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LONDON MARKET CLOSE: FTSE 100 hits another record high before BoE
London’s FTSE 100 extended its winning streak to four days on Wednesday, while the pound fell below the $1.25 mark before Thursday’s Bank of England decision.
The FTSE 100 index closed up 40.38 points, 0.5%, at 8,354.05, once again a record close. The FTSE 250 ended up 78.91 points, 0.4%, at 20,491.99, and the AIM All-Share closed up 3.41 points, 0.4%, at 779.83.
The Cboe UK 100 rose 0.4% at 833.82, the Cboe UK 250 added 0.5% at 17,748.81, and the Cboe Small Companies rose 0.8% to 15,999.21.
In European equities on Wednesday, the CAC 40 in Paris climbed 0.7%, while the DAX 40 in Frankfurt added 0.4%.
In New York, the Dow Jones Industrial Average was up 0.2% at the time of the London equities close. The S&P 500 was 0.1% lower, while the Nasdaq Composite lost 0.2%.
‘The market appears to be positioning for a dovish tilt from the BOE ahead of Thursday. GBP/USD is below the $1.25 handle, 10-year UK Gilt yields have fallen by 15 basis points in the past week, and 2-year yields are lower by 20 basis points in the past week. The FTSE 100, which tends to move inversely to the pound, reached another record high on Tuesday, and has outperformed European and US indices in the past month. The FTSE 250, which is a more domestically focused index, has tracked the FTSE 100, as it benefits from the prospect of lower borrowing costs in the UK,’ XTB analyst Kathleen Brooks commented.
‘Recent speeches from [Monetary Policy Committee] members suggest that there remains a range of views at the bank, but that there could be the start of a tilt towards a loosening bias. For example, Jonathan Haskel, who voted for a rate hike earlier this year, said that the timing of a rate cut will depend on the vacancies to unemployment rate, which is 30% down from its peak. He also said that inflation expectations remain well anchored, which suggests that he has shifted his hawkish stance. Andrew Bailey, the governor of the Bank of England, has said that the UK is going through a dis-flating process at full employment, and that this will continue. New member Megan Greene and Huw Pill who have said that the bigger risk could be cutting rates too early only to hike them again down the line. Interestingly, no recent speech from a BoE member has spoken about high levels of inflation, or the prospect of more immediate rate hikes.’
Sterling was quoted at $1.2495 at the time of the London equities close on Wednesday, lower than $1.2542 on Tuesday. The euro traded at $1.0749, lower than $1.0774 late Tuesday. Against the yen, the dollar rose to JP¥155.55 from JP¥154.49.
Thursday’s economic calendar has the Bank of England decision at midday, before the latest US initial jobless claims reading at 1330 BST.
In London, British Airways parent International Consolidated Airlines Group added 3.7%, while easyJet climbed 2.9%. The duo struggled on Tuesday after Ryanair’s boss warned on summer fare pricing.
Informa rose 2.3%, after it increased its share buyback programme for 2024 by 50% to £500 million.
In a market update, the business information publisher and events organiser said all business were delivering ahead of or in line with annual targets.
Informa expects 2024 revenue will be at the upper end of its £3.45 billion to £3.50 billion guidance range, while adjusted operating profit is expected to be at the upper end of £950 million to £970 million guidance range.
Among London’s mid-caps, John Wood Group jumped 17%. The consulting and engineering firm for energy and materials sectors rejected a fresh takeover attempt.
John Wood said it had received an ‘unsolicited, preliminary and conditional’ proposal from Dar Al-Handasah Consultants Shair and Partners Holdings Ltd, Sidara, regarding a possible cash offer.
Sidara is a family-owned engineering company, founded in Beirut, with more than 300 offices in 60 countries.
The proposal, received last Tuesday, valued each John Wood share at 205p each, around £1.41 billion in total.
John Wood concluded that it ‘fundamentally undervalued Wood and its future prospects,’ and rejected the proposal unanimously on Wednesday.
Renishaw gave back 4.2%. It said revenue in the third quarter improved upon the first two quarters of its financial year, but nine-month revenue and profit were both down on a year before.
The provider of manufacturing technologies, analytical instruments and medical devices lowered its full-year guidance in response.
Renishaw said it expects full-year revenue in the range of £680 million to £700 million, narrowed and mostly lower compared to previous guidance of £675 million to £715 million. It expects adjusted pretax profit in the range of £122 million to £135 million, down from previous guidance of £122 million to £147 million.
Among London’s small caps, STV rose 2.0%, after the broadcast television channel operator and content studio said BBC Daytime has commissioned new series of antiques programmes ’Antiques Road Trip’, ’Celebrity Antiques Road Trip’ and ’The Travelling Auctioneers’ from production company STV Studios, in an order totalling 56 episodes.
STV said production has already begun on a third 20-episode series of The Travelling Auctioneers.
Brent oil was trading at $83.48 a barrel late Wednesday afternoon, largely unmoved from $83.51 late Tuesday. Gold was quoted at $2,317.69 an ounce, lower than $2,322.59.
Thursday’s local corporate calendar has a trading statement from broadcaster ITV and Paddy Power owner Flutter Entertainment.
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