Josh White Sharecast News

13 Dec, 2023 17:43 13 Dec, 2023 17:43

London close: Stocks finish higher ahead of Fed decision

dl city of london square mile financial district walkie talkie night dusk sunset winter unsplash — Sharecast / Tim Arterbury via Unsplash

Entain

805.00p

17:15 03/12/24

-0.10%

-0.80p

London markets remained in positive territory by the close of Wednesday after weak UK GDP data led investors to anticipate a potential rate cut from the Bank of England.

Aston Martin Lagonda Global Holdings

109.70p

17:15 03/12/24

4.48%

4.70p

B&M European Value Retail S.A. (DI)

344.70p

17:15 03/12/24

2.04%

6.90p

WPP

867.20p

16:39 03/12/24

0.02%

0.20p

Market participants were also closing their wallets ahead of the latest policy announcement from the US Federal Reserve, due later in the global day.

The FTSE 100 index edged up 0.08% to close at 7,548.44 points, while the FTSE 250 gained 0.18% to reach 18,695.76.

In currency markets, sterling was last down 0.29% on the dollar, trading at $1.2526, as it declined 0.28% against the euro to change hands at €1.1606.

"It's been a cautious session for markets in Europe today with little in the way of direction ahead of tonight's Federal Reserve rate decision, and tomorrow's Bank of England and ECB rate decisions," said CMC Markets chief market analyst Michael Hewson.

"The FTSE 100 is outperforming, helped by another strong session from AstraZeneca as it continues to build on the gains we saw yesterday in response to its acquisition of Icosavax.

"Online betting company Entain shares are higher on the announcement that its CEO Jette Nygaard-Andersen is stepping down with immediate effect in the wake of the recent settlement with HMRC over alleged bribery allegations at its Turkish subsidiary.

"Weakness in oil prices which slid to fresh five-month lows before rebounding is weighing on the share prices of BP and Shell."

UK economy unexpectedly contracts, US wholesale prices remain subdued

In economic news, the UK economy contracted unexpectedly in October, according to fresh data from the Office for National Statistics.

All three major sectors of the economy experienced a decline, resulting in a 0.3% shrinkage.

The decline followed a 0.2% growth in September and defied expectations of a flat performance.

Over the last quarter, GDP remained unchanged.

The data revealed that the services sector saw a 0.2% drop in output in October, driven by a decline in information and communication services, marking a stark contrast to the 0.2% growth it had shown in September.

Meanwhile, production output plummeted by 0.8%, primarily due to widespread declines in manufacturing, after exhibiting no growth in September.

The construction sector also faced a setback, with a 0.5% decline in activity for October, following a 0.4% growth the previous month.

ONS director of economic statistics Darren Morgan said the initial estimates suggested GDP growth was flat across the last three months.

"Increases in services, led by engineering, film production and education - which recovered from the impact of summer strikes - were offset by falls in both manufacturing and housebuilding," he said.

"October, however, saw contractions across all three main sectors; services were the biggest driver of the fall with drops in IT, legal firms and film production - which fell back after a couple of strong months.

"These were also compounded by widespread falls in manufacturing and construction, which fell partly due to the poor weather."

On the continent, industrial output in the eurozone took a sharper dip than anticipated, hitting a three-year low in October, according to Eurostat.

Output registered a 0.7% decline during the month, pushing the calendar and seasonally adjusted production index to a level not seen since late 2020 at 102.7.

That followed a revised 1% fall in September, and fell below the consensus estimate of a 0.3% decline.

Across the Atlantic, wholesale prices in the US in November remained subdued, mainly due to decreased energy costs.

The Department of Labor reported that producer prices in the US remained flat month-on-month, in contrast to the consensus expectation of a 0.1% increase.

However, in annual terms, the growth in final demand prices slowed from 1.2% in October to 0.9%.

In goods, prices remained unchanged in November, as a 1.2% drop in energy prices offset a 0.6% rise in food costs.

Final demand services prices also remained flat compared to October, influenced by a 0.2% decline in trade prices, which include retailers' margins.

Excluding food and energy, final demand prices showed no change, in contrast to the consensus estimate of a 0.2% increase.

Entain jumps on CEO departure, B&M sinks after placing

On London's equity markets, Entain surged 5.09% after the immediate resignation of its CEO, Jette Nygaard-Andersen.

Stella David, a non-executive director, was appointed interim CEO, with Nygaard Andersen's departure coming on the back of resolving an HMRC investigation into the company's Turkish-facing business.

Ventilation products company Volution Group gained 4.02% after it expressed optimism in surpassing full-year profit expectations due to a robust performance in the first four months of the financial year.

Paragon Banking Group saw a rise of 3.68%, driven by an upgrade from RBC Capital Markets, which raised its rating on the shares to 'outperform' from 'sector perform' and increased the price target to 850p from 700p.

BAE Systems was ahead 1.04% after securing a contract worth up to $8.8bn with the US Army to continue its operation of the Holston Army Ammunition Plant (HSAAP) for the next decade.

On the downside, B&M European Value Retail faced a sharp decline of 7% as SSA investments conducted a placing, selling 27.8 million shares in the discount retailer at 582.5p each, raising £162.1m in gross sale proceeds.

Aston Martin Lagonda fell by 6.7% as HSBC lowered its price target for the stock and rated it as a 'hold,' citing a mixed outlook.

The new target price was set at 255p, down from 380p.

Advertising giant WPP dipped 1.63% after JPMorgan downgraded its rating from 'overweight' to 'neutral,' citing concerns about slowing US macroeconomic conditions and share losses.

Energean lost 3.35%, following the announcement of the secondary sale of 4,422,013 of its shares by Kerogen Investments.

The shares resulted from the conversion of $50m in convertible notes issued to Kerogen in February 2021, ahead of the final repayment date later this month.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,548.44 0.08%
FTSE 250 (MCX) 18,695.76 0.18%
techMARK (TASX) 4,149.03 0.25%

FTSE 100 - Risers

Entain (ENT) 846.60p 5.09%
Convatec Group (CTEC) 236.60p 2.16%
AstraZeneca (AZN) 10,390.00p 2.14%
Antofagasta (ANTO) 1,564.50p 1.72%
Rentokil Initial (RTO) 419.70p 1.72%
Compass Group (CPG) 2,108.00p 1.59%
SEGRO (SGRO) 844.40p 1.59%
Fresnillo (FRES) 568.60p 1.39%
Land Securities Group (LAND) 663.20p 1.34%
SSE (SSE) 1,870.00p 1.33%