1st Jun 2023 09:26
(Alliance News) - Stock prices in London opened higher on Thursday, after the US House of Representatives approved a package of measures to raise the government debt ceiling and make budget cuts.
The FTSE 100 index opened up 39.34 points, 0.5%, at 7,485.48. The FTSE 250 was up 44.51 points, 0.2%, at 18,767.41, and the AIM All-Share was up 1.82 points, 0.2%, at 44.51.
The Cboe UK 100 was up 0.5% at 747.27 and the Cboe UK 250 was up 0.2% at 16,322.21, whilst the Cboe Small Companies was down 0.1% at 13,539.88.
The US House approved the debt ceiling and budget cuts package agreed between President Joe Biden and Speaker Kevin McCarthy. With the vote of 314-117, the bill now heads to the Senate with passage expected by the weekend.
"The US House cleared the debt limit bill despite critics both sides. With the bill now headed to the Senate, it's almost certain that it will get approved before the June 5 deadline," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
"One would've expected a relief rally on the back of the news that the debt ceiling crisis is almost over, but the stock markets gave a muted reaction."
New York closed lower on Wednesday. The Dow Jones Industrial Average was down 0.4%, and both the S&P 500 and Nasdaq Composite were down 0.6%.
The annual decline in UK house prices sped up in May, according to new data from mortgage lender Nationwide on Thursday.
On a seasonally adjusted basis, May saw a 0.1% month-on-month fall in house prices. In April, on the same basis, house prices had inched up by 0.4%. On an annual basis, house prices declined by 3.4% in May, accelerating from a fall of 2.7% in April.
Nationwide Chief Economist Robert Gardner said: "Recent Bank of England data had shown some signs of recovery in housing market activity, although the number of mortgages approved for house purchase in March was still around 20% below pre-pandemic levels. Moreover, headwinds to the housing market look set to strengthen in the near term. While consumer price inflation did slow in April, it was a much smaller decline than most analysts had expected."
London-listed housebuilders were marginally higher following the data. Taylor Wimpey was up 0.2%, Berkeley Group up 0.4% and Barratt Developments up 0.2%.
Commercial property developer British Land was down 0.1%.
After the market close on Wednesday, index publisher FTSE Russell said British Land will drop down to the FTSE 250 from the FTSE 100, effective from June 5, following its quarterly index review.
Engineering firm IMI will replace British Land in the FTSE 100. It was up 0.9% early Thursday.
In the FTSE 100, Auto Trader lost 2.4%.
Auto Trader said revenue in the financial year that ended March 31 rose 16% to GBP500.2 million from GBP432.7 million the year before. Pretax profit, however, slipped to GBP293.6 million from GBP301.0 million.
The company proposed a final dividend of 5.6p per share, up from 5.5p, bringing the total dividend to 8.4p, up from 8.2p.
Auto Trader named Matt Davies as its chair designate. Incumbent Ed Williams will come to the end of his third three-year term in 2024.
Davies will join the board on July 1 and will succeed Williams as chair at the conclusions of Auto Trader's annual general meeting on September 14. Davies is currently chair at bakery chain Greggs, where he was appointed in August 2022. He was previously chief executive of Pets at Home, Halfords and Tesco.
In the FTSE 250, Dr Martens shed 11%.
Dr Martens said revenue in the financial year that ended March 31 rose to GBP1.00 billion, up 10% from GBP908.3 million the year before. However, pretax profit fell to GBP159.4 million from GBP214.3 million.
The boot maker explained that profit was hurt by lower earnings before interest, tax, depreciation, and amortisation, increased depreciation from system investments, new stores and DC expansion, a GBP3.9 million impairment charge, and a GBP10.7 million charge from the FX translation impact on its Euro bank debt.
The company maintained its final dividend of 4.28p per share, bringing the full-year dividend to 5.84p, up 6% year-on-year.
"These full year results suggest a case of one step forward, two steps back for the UK-based boot maker. For the first time, 2023 saw the company reach a revenue milestone of GBP1 billion; yet with PBT down 26% from last year, this symbolic achievement is unlikely to do much by way of encouraging investors, when considered beside the not-so-symbolic drop in profit," said Neil Shah, director of Content & Strategy at Edison Group.
On AIM, Westminster Group surged 45%.
In 2022, the provider of security services said revenue rose to GBP9.5 million from GBP7.1 million in 2021, and pretax loss narrowed to GBP365,000 from GBP1.9 million.
Looking ahead, Westminster said it expects 2023 to be "a record year", after beginning it on a positive note.
In Asia on Thursday, the Nikkei 225 index in Tokyo closed up 0.8%. In China, the Shanghai Composite and the Hang Seng index in Hong Kong was both closed flat. The S&P/ASX 200 in Sydney closed up 0.3%.
In European equities on Thursday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.9%.
The pound was quoted at USD1.2412 early on Thursday in London, up compared to USD1.2381 at the equities close on Wednesday. The euro stood at USD1.0666, up against USD1.0657. Against the yen, the dollar was trading at JPY139.93, up compared to JPY139.83.
Brent oil was quoted at USD72.83 a barrel early in London on Thursday, down from USD73.07 late Wednesday.
Gold was sharply lower, as a US debt default looked increasingly unlikely. It was quoted at USD1,955.23 an ounce early Thursday, down against USD1,971.75 late Wednesday.
The economic calendar has EU unemployment and inflation figures at 1000 BST, before the European Central Bank releases its latest meeting minutes at midday. There is also manufacturing PMI prints from the UK and the US.
By Sophie Rose, Alliance News reporter
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