28th Feb 2024 11:52
(Alliance News) - Stock prices in London were lower at midday Wednesday, as investors nervously wait for some key US data.
The FTSE 100 in London took a big hit from disappointing results from St James's Place and Reckitt Benckiser.
The FTSE 100 index was down 50.42 points, 0.7%, at 7,632.60. The FTSE 250 was down 120.21 points, 0.6%, at 19,043.45, and the AIM All-Share was down 4.26 points, 0.6%, at 741.39.
The Cboe UK 100 was down 0.7% at 764.22, the Cboe UK 250 was down 0.9% at 16,376.69, and the Cboe Small Companies was up marginally at 14,567.65.
In European equities on Wednesday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was up 0.5%.
Focus is on the latest US economic growth figures on Wednesday, with personal consumption expenditures - which contains a key inflation metric - to follow on Thursday. The PCE reading is closely followed by the Federal Reserve when making decisions on interest rates.
According to FXStreet-cited consensus, the headline annual PCE inflation rate is to ease to 2.4% in January, from 2.6% in December. The core reading, the Fed's preferred inflationary gauge, is to ebb to 2.8% from 2.9%.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.3%, the S&P 500 index down 0.4%, and the Nasdaq Composite down 0.5%.
Meanwhile, in the eurozone, economic sentiment was weaker than expected this month, survey results on Wednesday showed.
According to the European Commission, the economic sentiment indicator for the eurozone fell to 95.4 points in February from January's revised reading of 96.1, which was first reported as 96.2. Market consensus, according to FXStreet, had been expecting an improved reading of 96.7 points for February.
"The economy remains stuck in stagnation with services weakening. The good news is that selling price expectations ticked down again, all providing fuel for rate cuts later this year," analysts at ING said.
The pound was quoted at USD1.2648 at midday on Wednesday in London, down compared to USD1.2693 at the equities close on Tuesday. The euro stood at USD1.0816, lower against USD1.0854. Against the yen, the dollar was trading at JPY150.63, higher compared to JPY150.41.
In the FTSE 100, St James's Place plummeted 32%. It was by far the worst performer.
The fund manager and financial adviser swung to a pretax loss of GBP4.5 million in 2023 from GBP503.9 million profit in 2022. SJP established a GBP426.0 million provision for potential client refunds "linked to the historic evidence and delivery of ongoing servicing".
"A combination of the provision we have established and an expected decrease in the level of profit growth in the next few years as we transition to our new charging structure, reduces our ability to invest for long term growth in our business over the next few years," said CEO Mark FitzPatrick.
The firm slashed its final dividend to 8.00p from 37.19p, bringing the full-year total to 23.83p, down from 52.78p. Going forward, it plans total annual shareholder distributions to be 50% of its annual underlying cash results. It also said dividends will be fixed at 18.00p annually for the next three years.
Reckitt Benckiser lost 12%.
The consumer goods firm said revenue in 2023 increased 1.1% to GBP14.61 billion from GBP14.45 billion a year before, missing company-compiled consensus estimates of GBP14.75 billion. Pretax profit dropped 22% to GBP2.40 billion from GBP3.07 billion, amid a GBP810 million goodwill impairment and other higher operating expenses.
AJ Bell's Russ Mould commented: "As the owner of a large portfolio of well-known brands, Reckitt has found life a lot tougher and its latest results suggest its pricing power isn't as strong as some people thought. The idea that it can keep pushing up prices without damaging demand has gone out the window as its fourth quarter numbers are truly miserable. It looks like people are voting with their feet and going for the cheaper option."
In the FTSE 250, HICL Infrastructure rose 3.6%.
The London-based closed-ended investment company said it has sold its entire stake in the US Northwest Parkway toll-road project to Vinci Highways SAS for about USD232 million.
HICL said that up to GBP50 million of the sale proceeds will be used to fund a share buyback programme, with the remainder allocated to the drawn balance on its GBP650 million revolving credit facility.
Amongst London's small-caps, Halfords plummeted 31%.
Halfords cut its annual profit forecast, after seeing "further material weakening" in three of its four core markets, which has resulted in a "significant" drop in like-for-like revenue growth in its Retail business.
The retailer now expects underlying profit before tax for the 52-week period to March 29 to be between GBP35 to GBP40 million, a downgrade from its guidance of GBP48 to GBP53 million last month.
Halfords explained that Cycling and Retail Motoring were hit by "weak customer confidence and unusually mild and very wet weather", which hit footfall and sales of categories such as winter and car cleaning products.
Brent oil was quoted at USD81.88 a barrel at midday in London on Wednesday, down from USD82.25 late Tuesday. Gold was quoted at USD2,027.44 an ounce, down against USD2,033.79.
By Sophie Rose, Alliance News senior reporter
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