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LONDON MARKET OPEN: Stocks up looking ahead to US GDP and PCE data

Investors in London continued to show confidence heading into the afternoon on Wednesday, looking ahead to key US data on Thursday and Friday.

The FTSE 100 index opened up 27.80 points, 0.4%, at 8,072.61. The FTSE 250 was down 2.65 points at 19,797.07, and the AIM All-Share was up 1.63 points, 0.2%, at 756.50.

The Cboe UK 100 was up 0.3% at 806.01, the Cboe UK 250 was down 0.1% at 17147.76, and the Cboe Small Companies was up 0.1% at 15303.54.

In European equities on Wednesday, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was up 0.2%.

London’s FTSE 100 hit its record level of 8,076.52 points on Tuesday, though it slipped as the afternoon wore on.

A slight warning on UK interest rates kept the FTSE 100 in check.

The Bank of England’s chief economist has said interest rate cuts are ‘somewhat closer’ than last month.

However, Huw Pill argued the economic outlook has ‘not changed substantially’ and there are still risks if bank policymakers reduce rates too early.

Investors are now turning their attention to key economic indicators from the US, with gross domestic product data out on Thursday and a personal consumption expenditures reading on Friday.

Friday’s US PCE reading is expected to show the annual core PCE inflation measure, the Fed’s preferred gauge, eased to 2.6% in March from 2.8% in February.

The pound was quoted at $1.2443 early on Wednesday in London, up compared to $1.2440 at the equities close on Tuesday. The euro stood at $1.0694, lower against $1.0699. Against the yen, the dollar was trading at JP¥154.94, higher compared to JP¥154.77.

In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.7%, the S&P 500 up 1.2% and the Nasdaq Composite up 1.6%.

Tesla shot up 13% in after hours trade.

The electric vehicle maker, run by Elon Musk, said GAAP net income tumbled 53% to $1.13 billion in the first three months of 2024, down from $2.51 billion a year prior. Diluted GAAP earnings per share also fell 53% to $0.34 from $0.73.

First quarter revenue slid 8.7% to $21.30 billion from $23.33 billion.

‘Tesla’s Q1 results didn’t look good at all,’ said Ipek Ozkardeskaya at Swissquote Bank.

Yet, Ozkardeskaya said that ‘investors looked past the ugly quarterly results from Tesla’, as they chose to focus on plans to accelerate the launch of new models that include cheaper models.

In the FTSE 100, consumer goods firm Reckitt rose 4.0%.

Reckitt Benckiser reported a strong start to 2024 for its Hygiene business, offsetting a significant decline in Nutrition and allowing the company to maintain its guidance for annual revenue growth. The Slough, England-based consumer goods maker also got some growth from its Health division.

Reckitt reported 1.5% net revenue growth on a like-for-like basis in the first quarter of 2024 from a year before. This was composed of a 0.5% decline in volume that was more than offset by a 2.0% increase from pricing and sales mix.

Lloyds Banking lost 2.8%.

Lloyds said pretax profit came in at £1.63 billion in the first quarter, down 28% from £2.26 billion annually. Net income fell to £4.24 billion, down 9% from £4.65 billion.

Lloyds CET1 ratio fell to 13.9% from 14.1%.

‘The group is continuing to deliver in line with expectations in the first quarter of 2024, with solid net income, cost discipline and strong asset quality. Our performance provides us with further confidence around our strategic ambitions and 2024 and 2026 guidance,’ said Chief Executive Charlie Nunn.

In the FTSE 250, consumer goods firm PZ Cussons jumped 5.9%.

In its third quarter, ended March 2, revenue rose 6.4% on a like-for-like basis to £126.7 million. On a reported basis, however, it was down 24%.

Looking ahead, PZ Cussons reiterated full year guidance. It expects full-year adjusted operating profit, at reported rates of exchange, to be in the range of £55 million to £60 million.

On AIM, Filtronic shot up 46%.

The company said that revenue in financial 2024 will now be marginally ahead of expectations and Ebitda will be significantly ahead of expectations.

Further, revenue and Ebitda in financial 2025 will be ‘significantly’ ahead of market expectations.

In a separate announcement, Filtronic said it has entered into a strategic partnership and commercial agreement with Space Exploration Technologies. Space Exploration designs, manufactures, launches and operates rockets and spacecraft.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 2.4%. In China, the Shanghai Composite was up 0.8%, while the Hang Seng index in Hong Kong was up 1.9%. The S&P/ASX 200 in Sydney closed down slightly.

Brent oil was quoted at $87.74 a barrel early in London on Wednesday, down from $87.76 late Tuesday.

Gold was quoted at $2,324.01 an ounce, up slightly against $2,322.78.

Still to come on Wednesday’s economic calendar, there is a US durable goods orders reading at 1330 BST.

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