before interest, tax, depreciation and amortisation ahead of last year but below market expectations.
Brent oil was quoted at USD85.13 a barrel in London on Thursday, up from USD84.07 late Wednesday. Gold was quoted at USD1,835.31 an ounce, higher against USD1,832.19.
Friday's economic calendar has a UK retail sales reading and German producer price index data at 0700 GMT.
The local corporate calendar has annual results from lender NatWest and property investment firm Segro.
By Eric Cunha, Alliance News news editor
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