European equities finished Thursday firmly in the green, despite a mixed bag of company updates and earnings, alongside fears on the outlook of US interest rates and lukewarm data from China.
The FTSE 100 index close up 53.95 points, 0.7%, at 7,455.67. The FTSE 250 ended up 191.59 points, 1.1%, at 18,037.85, and the AIM All-Share closed up 0.4%, or 2.58 points, at 704.26.
The Cboe UK 100 ended up 0.7% at 744.44, the Cboe UK 250 closed up 0.9% at 15,638.28, and the Cboe Small Companies ended down 0.8% at 12,831.08.
Stocks in New York were mixed at the London equities close. The Dow Jones Industrial Average was down 0.1%. However, the S&P 500 index was up 0.1%, and the Nasdaq Composite up 0.2%.
The US Federal Reserve is likely done raising interest rates to tackle inflation but probably will not cut them ‘in the short term,’ a senior policymaker said Wednesday.
Philadelphia Fed President Patrick Harker told a conference in Evanston, Illinois, that he felt holding interest rates at their current, restrictive, level was the right course of action.
Harker spoke after remarks from Fed Chair Powell. Investors were hoping for some guidance from Powell on Wednesday, but he gave little away about interest rates. He did not comment on the outlook for the US economy, either.
Powell speaks again at 1900 GMT on Thursday.
Eyes have also been on data from China. The country slipped back into deflation in October, highlighting the work officials have in reviving still-sluggish demand in the world’s number two economy.
The consumer price index, the main gauge of inflation, fell 0.2% on-year, according to the National Bureau of Statistics. The index had been unchanged year-on-year in September and edged up 0.1% in August.
Looking ahead, BBH Currency Strategy said: ‘The economy is likely to continue struggling with deflation well into next year, as modest stimulus measures taken so far are already starting to wear off. With rising risks of persistent deflationary pressures, we expect further stimulus measures in the coming months.’
The pound was quoted at 1.2275 at the London equities close Thursday, down compared to $1.2300 at the close on Wednesday. The euro stood at $1.0709 at the European equities close Thursday, up slightly against $1.0707 at the same time on Wednesday. Against the yen, the dollar was trading at JP¥151.00, up compared to JP¥150.83 late Wednesday.
There has been a slew of corporate news over Thursday, with a mix of earnings and trading updates.
‘The market has been flooded with corporate news and to call the results and trading updates a mixed bag is putting it lightly,’ said Russ Mould, investment director at AJ Bell.
In the FTSE 100 index, Flutter Entertainment fell 10%.
For the third quarter of 2023, the Dublin-based sports betting and gambling company said revenue increased 7.6% to £2.04 billion from £1.89 billion, although it preferred to highlight the constant currency growth of 13%.
Flutter, which owns Paddy Power, also said it is ‘making good progress’ towards securing a US listing on the New York Stock Exchange, which it expects to become effective in the first quarter. It plans to cancel its Euronext Dublin listing ‘simultaneously or shortly prior to this’, and said it is considering pursuing a primary US listing in due course.
B&M dropped 3.1%, despite a good set of results.
The Luxembourg-based variety goods value retailer reported that pretax profit increased 11% to £222 million in the first half ended September 30, from £201 million the year prior. It said its garden & Outdoor trading periods in its UK business were ‘critical’ to the profit increase in the first half.
It said revenue increased 10% to £2.55 billion in the period, from £2.31 billion a year ago.
Auto Trader fared much better, leading the FTSE 100 with a 8.5% rise.
Revenue in the automotive marketplace’s first-half ended September 30 rose 12% to £280.5 million from £249.8 million. Its pretax profit was 10% higher at £162.8 million from £148.0 million.
In the FTSE 250, Indivior fell 10%.
For the three months ended September 30, the Virginia-headquartered pharmaceutical company reported net revenue of $271 million, up 17% from $232 million a year prior.
By contrast, Indivior posted a net loss of $135 million for the quarter, swung from net income of $41 million year-on-year. Pretax loss was $181 million, swung from profit of $54 million.
Wizz Air fell 9.8%. It downgraded its bottom line guidance due to difficult operating conditions, though it reported a swing to half-year profit.
The Budapest-based budget airline said in the six months to September 30, it swung to a pretax profit of €450.2 million from a loss of €389.7 million a year prior. Revenue jumped 39% to €3.05 billion from €2.19 billion.
Looking ahead, the company expects a load factor of above 90% in the current financial year 2024 ending March 31, with net profit of €350 million to €400 million, a downgrade from June, when it guided for net profit of up to €450 million, and compared to a loss of €564.6 million in financial 2023.
In European equities on Thursday, the CAC 40 in Paris ended up 1.1%, while the DAX 40 in Frankfurt ended up 0.8%.
Brent oil was quoted at $80.69 a barrel at the London equities close Thursday, up from $80.05 late Wednesday. Gold was quoted at $1,961.11 an ounce at the London equities close Thursday, higher against $1,954.55 at the close on Wednesday.
In Friday’s UK corporate calendar, there are third quarter results from Allianz Technology Trust and Wheaton Precious Metals.
The economic calendar for Friday has UK gross domestic product data at 0700 GMT. There are also UK trade statistics at the same time.
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