30th Nov 2022 12:30
(Alliance News) - Stocks in London were higher at midday on Wednesday following a softer-than-expected flash inflation print from the EU and ahead of an eagerly awaited speech from the head of the US central bank.
"The remainder of the week will provide investors with plenty to ponder, as a raft of economic data gives the latest indication on the state of the US economy," said interactive investor's Richard Hunter.
"At the same time, a speech by Federal Reserve Chair Powell later today is expected to reiterate the central bank's determination to focus on inflation as its core objective, regardless of the potential ramifications. Although such comments should be of little surprise, inevitably those searching for confirmation that the Fed will slow its round of rate hikes are likely to be disappointed once more," he continued.
Fed Chair Powell will speak at 1830 GMT. Before that, the ADP national employment report is due at 1315 GMT. The ADP figures provide foretaste of the key US nonfarm payrolls report for November, which is due on Friday.
The FTSE 100 index was up 55.30 points, 0.7%, at 7,567.30 at midday on Wednesday. The FTSE 250 was up 28.41 points, 0.2%, at 19,214.57, and the AIM All-Share was up 2.91 points, 0.3%, at 847.13.
The Cboe UK 100 was up 0.7% at 756.69, the Cboe UK 250 was up 0.1% at 16,625.98, and the Cboe Small Companies up 0.6% at 13,255.45.
Stocks in New York were called higher on Wednesday ahead of the economic data and Powell's speech. The S&P 500 was called up 0.2%, the Nasdaq Composite up 0.4%, and Dow Industrials up 0.1%.
The dollar was mixed. The pound was quoted at USD1.2006 at midday on Wednesday in London, up from USD1.1982 at the London equities close on Tuesday. The euro stood at USD1.0358, also higher, against USD1.0340 late Tuesday.
But against the yen, the dollar was trading at JPY138.79, up from JPY138.38.
In addition to Powell's address, dollar traders are awaiting the release of a US GDP estimate on Wednesday and the employment figures on Friday.
"Two important sets of data, that are likely to influence the Federal Reserve's decision making when it meets again in December," Ricardo Evangelista at ActivTrades explained.
In European equities early Wednesday afternoon, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.4%.
Eurozone inflation slowed by more than expected in November but remained in double digits annually, a flash estimate from Eurostat showed on Wednesday.
The consumer price index is estimated to have jumped 10.0% in November from a year before, slowing from a 10.6% increase in October, figures from the statistical office of the EU showed.
Market consensus cited by FXStreet had estimated a 10.4% annual inflation rate in November.
Bert Colijn, senior economist at ING, said: "While we're far from out of the woods yet, it does look like the current economic environment could push the European Central Bank to a smaller 50 [basis point] hike next month."
In the FTSE 100, Anglo American was up 2.4%. The mining firm announced its technical director, Tony O'Neill, has decided to retire.
Following O'Neill's departure, the role will be divided into two to "facilitate the next phase of prioritisation for Anglo American's technical disciplines to best support business performance", the company explained.
Anglo American said Matt Daley will become group technical director from January 1. It added that the process to appoint group projects & development director is "well advanced".
In the FTSE 250, Elementis was up 3.8%. The chemicals company announced the sale of its Chromium business for USD170 million.
"Whilst Chromium has been a part of Elementis for many years, our strategic review concluded that the interests of all stakeholders would now be best served by a sale of the business," said Chief Executive Paul Waterman.
The sale is subject to US regulatory approval, which is expected before the end of the first quarter of 2023. Proceeds from the sale will be used to reduce the firm's debt, Elementis said.
Home REIT fell 4.2% after it responded to the short-selling report by Viceroy Research.
The investor in accommodation for homeless people expressed "deep frustration" that it is spending time and resources responding to "baseless and misleading allegations".
Home REIT rebutted five allegations made by Viceroy, including claims that its tenants do not appear to be paying rent and that the firm has systematically inflated the prices of properties on its balance sheet.
Future fell 4.9% despite the magazine publisher reporting its annual profit increased substantially, as its Magazine division drove an increase in revenue following acquisitions in the year.
Future reported a 58% rise in pretax profit to GBP170.8 million for the 12 months ended September 30, from GBP107.8 million the year before.
Revenue increased 36% to GBP825.4 million from GBP606.8 million, with revenue in the Magazine division increased by 58% to GBP290.2 million from GBP184.0 million, following the acquisition of Dennis Publishing, a consumer media subscriptions business, which "continued to perform well".
Elsewhere in London, Petra Diamonds fell 5.3% despite the company saying there is a low risk of further breaches at the tailings storage facility wall breach at the Williamson mine in Tanzania.
Earlier this month, the London-based diamond miner focused on South Africa and Tanzania said the eastern wall of the storage facility was breached due to flooding.
Petra said Williamson Diamonds, the owner and operator of the Williamson mine, has now constructed an initial six metre high wall to close the breached area.
Brent oil was quoted at USD86.05 a barrel early Wednesday, up from USD85.06 late Tuesday. Gold fetched USD1,761.50 an ounce, up sharply from USD1,753.25.
By Heather Rydings; [email protected]
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