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LONDON MARKET OPEN: FTSE 100 hits another record as eyes turn to Fed
Stocks in London rose to a record high on Monday morning, as market attention moves to the US Federal Reserve interest rate decision due on Wednesday.
The FTSE 100 index rose 40.03 points, 0.5%, at 8,179.86. It had climbed to 8,185.59 shortly after the opening bell, its best-ever level.
The FTSE 250 was up 42.62 points, 0.2%, at 19,866.78, and the AIM All-Share was up 2.45 points, 0.3%, at 757.73.
The Cboe UK 100 was up 0.4% at 816.86, the Cboe UK 250 added 0.2% to 17,160.06, and the Cboe Small Companies was up 0.1% at 15,642.45.
In European equities on Monday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.2%.
In China, the Shanghai Composite ended up 0.8%, while the Hang Seng index in Hong Kong traded 0.5% higher in late dealings. The S&P/ASX 200 in Sydney rose 0.8%. Financial markets in Tokyo were closed for the Showa Day public holiday.
In New York on Friday, the Dow Jones Industrial Average closed up 0.4%, the S&P 500 up 1.0% and the Nasdaq Composite jumped 2.0%.
‘The S&P500 record its best performance since October 2023. Yes, the S&P500 gained nearly 3% last week, while Nasdaq 100 gained more than that, as last week’s sour combo of slowing US growth but rising inflation was offset by the better-than-expected earnings from Microsoft and Google, and a surprise jump in Tesla shares despite earnings miss,’ Swissquote analyst Ipek Ozkardeskaya commented.
‘Zooming out, Friday’s higher-than-expected core PCE print didn’t weigh much on investor sentiment, as most of the price action due to the inflation disappointment happened after Thursday’s GDP report.’
The Federal Reserve announces an interest rate decision on Wednesday. It is expected to leave rates unmoved, but with recent inflation readings coming in hot, and words from policymakers hawkish, focus will be on what Chair Powell has to say.
The pound was quoted at $1.2532 early Monday, up markedly from $1.2453 at the time of the London equities close on Friday. The euro stood at $1.0724, climbing from $1.0676. Against the yen, the dollar was trading at JP¥154.89, down sharply from JP¥157.41 on Friday, but after rising to another multi-decade high of JP¥160.14 earlier Monday.
ING analysts commented: ‘While not yet official, there are strong indications that Japan intervened in the FX market this morning after USD/JPY touched 160.0. If we follow the same script as 22 September 2022, USD/JPY should remain volatile throughout the session before stabilising around 156-157.’
In London, Prudential rose 2.8%, among the best FTSE 100 performers. It rose in a positive read across after Hong Kong-based life insurance and pensions company AIA Group upped its share buyback programme to $12.0 billion from $10.0 billion, and reported a double-digit percentage rise in new business and annualised new premiums in the first quarter of 2024.
AIA shares traded 6.1% higher in late dealings in Hong Kong.
Still getting a boost from M&A and lofty commodity prices, miner Anglo American added 1.7%.
Shares had jumped over 20% last week, supported by news that larger peer BHP has sized up a bid. Anglo American was the star performer last week on a FTSE 100 that is finding favour again.
The FTSE 100 climbed over 3% last week and is up just under 6% since the end of 2023.
Hipgnosis Songs Fund added 2.3% to 106.20 pence. It backed a $1.57 billion takeover offer from Blackstone, trumping a previous offer from Concord.
Blackstone will pay $1.30 in cash for each share in the music investment company, around 104 pence. It is a premium of 4.0% to Concord’s $1.51 billion offer. Concord had raised its bid from $1.40 billion last week, in a bid to thwart Blackstone.
HSF no longer recommends that new Concord offer. Concord sweetened its bid after HSF earlier in April noted Blackstone was mulling a $1.50 billion offer.
Hipgnosis Chair Robert Naylor said: ‘Since we started our strategic review, we have been clearly focused on looking at all the options to deliver shareholder value. We are delighted that, following competitive interests in acquiring Hipgnosis, our investors now have a chance to immediately realise their holding at an increased premium.’
Elementis rose 1.8% after a shareholder called on the chemicals company to make itself ‘more attractive for a strategic buyer’.
Gatemore Capital Management called on Elementis to ‘accelerate and confirm the details’ on cost-savings, replace its current chief executive and conduct a strategic review.
Elsewhere in London, fire safety and heat management product developer Zenova jumped 25%. It received a £2.4 million order for its FP fire protection coating from sprayer group Drips & Sparks. The offering will be used on steel surfaces at Gracewood Construction project sites in the UK.
Brent oil was quoted at $87.40 a barrel early Monday, down from $88.26 late Friday. Gold was quoted at $2,337.01 an ounce, up from the $2,333.37 it bought at the time of the London equities close Friday.
Monday’s economic calendar has a German inflation reading at 1300 BST.
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