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LONDON MARKET OPEN: London stocks tread water with US data to come

14th Mar 2024 09:03

(Alliance News) - Stocks in London barely budged after the opening bell on Thursday, after a largely softer session in New York overnight, as eyes turn to a batch of US data and what it can mean for Federal Reserve interest rates.

There will be a customary update on the jobs market, through the initial jobless claims reading at 1230 GMT, as well as an insight into the health of the consumer, with retail sales data. In addition, the latest producer price reading is reported shortly after midday.

The FTSE 100 index rose just 2.97 points to 7,775.14. The FTSE 250 climbed only 4.07 points to 19,567.99, and the AIM All-Share fell 0.17 of a point to 738.65.

The Cboe UK 100 was flat at 778.75, the Cboe UK 250 added 0.1% at 16,945.12, and the Cboe Small Companies was largely unmoved at 14,711.94.

In European equities on Thursday, the CAC 40 in Paris surged 0.8%, while DAX 40 in Frankfurt rose 0.2%.

In New York, the Dow Jones Industrial Average closed up 0.1% on Wednesday. The S&P 500 lost 0.2% and the Nasdaq Composite fell 0.5%.

The pound was quoted at USD1.2806 early Thursday, up from USD1.2798 at the London equities close on Wednesday. The euro stood at USD1.0937, down from USD1.0945. Against the yen, the dollar was trading at JPY147.90, up from JPY147.70.

The US factory gate inflation numbers are expected to show the pace of year-on-year producer price growth picked up to 1.1% on in February, according to FXStreet cited consensus, from 0.9% in January.

Retail sales are expected to have risen 0.8% on month in February, following a 0.8% fall in January from December.

Initial jobless claims are expected to be largely at 218,000 from the prior week's 217,000.

"Overall, we expect the US inflation and activity data to support a delay in the first Fed cut until the middle of the year," analysts at Lloyds Banking Group commented.

"Remarks from ECB speakers today will be very carefully listened to. A first rate cut in April has not been completely ruled out, but indications are that June will be the likelier option. That would provide policymakers with more information about the economy, including Q1 wage data."

ECB executive board members Isabel Schnabel and Luis de Guindos speak at 1100 GMT and 1800 GMT, respectively.

In London, OSB Group tumbled 19% on poorly-received earnings, though it declared a GBP50 million share buyback.

OSB, which stands for OneSavingsBank, said pretax profit in 2023 was 30% lower at GBP374.3 million, from GBP531.5 million in 2022. Total income fell 15% to GBP658.1 million from GBP775.4 million. Hurting its total income, it reported a GBP4.4 million fair value loss on financial instruments, contrasting with a GBP58.9 million gain in 2022. Net interest income alone fell 7.2% to GBP658.6 million in 2023.

The lender in July warned its results would be hurt by customers acting more quickly than expected to refinance their mortgages at favourable rates.

OSB declared a 21.8 pence per share final dividend, unmoved from the year prior. Its total dividend was boosted by 4.9% to 32.0p from 30.5p.

"We have also announced a new GBP50 million share buyback over the next six months and the board will consider additional shareholder returns later in the year," it added.

Further, Chief Financial Officer April Talintyre will not be seeking re-election at the annual general meeting on May 9 and will also retire as executive director that day. Deputy CFO Victoria Hyde will serve as acting CFO until the company finds a new permanent CFO.

Looking to 2024, it does not expect to deliver growth in its underlying net interest margin, which fell to 2.51% in 2023 from 3.03% in 2022. The statutory NIM had fallen to 2.31% last year from 2.78%.

The predicted NIM outcome for 2024 reflects "impact of a higher cost of funds and the full year impact of some lower margin lending in 2023".

Shining on the FTSE 250, however, Trainline added 12%. The rail ticket selling platform said it "outperformed expectations" in its recently-ended financial year.

It said revenue in the year to February 29 rose 21% to GBP397 million from GBP327 million. It had guided for a rise between 15% and 20%. Net ticket sales were 22% higher at GBP5.30 billion, at the top end of its growth outlook range.

Chief Executive Jody Ford said: "Trainline is a home-grown British tech success that has scaled beyond domestic borders to become Europe's most downloaded rail app. We outperformed expectations this year, growing strongly in the UK and across the continent, with International Consumer net ticket sales of more than GBP1 billion."

It was a mixed bag among London-listed large-caps. Diageo rose 1.5% after Kepler raised the brewer to 'buy' from 'hold'. NatWest fell 4.6% as the lender struggled in a negative read across following OSB's report.

Elsewhere, lateral flow test contract development and manufacturing company Abingdon Health painted an optimistic picture. Its shares jumped 27%.

Revenue for the six months to December 31 jumped to GBP2.4 million from GBP1.1 million a year prior. Its pretax loss narrowed to GBP1.2 million from GBP2.4 million.

"The board remains confident of achieving material revenue growth for FY24 compared to FY23, with revenues in H2 2024 also being materially ahead of H1 2024," it said.

In Tokyo on Thursday, the Nikkei 225 closed up 0.3%. The S&P/ASX 200 in Sydney lost 0.2%. The Shanghai Composite closed down 0.2%, while the Hang Seng in Hong Kong ended 0.7% lower.

Gold was quoted at USD2,168.68 an ounce early Thursday, down from USD2,173.55 at the time of the London equities close on Wednesday. Brent oil was quoted at USD84.53 a barrel, climbing from USD83.50.

"Amidst a growing escalation of tensions, Ukraine has carried out drone attacks on Russian oil refineries, triggering a confrontation between the two nations. The largest Rosneft refinery was one of the primary targets in these attacks, resulting in fires and significant damage to the facilities. These acts have affected production and fuel supply in Russia and heightened the already tense relations between both countries," XS.com analyst Antonio Ernesto Di Giacomo commented.

By Eric Cunha, Alliance News news editor

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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