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LONDON MARKET OPEN: Stocks shaky ahead of US CPI data, ECB decision

9th Apr 2024 08:44

(Alliance News) - Stock prices in London opened mostly lower on Tuesday, as investors look ahead to a key inflation reading from the US, as well as the latest interest rate decision from the European Central Bank.

The FTSE 100 index opened down 3.23 points at 7,940.24. The FTSE 250 was down 45.31 points, 0.2%, at 19,809.27, and the AIM All-Share was up 0.52 of a points, 0.1%, at 749.35.

The Cboe UK 100 was down slightly at 794.06, the Cboe UK 250 was down 0.3% at 17,241.24, and the Cboe Small Companies was down 0.2% at 14,668.77.

In European equities on Tuesday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.4%.

In the US on Monday, stocks stood still as investors awaited inflation figures on Wednesday that will likely dictate whether rate cuts in the first half of 2024 are feasible or not.

The Dow Jones Industrial Average and the S&P 500 closed down slightly, while the Nasdaq Composite closed up slightly.

On Wednesday, US consumer prices figures are due followed on Thursday by wholesale prices data. The reports come in the wake of blow-out non-farm payrolls numbers on Friday which tilted the balance against an interest rate cut in June.

"Ahead of tomorrow's US CPI inflation release, financial markets have trimmed their expectations for the number of Fed rate cuts this year and only 2 are fully discounted. That has had knock-on impact on expectations for other central banks including the Bank of England," analysts at Lloyds said.

Meanwhile, the European Central Bank announces its latest interest rate decision on Thursday. It is expected to leave rates unmoved, but focus will be on any clues on rate cut timing.

So far on Tuesday, investors have had UK retail sales data to digest.

Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to the British Retail Consortium-KPMG retail sales monitor.

BRC Chief Executive Helen Dickinson said: "After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.

"A strong retail industry can boost investment across our towns and cities, and as we gear up for a general election, it is essential the next government recognises this and rethinks the burdensome costs imposed on retailers."

The pound was quoted at USD1.2656 early on Tuesday in London, higher compared to USD1.2652 at the equities close on Monday. The euro stood at USD1.0855, flat against USD1.0854. Against the yen, the dollar was trading at JPY151.90, up compared to JPY151.82.

In the FTSE 100, BP rose 0.9%, after the oil firm updated markets on its first quarter of 2024.

It said upstream production in the first quarter is expected to be higher compared to the prior quarter, with output higher in oil production & operations and slightly higher in gas & low carbon energy.

For the whole year, BP expects reported and underlying upstream production to be "slightly higher" than 2023, of which Oil production & operations higher and Gas & low carbon energy lower.

HSBC edged up 0.4%.

HSBC said it has agreed to sell its business in Argentina, HSBC Latin America, for USD550 million. The lender has sold the subsidiary to Grupo Financiero Galicia, the "largest" private financial group in Argentina.

Chief Executive Noel Quinn said: "We are pleased to agree the sale of HSBC Argentina. This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network. HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network. Furthermore, given its size, it also generates substantial earnings volatility for the group when its results are translated into US dollars."

In the FTSE 250, JTC edged up 2.0%.

JTC reported that in 2023 revenue climbed 29% to GBP257.4 million from GBP200.0 million a year earlier. However, pretax profit fell 33% to GBP24.3 million from GBP35.9 million.

On the back of the results, JTC upped its dividend by 12% to 11.17p from 9.98p.

Amongst London's small caps, ProCook jumped 7.4%.

The company reported results for its fourth quarter, ended March 31.

Revenue in the quarter edged up 4.8% annually to GBP13.2 million. It said its results outperformed the UK kitchenware market by around 2%.

"Despite the market remaining subdued, we are gaining share giving us confidence that our proposition continues to resonate with consumers. We look forward to delivering further strategic progress as we continue to build an even stronger customer-focused business which will allow us to accelerate profitable growth as trading conditions improve," said CEO Lee Tappenden.

Brent oil was quoted at USD90.51 a barrel early in London on Tuesday, up from USD89.93 late Monday.

Gold was quoted at USD2,345.55 an ounce, higher against USD2,330.93. Gold hit a new record high on Monday, above USD2,350 per ounce before easing back.

In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 1.1%. In China, the Shanghai Composite was closed up slightly, while the Hang Seng index in Hong Kong was up 0.7%. The S&P/ASX 200 in Sydney closed up 0.5%.

Still to come on Tuesday economic calendar, there is industrial production data from Ireland at 1100 BST.

By Sophie Rose, Alliance News senior reporter

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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