12th Feb 2025 12:03
(Alliance News) - European equities edged slightly higher on Wednesday afternoon, but trade lacked impetus as investors await a US inflation report.
The FTSE 100 index traded up 8.88 points, 0.1%, at 8,786.27. The FTSE 250 was 105.22 points higher, 0.5%, at 21,024.94, and the AIM All-Share rose just 0.34 of a point at 724.88.
The Cboe UK 100 was up 0.1% at 879.98, the Cboe UK 250 was 0.6% higher at 18,366.30, and the Cboe Small Companies was up 0.5% at 15,957.30.
In European equities, the CAC 40 in Paris was fractionally higher, while the DAX 40 in Frankfurt added 0.3%. The blue-chip benchmark in Frankfurt spiked above 22,100 points to hit a new record high.
Analysts at Deutsche Bank noted "markets have been getting slightly more concerned in recent days" over inflation.
Wednesday's data at 1330 GMT is expected to show the pace of annual US consumer price inflation was unmoved at 2.9% at the start of the year.
"In terms of what to expect, our US economists are looking for monthly headline CPI at +0.31%, which would keep the year-on-year rate at +2.9%. Then for core CPI, they're looking for a monthly +0.28% print, with the year-on-year rate ticking down a tenth to +3.1%. The other key thing to look out for will be the annual revisions to the seasonal adjustment factors, which could affect the last 5 years of data. Last year the revisions didn't change the picture much at all, but two years ago they showed that inflation wasn't slowing as rapidly as we thought, so that shifted attitudes in a more hawkish direction," Deutsche analysts added.
Ahead of the data, Federal Reserve Chair Jerome Powell said Wednesday the central bank is in no hurry to cut rates. Powell testifies before US lawmakers for a second day on Thursday.
"Normally the second act doesn't get as many headlines but there's a chance today's CPI may solicit a slightly different tone or encourage different questions. All depends on where the release is relative to expectations," Deutsche analysts said.
The pound was quoted at USD1.2458 early Wednesday afternoon, perking up from USD1.2421 at the time of the London equities close on Tuesday. The euro climbed to USD1.0377 from USD1.0349. Against the yen, the dollar surged to JPY153.51 from JPY152.31.
Convera analyst George Vessey said there are signs of "tariff fatigue" in foreign exchange markets.
"While tariff risks persist, currencies have responded resiliently, with risk-sensitive FX appreciating against the dollar," Vessey said.
In London, Prudential shares shot up 6.6%. The Asia-focused insurer said it is mulling a potential listing of ICICI Prudential Asset Management. The move would involve the "partial divestment of its shares".
"It is intended that following the completion of such a divestment, the net proceeds would be returned to shareholders. We will provide a further update at an appropriate time," Prudential said.
The company has undergone a series of changes in recent years, including the spin-off of M&G and the demerger of Jackson Life.
Barratt Redrow added 5.1%. It said it expects annual earnings at the upper end of consensus amid signs of improving market conditions.
The housebuilder said the integration of Redrow is "progressing well" with GBP100 million of cost synergies expected, GBP10 million ahead of the original target.
Pretax profit improved 23% to GBP117.2 million in the 26 weeks to December 29 from GBP95.2 million a year earlier. Revenue rose 23% to GBP2.28 billion from GBP1.85 billion.
Reported metrics are based on the reported performance of the Barratt Group in the comparable reporting period, and do not include Redrow, an acquisition sealed in August to form Barratt Redrow, the firm explained.
Chief Executive David Thomas said he is "pleased" with the performance.
"As the economic, political and lending environments have stabilised, there has been some recovery in customer demand and we have seen solid reservation activity since the start of January, building a strong forward sales position.
"As a result, we now expect our full year adjusted profit before tax will be towards the upper end of market expectations."
Barratt Redrow puts adjusted pretax profit consensus at GBP542 million, with a range between GBP506 million to GBP588 million.
Looking further it ahead, it provided medium-term guidance for the newly combined group.
It expects to deliver 22,000 homes per year in the medium-term, with the operating margin reaching around 15%. The operating margin in the half-year just ended was 5.0%, slipping from 5.3%.
TBC Bank led the way among the FTSE 250, jumping 11%. It hailed record profit in 2024, highlighting economic growth in Georgia and a solid expansion in Uzbekistan.
The Tbilisi, Georgia-headquartered lender said pretax profit in 2024 rose 16% to GEL1.54 billion, around GBP443.0 million, from GEL1.33 billion in 2023.
Net profit climbed 15% to a record GEL1.31 billion.
Also on the up in London were easyJet and Wizz Air. Wizz Air added 3.5%, while easyJet rose 1.7%. Kepler Cheuvreux started easyJet at 'buy' but Wizz Air at 'hold'. It started IAG at 'buy', though Bernstein cut the British Airways parent to 'market-perform' from 'outperform'.
IAG shares were down 0.1%.
Drugmaker GSK lost 1.2% after Morgan Stanley started the stock at 'underweight'.
GSK was among the heavyweights capping the FTSE 100's progress, as were Shell and BP, who fell 0.7% and 1.1%. The oil majors tracked Brent lower.
A barrel of Brent fell to USD76.18 early Wednesday afternoon, from USD76.81 at the London equities close on Tuesday. Gold faded to USD2,882.59 an ounce from USD2,906.30.
Fresnillo and Endeavour Mining followed gold lower, giving back 0.7% and 0.9%.
Elsewhere in London, Gelion shares charged 10% higher. The battery technology company said it has shown that its proprietary Gen 3 Sulfur Cathodes are viable for full solid-state batteries, following testing by a "renowned European research institution".
This means the company can establish a "significant market presence" alongside traditional lithium-ion cathodes, the company said.
Analysts at Cavendish commented: "The demonstration comprised Gelion's high-energy density sulfur cathode material which was tested by an independent third party in a full solid-state battery. We believe this provides a meaningful reference point which could be used to help secure potential strategic partners, and that it remains the company's key focus."
By Eric Cunha, Alliance News news editor
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