26th Jan 2023 17:08
(Alliance News) - Stocks in London were higher at the close on Thursday following the release of improved economic data out of the US which suggested the world's largest economy may avoid an imminent recession.
The FTSE 100 index closed up 16.24 points, or 0.2% at 7,761.11 on Thursday. The FTSE 250 ended up 111.47 points, or 0.6%, at 19,915.51. The AIM All-Share closed up 4.63 points, or 0.5%, at 865.41.
The Cboe UK 100 ended up 0.2% at 775.94, the Cboe UK 250 closed up 0.5% at 17,366.06, and the Cboe Small Companies ended up 0.3% at 13,622.40.
The US economy continued to grow in the final three months of 2022, at a pace slightly above expectations, according to a first estimate from the US Bureau of Economic Analysis.
The bureau's first estimate of fourth-quarter gross domestic product was 2.9% annual growth. Economists had expected an annualised growth rate of 2.8% in the last quarter of 2022, according to market consensus cited by FXStreet.
"If there are any concerns that the US economy is on the brink of a recession it's certainly not being reflected in the economic data, which still looks reasonably solid," said CMC Market's Michael Hewson.
The data comes ahead of a two-day Federal Open Market Committee meeting starting on Tuesday next week.
"The Fed will look at the latest round of data most likely downshifting to a quarter -point pace, but because the labour market remains strong, they will stand by their dot-plot forecast and signal hikes could continue," explained Craig Erlam at Oanda.
According to the Department of Labor, in the week that ended January 21, the advance figure for seasonally adjusted initial claims was 186,000. This represents a decrease of 6,000 from the previous week's unrevised level of 190,000.
The pound was quoted at USD1.2363 at the London equities close on Thursday, up from USD1.2354 at the close on Wednesday. The euro stood at USD1.0862, a touch lower against USD1.0886 at the same time on Wednesday.
Against the yen, the dollar was trading at JPY130.40 late Thursday, higher compared to JPY129.78 late Wednesday.
Stocks in New York were broadly higher at the London equities close, with the Dow Jones Industrial Average flat, the S&P 500 index up 0.3%, and the Nasdaq Composite up 0.6%.
In the FTSE 100, 3i Group jumped 9.1% after the firm said it is on track of "good growth" this financial year, despite pressure in its consumer discretionary sector investees amid tough economic conditions.
3i Group, whose investments range from infrastructure to retail, said its diluted net asset value per share at the end of its third quarter on December 31 grew 12% to 1,649p from 1,477p at the end of September.
3i Group was the best blue-chip performer at the close on Thursday. Meanwhile, Diageo finished the day as the FTSE 100's worst performer, closing down 5.6%.
The brewer and distiller reported a double-digit profit rise in the first half of its financial year, but cautioned that organic sales growth in many regions will moderate due to a strong comparative.
Diageo, which owns brands including Baileys, Tanqueray, and Smirnoff, said pretax profit in the six months to December 31 increased 12% to GBP3.06 billion versus GBP2.72 billion a year earlier. Net sales rose 18% year-on-year to GBP9.42 billion from GBP7.96 billion.
Looking ahead, it said it expects organic net sales growth in Europe to moderate in the second half of its current financial year to June 30. In the Asia Pacific, Latin America & Caribbean and Africa regions, it anticipates growth to slow due to "strong" sales during financial 2022.
In the FTSE 250, Intermediate Capital rose 6.8% after the London-based asset manager said assets under management at December 31 increased by 8.8% to USD74.5 billion from USD68.5 billion at September 30.
Fee-earning AuM was USD60.9 billion, increasing 6.3% from USD57.3 billion at September 30.
Tate & Lyle finished 6.1% higher after the sweetener and food ingredients supplier backed its outlook for the financial year ending March 31, as it reported revenue had risen by 16% in the three months to December 31.
Wizz Air dropped 7.2% after the low-cost airline admitted that, despite a rise in passenger numbers and revenue in its third-quarter, it still expects to make an annual loss.
It made a EUR642.5 million net loss in financial 2022, widened from EUR576.0 million the previous year. Its last net profit was the EUR201.1 million achieved in financial 2020.
Wizz Air added it was "confident" the next financial year will be profitable.
Elsewhere in London, Provident Financial finished up 3.4%. The banking group announced that its chief executive officer, Malcolm Le May, is to step down, and noted its fourth quarter trading remains in line with market expectations, with net lending particularly strong as credit issued and customer acquisition volumes increased "significantly" year-on-year.
Le May will be replaced by Ian McLaughlin, who Provident Financial describes as a highly experienced banking CEO, with a strong track record of delivering growth.
In addition, Provident Financial said it plans to change its name to Vanquis Banking Group PLC from March, in recognition of its new and future mix of lending products and its repositioning as a specialist banking group.
In European equities on Thursday, the CAC 40 in Paris ended up 0.7%, while the DAX 40 in Frankfurt ended 0.3% higher.
Brent oil was quoted at USD87.35 a barrel at the London equities close on Thursday, up from USD86.11 late Wednesday. Gold was quoted at USD1,925,42an ounce, sharply lower against USD1,933.82 at the close on Wednesday.
In Friday's UK corporate calendar, there are trading statements from YouGov and Paragon Banking Group.
In the economic calendar, financial markets in Shanghai will remain closed as the Chinese New Year public holiday continues. Markets in Hong Kong will be open.
By Heather Rydings, Alliance News senior economics reporter
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