Stocks in London largely fell on Tuesday, as markets await upcoming US inflation data and the latest monetary policy decision from the Bank of England, two key economic indicators for investors.
Financial markets in the UK were closed on Monday following the coronation of King Charles III.
The FTSE 100 index closed down 14.29 points, or 0.2% at 7,764.09 on Tuesday. The FTSE 250 ended down 175.46 points, or 0.9%, at 19,277.04, while the AIM All-Share closed up 0.56 of a points at 829.35.
The Cboe UK 100 ended down 0.4% at 775.37, the Cboe UK 250 closed down 1.0% at 16,890.29, and the Cboe Small Companies ended down 0.4% at 13,569.12.
US inflation data will be released at 1330 BST on Wednesday. The BoE will announce its decision at 1200 BST on Thursday.
Amid stubbornly high inflation and strong wage data in March, markets are expecting another 25 basis point hike to rates from the Bank of England.
Last week, the US Federal Reserve and the European Central Bank lifted their respective interest rates by 25 basis points. The Fed signalled a possible rate hike pause starting, while the ECB pointed to further hikes ahead.
The pound was quoted at $1.2618 at the London equities close on Tuesday, down slightly from $1.2628 at the close on Friday.
US inflation data for April will take centre stage on Wednesday.
In March, the US inflation rate was cooler than expected. According to the Bureau of Labor Statistics, the US yearly inflation rate faded to 5.0% in March, from 6.0% in February.
Markets are expecting the annual inflation rate remain at 5.0% in April, according to FXStreet.
Stocks in New York were lower at the London equities close, with the Dow Jones Industrial Average down 0.1%, the S&P 500 index down 0.4%, and the Nasdaq Composite down 0.5%.
Against the yen, the dollar was trading at JP¥135.09 late Tuesday, higher compared to JP¥134.88 late Friday.
In London, JD Sports climbed 2.9% after it proposed to buy Groupe Courir SAS, a France-based footwear and apparel retailer with 313 stores across six European countries.
JD Sports said it is in exclusive talks to buy Courir for an enterprise value of €520 million, including €195 million in assumed net debt.
It expects the transaction to close in the second half of 2023.
Courir is majority owned by private equity firm Equistone Partners Europe, which bought Courir in 2018, carved out from Group Go Sport. The company in 2022 recorded a pretax profit of €47.4 million and revenue of €609.8 million.
Pearson added 1.2% after it announced it has adopted a strategy for artificial intelligence and will embed the technology into its products in order to enhance teaching and learning.
The education publisher said a number of projects are underway, with AI set to be embedded in its Workforce Skills, Mastering, MyLab, Pearson+ and English Language Learning products.
The stock is down 12% so far in 2023. It lost 15% on Tuesday last week after US peer Chegg warned that AI software such as ChatGPT is hurting the number students who are signing up for its services.
In the FTSE 250, Victrex dropped 8.0% after it reported a lower profit in the first half of its financial year.
The polymer supplier’s interim pretax profit fell to £39.1 million from £43.6 million a year prior.
Victrex explained that pretax profit fell on lower volumes, cost inflation and targeted investment. Sales volumes fell by 14% to 1,941 tonnes from 2,264 tonnes.
‘Our first half performance was driven by strong pricing, an improved sales mix and currency, with revenue up 1%, despite a softer macro-economic environment, resulting in weaker volumes, compared to a record financial 2022,’ said Chief Executive Officer Jakob Sigurdsson.
The company’s financial year ends September 30.
Marshalls fell 6.9% after the company said it will miss its full-year guidance, amid lower building levels and a drop in like-for-like revenue.
The natural stone and concrete manufacturer said its revenue for the four months ended April 30 was £227 million, up 12% from £202 million a year prior.
On a like-for-like basis, however, revenue fell by 14% due to a reduction in new house building, an uncertain economic climate, and ‘continued weakness’ in private housing repair, maintenance and improvement activity.
Consequently, Marshalls said it expects to deliver full-year results that are lower than its original forecast, but added it is well-placed to deliver profitable long-term growth when market conditions improve.
Elsewhere in London, Civitas Social Housing surged 44% to 80.00 pence after its takeover offer by long-term real asset investor CK Asset Holdings.
CK Asset offered 80p per share, a 44% premium to Civitas’s closing price of 55.4p per share last week Friday, valuing the the healthcare real estate investment trust at around £485 million.
On AIM, Purplebricks plunged 66% as it predicted predicted drops in revenue and earnings in the year ahead, and reaffirmed its decision to explore a potential sale of the company.
The online real estate agent said instruction levels did not increase in the fourth quarter of the just-completed year, as had been anticipated. Instead, they decreased to 5,672 from 10,964 a year before.
Purplebricks expects the decrease to hurt revenue and earnings before interest, tax, depreciation and amortisation in the current financial year.
The company also said negotiations for the sale of its business and assets were ongoing, with a small number of parties remaining in discussions. If concluded, transactions are expected to deliver returns ‘materially below’ its current share price, Purplebricks said.
In European equities on Tuesday, the CAC 40 in Paris ended down 0.6%, while the DAX 40 in Frankfurt ended flat.
The euro stood at $1.0955 at the European equities close on Tuesday, lower against $1.1016 at the same time on Friday.
Brent oil was quoted at $75.65 a barrel at the London equities close on Tuesday, up from $74.94 late Friday. Gold was quoted at $2,025.96 an ounce, higher against $2,013.19 at the close on Friday.
In Wednesday’s UK corporate calendar, there are half-year results from online fashion brand Asos and a trading statement from pub chain JD Wetherspoon.
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