London’s FTSE 100 ended higher on Tuesday, registering its first daily gain since hawkish words from Federal Reserve Chair Jerome Powell last week all but ensured there would be no March rate cut from the Federal Reserve.
His words echoed around markets on Thursday, and there was a red-hot US jobs report on Friday, the final nail in the coffin for March rate cut hopes. Markets still digested that reading on Monday, so it was a tepid start to the new week too.
Tuesday represented a return to form for the FTSE 100, however, supported by BP and some favourable news out of China.
The FTSE 100 index ended up 68.15 points, 0.9%, at 7,681.01. London’s large-cap index was on a four-day losing streak ahead of Tuesday’s session.
The FTSE 250 ended 152.79 points higher, 0.8%, at 19,171.34, and the AIM All-Share rose 3.80 points, 0.5%, at 754.17.
The Cboe UK 100 shot up 1.1% at 769.35, the Cboe UK 250 added 1.0% at 16,613.67, but the Cboe Small Companies faded 0.3% to 14,638.59.
In mainland Europe, the CAC 40 in Paris rose 0.7%, while the DAX 40 in Frankfurt climbed 0.7%.
In New York, the Dow Jones Industrial Average was up 0.2% at the time of the closing bell in Europe. The S&P 500 was only marginally higher, while the Nasdaq Composite was a touch lower.
The European open received some impetus after bullish trade in Asia, on policy support measures to boost beleaguered shares. Stocks exposed to China were among the better performers in London, with Asia-focused insurer Prudential up 3.8%.
There was also some better data which bolstered sentiment in Europe. The European Central Bank said that median expectations for inflation over the next 12 months decreased as it published a consumer expectation survey from December.
Median expectations for inflation over the next 12 months eased to 3.2% in December from 3.5% in November. The ECB said that this was the third consecutive month of decline.
Meanwhile, new manufacturing orders in Germany unexpectedly rose in December, according to preliminary data, marking an improvement from the previous month for Europe’s largest economy.
According to Destatis, factory orders rose by 8.9% on-month in December, after being stagnant from October to November. FXStreet were expecting factory orders to be stagnant.
In the UK, the downturn in the construction sector eased slightly at the start of the year, according to a survey.
The S&P Global UK construction purchasing managers’ index rose to 48.8 points in January from 46.8 points in December. This marks the highest reading since August 2023 and is higher than FXStreet market consensus of 47.3 points.
That said, the index remained below the crucial 50.0 no-change threshold for the fifth month running.
The pound was quoted at $1.2590 late Tuesday in London, higher compared to $1.2527 at the equities close on Monday. The euro stood at $1.0749, up slightly against $1.0728. Against the yen, the dollar was trading at JP¥148.09, lower compared to JP¥148.80.
In London, BP shares shot up 5.3%.
XTB analyst Kathleen Brooks commented: ‘Although 2023 full year profits were shy of estimates, the strong Q4 performance suggests that the company gathered steam at the end of last year, which is a good backdrop for 2024’s performance. There was good news on gas trading and its profitable convenience line, which saw gross margins soar, the company also jumped on the AI bandwagon.’
BP said it completed its $1.5 billion share buyback on Friday, and now intends to initiate a new $1.75 billion buyback, prior to reporting its first quarter results which are due on May 7. It intends to buy back $3.5 billion in shares for the first half of 2024.
BP added that it plans to conduct share buybacks worth at least $14 billion through 2025, as part of its commitment to return at least 80% of surplus cash flow to shareholders.
In 2023, revenue dropped by 14% to $213.03 billion from $248.89 billion in 2022. However, pretax profit jumped by 54% to $23.75 billion from $15.41 billion.
Renishaw surged 16%.
The Gloucestershire, England-based provider of manufacturing technologies, analytical instruments and medical devices said pretax profit fell 27% to £56.5 million in the six months that ended December 31 from £77.8 million a year before.
Revenue declined 4.9% to £330.5 million from £347.7 million a year earlier.
Despite the weaker results, Renishaw left its dividend unchanged at 16.8 pence per share.
Looking ahead, Chief Executive Officer William Lee said: ‘We expect an improvement in our trading performance in the second half of the financial year as market conditions improve, and as we continue to pursue a range of growth opportunities. To support our through-cycle growth strategy, we are continuing to focus on productivity and to make targeted investments in our people, our production facilities, and our new product pipeline.’
Elsewhere in London, Futura Medical shares jumped 40% as it hailed its first ‘meaningful’ from product sales.
The Guildford, Surrey-based pharmaceutical company expects to report £3.1 million revenue for 2023. No revenue was recognised in 2022.
Chief Executive Officer James Barder said: ‘I am incredibly proud to report that we have delivered on the three key objectives that we set out in 2023: achieving regulatory approval in the US; progressing commercial discussions by securing a standout distribution partner in Haleon for the largest consumer healthcare market in the world and reporting our first meaningful revenues. The delivery of this progress, alongside the fact that we have an award-winning product, has given us a robust and broad platform to build upon in the year ahead.’
Aston Martin Lagonda shares fell 3.9%.
News of seven-time Formula One world champion Lewis Hamilton’s switch to Ferrari from Mercedes dominated automotive space chatter last week. Aston Martin Lagonda, is sizing up a personnel change of its own, according to Bloomberg.
A Bloomberg report said Executive Chair Lawrence Stroll has contacted current and former heads of other luxury auto manufacturers to gauge interest in the role, citing people familiar with the matter.
It would mark the fourth change in CEO at the luxury car manufacturer in as many years.
Stroll tapped Felisa, formerly the boss of Ferrari between 2008 and 2016, to be CEO in May 2022. He replaced former Mercedes-AMG boss Tobias Moers, who spent less than two years in the job. His predecessor, Andy Palmer, left months after Stroll rescued Aston Martin in early 2020.
Brent oil was quoted at $78.57 a barrel at the time of the London equities close on Tuesday, up from $77.11 late Monday. Gold traded at $2,036.43 an ounce against $2,019.86.
Wednesday’s economic calendar has a Halifax UK house price index reading and German industrial production data at 0700 GMT.
In the local corporate calendar, housebuilder Barratt Developments and emerging markets-focused asset manager Ashmore release half-year results. Packaging firm Smurfit Kappa reports annual results.
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