13th Sep 2024 12:04
(Alliance News) - London's FTSE 100 held modest gains at midday on Friday as mining stock strength offset further falls for index heavyweight, AstraZeneca.
The FTSE 100 index climbed 19.03 points, 0.2%, at 8,260.00. The FTSE 250 was up 138.55 points, 0.7%, at 20,834.33, and the AIM All-Share rose 2.61 points, 0.4%, at 743.97.
The Cboe UK 100 was up 0.3% at 826.32, the Cboe UK 250 rose 0.7% to 18,356.40, and the Cboe Small Companies added 0.1% at 16,742.76.
In European equities on Friday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt added 0.5%.
"The FTSE 100 ticked higher on Friday, putting the index on course for a solid if unspectacular week of gains," said AJ Bell investment director, Russ Mould.
Gold miners Fresnillo and Endeavour led the FTSE 100 risers, adding 5.2% and 5.0%, respectively, tracking the gold price higher. In the FTSE 250 Hochschild Mining climbed 2.7%.
The price of gold climbed to USD2,566.06 an ounce on Friday, from USD2,552.77 at time of the London close on Thursday.
"Gold prices are once again at record levels as the dollar weakens ahead of an anticipated interest rate cut from the US Federal Reserve next week," said AJB's Mould.
"A weaker dollar is typically supportive to gold because it is denominated in the US currency. Lower rates are also a driver for the precious metal as it increases its attractiveness versus assets like cash and bonds, where the level of income is likely to be lower."
"Other factors which have helped drive gold to all-time highs are buying by central banks and its traditional safe haven qualities, which have been in demand amid the ongoing conflicts in Ukraine and the Middle East, as well as the uncertainty created by the looming US presidential election."
The pound was quoted at USD1.3132 early Friday afternoon, up from USD1.3079 at the time of the London equities close on Thursday. The euro stood at USD1.1093, up from USD1.1036 late Thursday. Against the yen, the dollar was trading at JPY140.53, up from JPY142.33.
The renewed dollar weakness comes on renewed speculation that the Federal Reserve could cut interest rates by 50 basis points, rather than the 25bps expected, next week.
Former New York Federal Reserve President Bill Dudley said on Thursday there was a strong case for a 50 basis point interest rate cut while the Wall Street Journal reported the central bank was facing a dilemma on how much to cut rates, balancing inflation risks and job market conditions.
"A 50bp rate cut next week would be a gutsy move, however, if the Fed signal that they will front load rate cuts, then it could see fewer rate cuts down the line, which could take the market by surprise and weigh on risk sentiment. The market is still expecting the Fed to cut by 25bps next week, however, the chance of a 50bp move has increased in the last 24 hours," noted Kathleen Brooks at XTB Research.
The CME FedWatch Tool put the chances of a 50 basis points cut at 41% on Friday, compared with 28%, just a day ago.
The Fed's decision will come a day ahead of an expected rate hold by the Bank of England. On Friday, the Bank of Japan is also likely to leave interest rates unchanged.
Stocks in New York are called to open slightly higher. The Dow Jones Industrial Average and the S&P 500 are seen rising 0.2% and the Nasdaq Composite is called up 0.1%.
Holding London's blue-chip index back was a 2.0% fall in AstraZeneca, the highest valued firm in the FTSE 100.
The Cambridge-based pharmaceuticals firm has endured a tough week after a disappointing drug trial update.
On Friday, Deutsche Bank downgraded the stock to 'sell' from 'neutral' and lowered its price target to 10,500 pence from 11,000p.
Flutter Entertainment eased 1.6% after it agreed a deal which will see the firm join the rostrum in Brazil's fast-growing gambling industry.
It said it has forked out USD350 million to secure a majority stake in NSX Group, which operates the Betnacional brand.
Shore Capital Markets analyst Greg Johnson commented: "We see this as a sensible move, further expanding and accelerating its growth profile, consistent with its expansion profile."
"We would also see a positive read across to Entain and the implied valuation of its larger Brazil within the context of the wider group," Johnson remarked.
Entain rose 1.9%.
Vodafone rose 0.9% despite the UK's competition regulator stating a tie-up with Three in the UK could mean "tens of millions of mobile customers" seeing price increases.
The UK Competition & Markets Authority said the deal will lead to a "substantial lessening of competition".
The CMA said it welcomes responses to its provisional findings until October 4, and sets a deadline of September 27 for a notice of possible remedies.
A final decision is due on December 7, the CMA said.
Balfour Beatty rose 0.6% after winning a GBP363 million contract with National Grid.
The London-based infrastructure construction contractor will deliver the Bramford to Twinstead reinforcement project under a contract with National Grid's RIIO-2 framework.
Chief Executive Officer Leo Quinn said: "This award demonstrates the momentum we are capturing in the energy security and transition market."
On AIM, Volvere gained 4.6% after the turnaround investment firm reported improved half-year results.
Revenue climbed 16% to GBP22.2 million in first six months of 2024, from GBP19.1 million a year prior. Pretax profit jumped to GBP2.2 million from GBP441,000.
"Shire Foods' results, as our only subsidiary, impacts significantly on how the group performs and its strong trading has been encouraging, reflecting the commitment of our management and staff," Volvere stated.
Brent oil was quoted at USD72.69 a barrel early Friday afternoon, rising from USD72.35 late Thursday.
By Jeremy Cutler, Alliance News reporter
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