20th Aug 2024 12:04
(Alliance News) - Stock prices in London took a hit going into Tuesday afternoon, with eyes on the trajectory of US interest rates.
The FTSE 100 index was down 55.96 points, 0.7%, at 8,300.98. The FTSE 250 was down 44.06 points, 0.2%, at 21,113.41, and the AIM All-Share was down 1.37 points, 0.2%, at 775.22.
The Cboe UK 100 was down 0.8% at 829.05, the Cboe UK 250 was down 0.3% at 18,496.27, and the Cboe Small Companies was down 0.2% at 16,826.52.
In European equities on Tuesday, the CAC 40 in Paris was up marginally, while the DAX 40 in Frankfurt was down 0.1%.
In economic news, the eurozone's consumer price inflation rate sped up slightly in July, official data confirmed Tuesday.
According to Eurostat, the rate of inflation in the single currency area picked up to 2.6% in July, from 2.5% in June, taking inflation back to where it stood in May.
On a monthly basis, consumer prices were flat between July and June. They had risen 0.2% in June from May.
Across the Atlantic, investors are keen to scrutinise the Fed's minutes, which are scheduled for release on Wednesday.
The Jackson Hole central bank economic symposium in Wyoming will get underway on Friday, bringing together central bankers and finance ministers, and academics and financial market players from around the world.
"Growing expectations of potential interest rate cuts by the Federal Reserve could continue to weigh on the dollar. Traders are increasingly betting on a 25-basis point cut in September, with the market pricing in a total of three rate cuts by the end of the year," said Tickmill's Joseph Dahrieh.
"However, some caution could remain as traders anticipate the Federal Reserve's Chair Jerome Powell's upcoming speech at the Jackson Hole symposium, where further clarity on the Fed's monetary policy direction is expected."
The pound was quoted at USD1.3004 at midday on Tuesday in London, higher compared to USD1.2980 at the equities close on Monday. The euro stood at USD1.1079, up against USD1.1063.
However, against the yen, the dollar was trading at JPY146.40, higher compared to JPY146.55.
Stocks in New York were called to open mixed. The Dow Jones Industrial Average was called down marginally. The S&P 500 index and the Nasdaq Composite are both called up 0.1%.
In the FTSE 100, oil majors BP and Shell were down 2.0% and 2.2%, respectively.
"Hopes of a ceasefire in Gaza and continuing concerns about Chinese demand combined to drive oil prices to their lowest levels since the beginning of August and that put index heavyweights BP and Shell under pressure," said AJ Bell's Danni Hewson.
"While oil did dip below USD76 around the beginning of August it has consistently traded above USD80 per barrel for much of this year. If oil prices remain at these levels it could help reduce inflationary pressures and give central banks more room to make interest rate cuts."
Brent oil was quoted at USD77.77 a barrel at midday in London on Tuesday, down from USD79.33 late Monday.
Also taking a hit at midday on Tuesday was BT. The London-based telecommunications operator was down 6.8%.
In the FTSE 250, John Wood rose 0.8%. It backed guidance despite first-half losses ballooning, just weeks after a Dubai suitor walked away from a GBP1.56 billion proposed takeover.
In the six months to June 30, the Aberdeen-based oilfield and engineering services firm said its pretax loss from continuing operating was USD961.7 million, widened from a USD26.0 million loss a year prior.
John Wood said this primarily reflects an impairment of goodwill of USD815 million and USD140 million of charges related to the exit of lump sum turnkey and large-scale engineering, procurement & construction work.
First half revenue fell 4.8% to USD2.84 billion from USD2.99 billion.
On London's AIM, Shuka Minerals plummeted 44%.
The mining company said it has been served an initial drawdown notice for GBP500,000 for general working capital purposes. explained that this is pursuant to the GBP2 million unsecured convertible note instrument with AUO Commercial Brokerage LLC.
"AUO has advised the company that its investment capital is currently tied up in ongoing transactions which have taken longer to conclude than they initially anticipated, and accordingly it does not have access to the requested initial CLN drawdown funds," Shuka said.
Gold was quoted at USD2,522.10 an ounce, up against USD2,503.87.
Still to come on Tuesday's economic calendar, there is inflation data from Canada at 1330 BST.
By Sophie Rose, Alliance News senior reporter
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