30th Jan 2025 08:49
(Alliance News) - Stock prices in London opened higher on Thursday, despite what was considered a "hawkish hold" by the Federal Reserve overnight, ahead of an expected rate cut by the European Central Bank.
The FTSE 100 index added 11.86 points, 0.1%, at 8,569.67. The FTSE 250 was up 135.96 points, 0.7%, at 20,695.66, and the AIM All-Share added 3.13 of a point, 0.4%, at 715.32.
The Cboe UK 100 was up 0.2% at 859.46, the Cboe UK 250 rose 0.7% to 18,108.24, and the Cboe Small Companies was up 0.1% at 16,032.46.
In Frankfurt, the DAX 40 rose 0.3% in early trade, while the CAC 40 added 0.4%.
The pound traded at USD1.2448 early Wednesday, up from USD1.2435 late Tuesday. The euro edged up to USD1.0423 from USD1.0419. Against the yen, the dollar slipped to JPY154.59 from JPY155.08.
A barrel of Brent declined to USD75.29 from USD77.21. An ounce of gold rose to USD2,773.22 an ounce from USD2,752.18.
In New York on Wednesday, the Dow Jones Industrial Average lost 0.3%, while the S&P 500 and Nasdaq Composite shed 0.5%.
Federal Reserve Chair Jerome Powell on Wednesday said things are in a "really good place for policy and the economy," stressing there is no rush to make adjustments to policy.
"We do not need to be in a hurry to adjust our policy stance," he told reporters.
Powell said he thought the central bank's policy stance was "very well calibrated" to balance the achievement of its two goals of maximum employment and price stability.
The Fed Chair was speaking after the Federal Reserve left interest rates unchanged highlighting solid economic growth and "somewhat elevated" inflation.
The Federal Open Market Committee's as expected decision leaves the federal funds rate range at 4.25%-4.50%. The vote was unanimous.
Analysts at ING commented: "Robust activity, a solid jobs market and sticky inflation justify the Fed's decision to hold interest rates steady. The hawkish tilt from officials may in part be a message to President Trump that they won't bow to his will on interest rates and suggests a clear and unambiguous weakening in the data is required to prompt further action. We think it will come, but not before June."
The ECB takes centre-stage on Thursday. It announces a decision at 1315 GMT. It is expected to cut by 25 basis points. A press conference with President Christine Lagarde follows around 1345 GMT.
Analysts at Lloyds Bank commented: "The improvement in the Eurozone PMIs shouldn’t distract the ECB from what remains a challenging economic situation. Growth is effectively flatlining and the traditional engine economy – Germany – remains stuck in a structural rut and further hemmed in by political paralysis. That might not be resolved by looming elections. "
In Tokyo, the Nikkei 225 ended up 0.4% in late trade, while Sydney's S&P/ASX 200 ended 0.6% higher. Financial markets in Hong Kong and Shanghai remained closed.
In London, BT shares fell 4.0%. It reported a rise in third-quarter adjusted earnings before interest, tax, depreciation and amortisation, but its top line shrunk and undershot market expectations.
The telecommunications firm said adjusted revenue in third quarter to December 31 declined 3.0% on-year to GBP5.18 billion from GBP5.34 billion. The figure was shy of the company-compiled consensus of GBP5.24 billion.
Nonetheless, adjusted earnings before interest, tax, depreciation and amortisation rose 3.7% to GBP2.10 billion from GBP2.03 billion. That topped consensus of GBP2.05 billion.
The Ebitda hike was "driven by strong cost transformation and one-off other operating income in the low tens of millions which more than offset adverse revenue".
Reported pretax profit in the third-quarter was 1% higher on-year at GBP427 million, BT said.
Hurting its top line, BT reported "continued challenging non-UK trading conditions in our Global and Portfolio channels". It also said there was "weaker handset" trading in its Consumer arm, which includes the EE brand.
Shell shares rose 0.5% despite an earnings miss. It announced a USD3.5 billion buyback, however.
The oil major's fourth-quarter adjusted earnings were 39% lower on-year at USD3.66 billion, shy of the Vara-cited consensus of USD4.10 billion. Annual adjusted earnings were down 16% at USD23.72 billion, also below the consensus of USD24.11 billion.
Shell upped its fourth-quarter dividend by 4.1% to USD0.3580 per share from USD0.3440. For the whole year, its dividend amounted to USD1.3900, an increase of 7.5% from USD1.2935.
Shell added: "Total shareholder distributions in the quarter amounted to USD5.7 billion comprising repurchases of shares of USD3.6 billion and cash dividends paid to Shell PLC shareholders of USD2.1 billion."
In addition, it announced a new USD3.5 billion share buyback set for completion before its first-quarter results.
Wizz Air plunged 12% as it cut its annual outlook. The budget carrier now expects annual net income between EUR250 million and EUR300 million, the guidance chopped from the EUR350 million and EUR450 million range.
It reported improved third-quarter revenue, but profit took a hit from an ongoing grounding of aircraft due to issues related to Pratt & Whitney's geared turbofan engines.
Wizz Air said its pretax loss in the three months to December 31 stretched to EUR277.6 million from EUR118.4 million a year prior. Revenue increased 11% to EUR1.18 billion from EUR1.06 billion.
Environmental and engineering consulting firm Ricardo shed 18%. Order delays mean its annual outturn will be below consensus.
The phasing of orders hit revenue and profit in its Energy & Environment arm in the first half, which concluded on December 31.
By Eric Cunha, Alliance News news editor
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