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LONDON MARKET MIDDAY: FTSE 100 outperforms European counterparts

31st May 2024 11:51

(Alliance News) - The FTSE 100 was outperforming its European counterparts at midday Friday, after inflation in the eurozone came in hotter-than-expected.

The FTSE 100 index was up 28.37 points, 0.3%, at 8,259.42. The FTSE 250 was up 6.68 points at 20,677.55, and the AIM All-Share was up 1.59 points, 0.2%, at 804.28.

The Cboe UK 100 was up 0.3% at 823.92, the Cboe UK 250 was down 0.4% at 18,148.14, and the Cboe Small Companies was down 0.1% at 17,209.82.

In European equities on Friday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was down 0.2%.

Inflation in the Eurozone picked up by more than expected in May, preliminary data on Friday showed.

According to Eurostat, yearly consumer price inflation in the eurozone picked up by 2.6% in May, having risen by 2.4% in April. This was hotter-than-expected, with FXStreet expecting a 2.5% rise.

On a monthly basis, CPI rose by 0.2% in May. In April from March, prices rose by 0.6%.

"While the European Central Bank seems set to lower rates next week, the debate over how much the ECB can release the brakes on the economy over the rest of the year will be heated," analysts at ING said.

The ECB will make its next interest rate decision on Thursday next week.

Investors are also eyeing the trajectory of US interest rates, and how inflation will effect future decisions. The latest US personal consumption expenditures data is out at 1330 BST on Friday.

According to FXStreet, numbers on Friday are expected to show that the core PCE index, the Federal Reserve's preferred US inflation gauge, rose 2.8% year-on-year in April, the same pace of growth as in March.

The core PCE reading does not include food or energy. The headline index, which does, is expected to have risen 2.7% on-year in April, also the same pace of growth as in March.

The US Federal Reserve will make its own interest rate decision on June 12.

Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index down 0.3%, and the Nasdaq Composite down 0.5%.

The pound was quoted at USD1.2720 at midday on Friday in London, lower compared to USD1.2738 at the equities close on Thursday. The euro stood at USD1.0849, higher against USD1.0839. Against the yen, the dollar was trading at JPY157.27, down compared to JPY156.65.

In the FTSE 100, JD Sports lost 7.5%, falling to the bottom of the index.

The Lancashire, England-based sports-fashion retail company said revenue climbed 4.1% to GBP10.42 billion in the 53 weeks ended February 3, from GBP10.13 billion in the 52 weeks ended January 28, 2023.

In the 52 weeks ended January 27, 2024, revenue was up 2.7% to GBP10.40 billion from GBP10.13 billion a year prior.

"Trading was impacted in the first half of the year by slower camping sales and in the second half of the year by unseasonably mild weather which affected sales of winter apparel and accessories," JD Sports said.

Pretax profit jumped 67% in the 53 weeks ended February 3 to GBP811.2 million from GBP486.7 million in the 52 weeks ended January 28, 2023.

However, adjusted pretax profit in the 52 weeks to January 27 fell 8.0% to GBP912.4 million compared to GBP991.4 million a year prior.

Primark owner Associated British Foods lost 3.5%.

Its largest shareholder has sold 10.3 million AB Foods shares, a 1.4% stake, at 2,550 pence, worth GBP262 million in total.

Following the disposal, Wittington's stake in AB Foods will be 56.1%, though this will edge back up to 56.4% due to the share buyback currently being conducted by AB Foods. Wittington's main investment is AB Foods, though it also owns stakes in food and hospitality brand Fortnum & Mason, and invests in real estate.

Meanwhile, NatWest edged up 0.5%.

The UK government has sold GBP1.24 billion in NatWest shares back to the company, the Treasury and the bank said in separate statements.

Edinburgh-based NatWest was nationalised in 2008 and 2009, with several multibillion-pound bailouts leaving the UK taxpayer with an 84% stake in the company, which at the time was known as the RBS Group. The government since has been progressively reducing its stake by means of market sales and buybacks by NatWest.

Amongst London's small-caps, Galliford Try rose 3.5%, after it announced it had signed two contracts for public sector building projects.

The Uxbridge, England-based construction group said the contracts had a combined worth of GBP101 million.

Brent oil was quoted at USD81.94 a barrel at midday in London on Friday, down from USD82.83 late Thursday. Gold was quoted at USD2,343.20 an ounce against USD2,342.54.

By Sophie Rose, Alliance News senior reporter

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