London city skyline
FTSE up against weak Europe and US Tech / Image source: Adobe

Stocks in Europe closed higher on Monday, with market participants waiting for signs that inflationary pressures are starting to lessen.

In the UK, Prudential shares were in fashion, after it started its $2 billion share buyback. Elsewhere in London SIG shares closed lower, after it slashed its profit guidance.

The FTSE 100 index closed up 43.83 points, 0.5%, at 8,281.55. The FTSE 250 ended up 120.22 points, 0.6%, at 20,562.57, and the AIM All-Share closed down 0.71 of a point, 0.1%, at 771.86.

In European equities on Monday, the CAC 40 in Paris and the DAX 40 in Frankfurt both ended up 1.0%.

In European equities on Monday, the CAC 40 in Paris ended up 1.1%, while the DAX 40 in Frankfurt ended up 1.0%.

The main focus of the week is the US personal consumption data, which is due out on Friday.

‘The big economic news comes at the end of this week with a reading of US core PCE inflation – the Federal Reserve’s preferred measure of prices.

‘Investors will be looking for signs the inflationary pressure which has led to a ratcheting back of expectations on interest rate cuts are starting to ease,’ said AJ Bell’s Russ Mould.

Stocks in New York were mixed at the London equities close, with the DJIA up 1.0%, the S&P 500 index up 0.4%, and the Nasdaq Composite down 0.2%.

The pound was quoted at $1.2691 at the London equities close Monday, higher compared to $1.2628 at the close on Friday. The euro stood at $1.0728 at the European equities close Monday, up against $1.0685 at the same time on Friday. Against the yen, the dollar was trading at JP¥159.69, higher compared to JP¥159.52 late Friday.

In the FTSE 100, Prudential shot up 7.4%.

On Monday, the Asia-focused insurer kicked off the first trance of a $2 billion share buyback and said progress towards its 2027 financial objectives will ‘increase the potential for further cash returns to shareholders’. The buyback will run to no later than mid-2026.

UBS said the buyback is ‘earlier and marginally greater than its expectations’. The Swiss bank had expected a $1.8 billion buyback alongside first half results in June.

In the FTSE 250, Britvic rose 7.1%. Suitor Carlsberg announced an agreement with PepsiCo, removing a potential obstacle as it attempts to buy Britvic.

Danish brewer Carlsberg said US drinks firm PepsiCo has agreed to waive a so-called change-of-control clause as part of its long-term bottling agreement with British soft drinks group Britvic.

This waiver will come into effect should an acquisition of Britvic by Carlsberg proceed to completion.

The clause was viewed effectively as a poison-pill arrangement that could have prevented an acquisition of Britvic by allowing Pepsi to end its bottling deal, making the UK company a less attractive takeover target.

So far, soft drinks manufacturer Britvic, the maker of Robinsons and famed for its ’posh tonics’, has rebuffed approaches from Carlsberg.

Amongst London’s small-caps, SIG closed up 5.3%, after it warned full-year operating profit would be below current City expectations.

The Sheffield-based supplier of insulation, roofing, commercial interiors and construction products said market conditions have remained challenging in the calendar year to date.

As a result, SIG expects 2024 full year underlying operating profit to be in the range £20 million to £30 million, below the current analyst range. SIG put the analyst range at between £36.7 million to £43.0 million, as of Friday.

On AIM, Empyrean Energy soared 53%.

The oil & gas exploration and production company said it has entered a binding gas sale agreement with a subsidiary of Indonesia’s national oil company PT Pertamina.

Brent oil was quoted at $85.07 a barrel at the London equities close Monday, down from $85.73 late Friday. Gold was quoted at $2,331.10 an ounce at the London equities close Monday, lower against $2,326.10 at the close on Friday.

In Tuesday’s UK corporate calendar, there are full year results from Augmentum Fintech, IG Design, and Warehouse REIT.

The economic calendar for Tuesday has the Ifo business climate reading for Germany. There is also the US Dallas Fed manufacturing index data to look out for.

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Issue Date: 24 Jun 2024