24th Aug 2023 16:50
(Alliance News) - Stocks in London struggled at the close on Thursday as the afterglow from Nvidia's blowout earnings report faded as market attention turned to the Jackson Hole symposium.
"Thursday's rally in European and US stock indices on the back of much-better-than expected Nvidia [second-quarter] results ran out of puff as investors took money off the table ahead of Jerome Powell's Jackson Hole speech on Friday," said Axel Rudolph, senior market analyst at IG.
The FTSE 100 index closed up 13.10 points, or 0.2% at 7,333.63 on Thursday. The FTSE 250 ended down 31.92 points, or 0.2%, at 18,194.57. The AIM All-Share closed up just 0.25 of a point at 734.72.
The Cboe UK 100 ended up 0.2% at 731.24, the Cboe UK 250 closed down 0.3% at 15,931.63, and the Cboe Small Companies ended down 0.2% at 12,798.85.
Nvidia quarterly earnings managed to smash market forecasts on Wednesday, amid a surge in demand for its AI chips, with the firm at the forefront of what its founder dubs "a new computing era".
In the three months ended July 30, its second quarter, the firm said revenue climbed to USD13.51 billion, more than double from USD6.70 billion a year earlier. It also beat analyst consensus estimates of USD11.1 billion, as cited by CNN.
Nvidia also posted a rosy outlook, guiding for revenue of USD16 billion - far above the market consensus estimates of USD12.2 billion.
The stock soared to a new all-time high in New York on Thursday but has since faded from its intraday highs, trading 1.4% higher at the time of the London equities close.
The euphoria of a bumper earnings report from the chipmaker lost steam as market focus turned to the week's main event: the Jackson Hole symposium.
The event begins on Thursday and will run until Saturday. Bank of England Governor Andrew Bailey and European Central Bank President Christine Lagarde will be attending the meeting, however, Friday's appearance from US Federal Reserve Chair Jerome Powell remains the key event.
Markets will be keeping a keen ear out for any clues from the central bankers as to how long the fight against inflation will continue, where interest rates will end up and how long they will stay at elevated levels.
The dollar was on the front foot as the event got underway in Wyoming.
The pound was quoted at USD1.2639 at the London equities close on Thursday, down from USD1.2698 at the same time on Wednesday. The euro stood at USD1.0835, lower against USD1.0850. Against the yen, the dollar was trading at JPY145.66 late Thursday, up from JPY144.66 late Wednesday.
In London, FTSE 100 CRH slid 1.5% despite reporting a "robust" first-half performance, beating forecasts, as it benefited from prior year acquisitions and good underlying demand in key end-use markets.
In the six months ended June 30, the buildings material firm reported a pretax profit from continuing operations of USD1.51 billion, up 26% from USD1.20 billion the previous year.
Earnings before interest, tax, depreciation and amortisation rose 14% year-on-year to USD2.5 billion from USD2.2 billion a year prior. This figure beat both JPMorgan's and Davy Research's estimates of USD2.43 billion and USD2.3 billion, respectively.
Revenue totalled USD16.14 billion, up 7.6% from USD15.0 billion a year prior and beating JPMorgan's forecast of USD15.90 billion.
Back in June, CRH shareholders approved the company's plan to move to a US primary listing, which it had first announced in March. The change is expected to take effect on or around September 25 and will remove CRH from the FTSE 100.
"We believe a US primary listing will bring increased commercial, operational and acquisition opportunities for our business, further accelerating our successful integrated solutions strategy and delivering even higher levels of profitability, returns and cash for our shareholders," CRH said on Thursday.
In the FTSE 250, Liontrust Asset Management jumped 11% after it said it expects to declare its offer to buy GAM unsuccessful, having only secured the support of a third of the Zurich-based firm's shareholders.
The minimum acceptance condition for the bid was just over 66%, according to an earlier offer document.
Liontrust had announced an all-share deal to acquire GAM in May, at the time valuing the company at CHF107 million, around GBP96.0 million.
Liontrust Chief Executive John Ions said on Thursday: "We are disappointed we did not win the support of the majority of GAM's shareholders and are grateful to those GAM and Liontrust shareholders who did back our offer."
Now, it is back to the drawing board for Liontrust. The firm noted that it would book GBP11 million in one-off exceptional costs due to the failed takeover of GAM.
Elsewhere in London, Hunting dropped 6.1% despite reporting it had swung to a profit in the first half of the year, as revenue grew by a double-digit percentage.
The London-based international energy services group swung to a pretax profit of USD23.1 million in the six months that ended June 30 from a loss of USD500,000 a year before, as revenue grew by 42% to USD477.8 million from USD336.1 million a year prior.
On AIM, Kinovo climbed 5.6% to 51.20 pence after the specialist property service provider announced the receipt of a takeover offer from Rx3 Holdings at a price of 56 pence per share.
Kinovo noted that the possible offer is "at the lower end of the board's expectation." However, it admitted that the board has so far been unable to negotiate a higher price.
Kinovo added that Rx3 owner Tim Scott also owns Tipacs2, which holds around 30% of shares in Kinovo. Consequently, Kinovo noted that Tipacs2 has a "substantial level of influence over the company."
Stocks in New York were lower at the London equities close, with the Dow Jones Industrial Average down 0.4%, the S&P 500 index down 0.7%, and the Nasdaq Composite down 1.3%.
In European equities, the CAC 40 in Paris ended down 0.4%, and the DAX 40 in Frankfurt ended 0.6% lower.
Brent oil was quoted at USD82.41 a barrel at the London equities close on Thursday, down from USD83.28 late Wednesday. Gold was quoted at USD1,921.41 an ounce, higher against USD1,916.27.
Friday's economic calendar has UK consumer confidence survey data out overnight before a gross domestic product print for Germany at 0700 BST.
By Heather Rydings, Alliance News senior economics reporter
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