17th Feb 2022 08:47
(Alliance News) - Stock prices in London were mostly lower early Thursday, with the pace of the US Federal Reserve's monetary policy tightening in focus, after minutes from the most recent meeting suggested interest rates could be hiked faster than initially thought.
In addition, the situation on Ukraine border remained tense, as the US cast doubt on Russia's claims of a troop withdrawal. US Secretary of State Antony Blinken called the threat of an invasion "real" and reiterated Washington's call for Russia to de-escalate the situation.
"With the Russians saying one thing, and NATO and the US pushing back, saying that Russian troop numbers are rising near the Ukraine border, and that no de-escalation appears to be happening, markets are increasingly becoming susceptible to headline risk. This means the phoney war is likely to continue until such time as Russia either de-escalates or decides to push into Ukraine," CMC Markets analyst Michael Hewson commented.
The FTSE 100 index was down 24.51 points, or 0.3%, at 7,579.27. The mid-cap FTSE 250 index was down 31.69 points, or 0.2%, at 21,797.25. The AIM All-Share index was up 0.89 of a point, or 0.1%, at 1,080.06.
The Cboe UK 100 index was down 0.3% at 752.26. The Cboe 250 was down 0.2% at 19,479.41, and the Cboe Small Companies was flat at 15,562.12.
In mainland Europe, the CAC 40 in Paris and DAX 40 in Frankfurt climbed 0.2%.
The dollar was weaker early Thursday.
The pound was quoted at USD1.3583, up from USD1.3577 at the London equities close on Wednesday. The euro stood at USD1.1367, down from USD1.1367. Against the Japanese yen, the dollar was trading at JPY115.11, down from JPY115.48.
Fed policymakers envisage a faster pace of US interest rate increases during the course of 2022, according to minutes from January's meeting released Wednesday.
At the January 25 to 26 meeting, minutes showed members of the Federal Open Market Committee thought "a faster pace of increases...would likely be warranted" compared to the prior tightening cycle.
Swiss quote analyst Ipek Ozkardeskaya commented: "Even though the FOMC minutes were as hawkish as expected, there was no surprise for investors who already knew that inflation is a serious problem in the US, and requires a steeper rate normalization policy and a potentially aggressive unwind of the Fed's portfolio holdings."
In Asia on Thursday, the Nikkei 225 in Tokyo fell 0.8%, though the S&P/ASX 200 in Sydney rose 0.2%. The Shanghai Composite closed 0.1% higher, and the Hang Seng in Hong Kong ended 0.3% higher.
In London, Evraz shares fell 4.9%, as fears of a Russian invasion of Ukraine persist. The steel maker largely operates in Russia and oligarch Roman Abramovich has roughly a 29% stake in the company.
Standard Chartered fell 3.6%. It reported pretax profit for 2021 of USD3.35 billion, more than doubled from USD1.61 billion a year prior, but missing analyst expectations of USD3.84 billion by 13%.
The emerging markets-focused lender said net interest income slipped 0.7% to USD6.80 billion from USD6.85 billion as low interest rates scuppered growth. The figure beat the USD6.78 billion analyst consensus.
StanChart missed analyst forecasts for dividends, having proposed a final dividend of 9 US cents per share. This matched 2020's final dividend, when 9 cents was the maximum allowed under regulatory guidance at the time. It brought StanChart's total annual payout to 12 cents, up 33% on the prior year's 9 cents.
At the other end of London's blue-chip index, Reckitt Benckiser climbed 3.9%.
The company said its annual results topped expectations and added that it has made a promising start to the flu season, which customarily sees high demand for some its products such as throat lozenges maker Strepsils.
The previous flu season was more muted for Reckitt, as lockdown curbs meant "very low incidences of cold & flu in 2020".
Hygiene and household goods firm Reckitt said revenue in 2021, lapping tough comparatives, fell 5.4% to GBP13.23 billion from GBP13.99 billion. At constant currency, the decline was 0.3%. Revenue topped company-compiled consensus of GBP13.18 billion, however.
Excluding the contribution of its former Infant Formula & Child Nutrition business in China, Reckitt's annual revenue fell 2.1% to GBP12.85 billion from GBP13.13 billion.
In the fourth quarter alone, like-for-like net revenue increased 3.3%.
Reckitt explained: "Our Health business saw strong growth of 18% led by growth of over 40% in our [over-the-counter] portfolio, with a strong start to the 'flu season, a continued strong performance from our Intimate Wellness portfolio and stabilisation in Dettol."
Looking to 2022, Reckitt targets like-for-like net revenue growth between 1% and 4%.
"We are targeting growth in adjusted operating margins in 2022, from our base of 22.9%, underpinned by multiple levers, despite significant commodity inflationary pressures," it added.
There was also a warning of inflation-induced price hikes. The firm said it will "apply appropriate pricing" in order to offset inflation pressures.
On AIM, Unbound Group rose 13%. The company formerly known as Electra Private Equity updated on annual fortunes at its Hotter Shoes subsidiary.
Hotter's revenue advanced 10% annually in the fourth quarter that ended January 30. Annual revenue increased 16% to GBP51.9 million from GBP44.5 million, shaking off "significant challenges" hitting the UK retail sector.
In addition, Unbound said Hotter has teamed with retailer Marks & Spencer, selling its products through the UK retailer's 'Brands at M&S' platform.
"This follows agreements with other retailers including John Lewis, Next and The Very Group to sell Hotter products online," Unbound added.
Brent oil was quoted at USD94.10 a barrel, down from USD96.00 at the London equities close on Wednesday.
Gold rose to USD1,882.84 an ounce from USD1,862.20. Gold drew close to the USD1,900 an ounce mark, a threshold it has not surpassed since June.
By Eric Cunha; [email protected]
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