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LONDON MARKET CLOSE: London stocks a mixed bag ahead of Fed decision
London stocks were mixed at the closing bell, a few hours before the evening’s long-awaited interest rate decision from the Federal Reserve, with Haleon hampering the FTSE 100 and a poor performance from Aston Martin dragging down the FTSE 250.
The FTSE 100 index closed down 22.89 points, 0.3%, at 8,121.24. The FTSE 250 ended down 38.80 points, 0.2%, at 19,926.59, and the AIM All-Share closed up 4.24 points, 0.6%, at 764.98.
The Cboe UK 100 ended down 0.3% at 811.07, the Cboe UK 250 closed down 0.4% at 17,230.04, and the Cboe Small Companies ended up 0.2% at 15,762.48.
Financial markets in Paris and Frankfurt are closed on Wednesday.
The Fed announces its latest interest rate decision at 1900 BST. A press conference with Chair Jerome Powell follows half an hour later.
‘It’s decision day on interest rates in the US and while the Federal Reserve is almost certain to stick with the status quo, there will be considerable interest in the accompanying commentary. Will markets have to get used to the idea of zero cuts in 2024, having started the year with hopes for rates to be materially lowered?’ said AJ Bell’s Russ Mould.
Before the Fed decision, there has been a flurry of US data.
The US private sector added more jobs than expected last month, numbers from payroll firm ADP showed.
According to the latest ADP tracker, private employers added 192,000 jobs in April, rising from 184,000 in March. The March reading was downwardly revised from an initially reported 208,000. The latest reading beat the FXStreet cited consensus of 175,000.
The US manufacturing sector was stable in April, purchasing managers’ index survey results from S&P Global confirmed on Wednesday, but data from the Institute for Supply Management showed the sector fell into contraction.
The S&P Global US manufacturing PMI posted in line with the 50.0 no-change mark in April to point to stable business conditions at the start of the second quarter. The reading was down from 51.9 in March and signalled an end to a three-month sequence of improving operating conditions.
The ISM PMI reported that economic activity in the manufacturing sector contracted in April after one month of expansion following 16 consecutive months of contraction.
The ISM PMI for manufacturing reading slipped to 49.2 points in April from 50.3 in March.
Stocks in New York were mixed at the London equities close. The DJIA was up 0.2%, though the S&P 500 index and Nasdaq Composite were down 0.4% and 0.5%, respectively.
The pound was quoted at $1.2487 at the London equities close Wednesday, down compared to $1.2523 at the close on Tuesday. The euro stood at $1.0679 at the European equities close Wednesday, lower against $1.0690 at the same time on Tuesday.
Against the yen, the dollar was trading at JP¥157.72, up compared to JP¥157.44 late Tuesday.
In the FTSE 100, Haleon lost 3.1%.
The Surrey, England-based consumer health arm, spun out of GSK PLC, backed its annual guidance and reported a ‘solid’ quarter.
Revenue declined 2.2% on-year to £2.92 billion in the three months that ended March 31, as revenue for Haleon’s Pain Relief and Respiratory Health units fell amid a weaker Covid season in China compared to a year ago.
Cost of sales were reduced by 5.7% to £1.08 billion from £1.15 billion, helping pretax profit to grow by 8.9% to £590 million from £542 million.
On the other hand, GSK rose 1.6%.
The London-based pharmaceutical maker said revenue in the first-quarter of the year was up 5.9% to £7.36 billion from £6.95 billion a year prior.
Pretax profit, however, weakened 29% to £1.36 billion from £1.91 billion.
In the FTSE 250, Aston Martin lost 6.8%, after a disappointing trading update.
The company reported 945 vehicle sales in the first quarter, down 26% from 1,269 a year before.
Pretax loss widened 87% to £138.8 million from £74.2 million.
Executive Chair Lawrence Stroll said: ‘2024 is a year of immense product transformation at Aston Martin, with the introduction of four new models to the market before the end of the year. Our first quarter performance reflects this expected period of transition, as we ceased production and delivery of our outgoing core models ahead of the ramp up in production of the new Vantage, upgraded DBX707 and our upcoming V12 flagship sports car which we’ve confirmed today. As part of our ongoing programme of ultra-exclusive models, we will deliver a new Special in the fourth quarter of the year.’
On AIM, Trinity Exploration & Production rose 53%. Touchstone Exploration shares fell 4.5%.
Touchstone Exploration said it reached an agreement to buy Trinity Exploration & Production.
The Trinidad & Tobago-focused oil exploration and production companies aim to become ‘a leading Trinidadian operator of scale,’ according to Touchstone, which calls itself the largest independent onshore oil and natural gas producer in Trinidad.
The all-share agreement values Trinity at £24.1 million.
Brent oil was quoted at $83.78 a barrel at the London equities close Wednesday, down from $86.42 late Tuesday.
Gold was quoted at $2,308.30 an ounce at the London equities close Wednesday, up against $2,298.10 at the close on Tuesday.
In Thursday’s UK corporate calendar, has first quarter results from Endeavour Mining, Shell, and Standard Chartered.
The economic calendar for Thursday has manufacturing PMIs from Germany and the eurozone. At 1330 BST, there is the weekly US initial jobless claims, as well as trade balance data.
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