European blue chips ended the month on the front foot after easing inflation in the eurozone and the US boosted hopes that interest rates could be cut sooner than previously thought.

The FTSE 100 index closed up 30.29 points, 0.4%, at 7,453.75. The FTSE 250 ended down 234.11 points, 1.3%, at 18,233.47, and the AIM All-Share closed down 1.75 points, or 0.2%, at 713.78.

The Cboe UK 100 ended up 0.3% at 742.82, the Cboe UK 250 closed down 1.6% at 15,769.33 and the Cboe Small Companies ended down 0.6% at 13,334.49.

In European equities, the CAC 40 in Paris ended up 0.6%, while the DAX 40 in Frankfurt ended up 0.4%.

Eurozone consumer price inflation cooled tantalisingly closer to the European Central Bank’s 2% target, numbers from Eurostat showed.

The single currency bloc’s consumer price index rose by 2.4% in November from a year before, the rate of annual inflation slowing from 2.9% in October. Inflation had been expected to cool to just 2.7%, according to FXStreet cited consensus.

The latest reading represents the slowest rate of inflation since July 2021’s 2.2%. That was the first time the rate of consumer price inflation topped the ECB’s 2% target. It went on to peak at 10.6% in October 2022 but has steadily ebbed since.

Meanwhile in the US, inflation pressure eased last month, according to the Federal Reserve’s preferred price gauge, adding to the conviction that the next move in interest rates will be a cut.

According to the Bureau of Economic Analysis, the core personal consumption expenditures price index rose 3.5% in October from a year before, slowing from 3.7% inflation in September. The latest figure landed in line with the FXStreet-cited market consensus.

The core reading, the Fed’s preferred inflation gauge, does not include food or energy.

The headline PCE index rose 3.0% on-year last month, cooling from September’s 3.4% rise.

Stocks in New York were mixed at the London equities close, with the DJIA up 1.0%, the S&P 500 index flat, and the Nasdaq Composite down 0.6%.

The pound was quoted at $1.2652 at the London equities close on Thursday, down from $1.2674 at the close on Wednesday. The euro stood at $1.0909, down from $1.0966 at the same time on Wednesday. Against the yen, the dollar was trading at JP¥147.85, up from JP¥147.36.

The FTSE 100 snapped its streak of underperformance, with oil majors and China-exposed stocks leading the charge.

BP and Shell closed up 1.5% and 0.3% respectively, tracking an initially rising Brent price. Brent rose as high as $84.57 on Thursday, its best level since November 7. But the North Sea benchmark eased to $80.56 a barrel by the time of the London equities close, down from $81.80 late Wednesday afternoon.

Major oil-producing nations led by Riyadh and Moscow were moving towards an agreement to further slash production to prop up volatile prices, a source close to the negotiations told AFP.

Ministers from the 13-member Organization of the Petroleum Exporting Countries headed by Saudi Arabia and its 10 partners led by Russia have agreed to ‘further cut production by 600,000 to one million barrels a day’, the source said.

The exact size of the fresh cuts would need to be finalised at today’s last virtual meeting, which began at around 1430 GMT, the source added.

China’s manufacturing purchasing managers’ index – a key measure of factory output – dipped to 49.4 points. The reading was down slightly from 49.5 in October and also weaker than the 49.7 market forecast cited by FXStreet.

Shares in miners and Asia-focused lenders were mixed, however, amid the expectation that weaker data will lead to a stimulus. Glencore lost 0.5% in London, while Standard Chartered climbed 2.0%.

NatWest was another lender on the up, rising 0.2%, after JPMorgan lifted the stock to ’overweight’ from ’neutral’.

Entain ended a difficult week up 0.3%, ending a five-day losing streak.

The Ladbrokes Coral owner noted a fine by the Dutch gaming authority for its subsidiary BetEnt, which trades as BetCity and was acquired by Entain in January.

The Dutch gaming authority Kansspelautoriteit on Thursday fined BetEnt €3 million under the country’s money laundering and terrorism financing prevention act.

Entain said the activities relate to the period between December 2022 and February 2023, adding that it was aware of instructions from September 2022 before its €300 million acquisition of BetEnt, which trades as BetCity.

In the FTSE 250, Auction Technology was the worst performer, plunging 23%.

It reported a sharp drop in annual profit due to higher finance costs and despite a rise in overall revenue.

The London-based online auction operator said the economic environment has become ‘more challenging’, hurting growth in the second half of its financial year. However, it predicted continued revenue growth in the new year, helped by burgeoning value-added services.

Pretax profit was £7.1 million in the 12 months that ended September 30, down 23% from £9.3 million the year before.

Revenue rose by 13% to £135.2 million from £119.8 million. Of this, 5% was organic growth. Gross merchandise value on the platform was down 3% at constant currency, however, partly due to slower growth in total hammer value. THV was up 3% at constant currency to £10.8 billion for the full year, though declined slightly in the second half of the year.

Offsetting the revenue rise, net finance costs doubled to £15.4 million from £7.5 million. This was due to higher interest paid on loans and a foreign exchange loss.

Boot maker Dr Martens slumped 21%.

In the half-year ended September 30, pretax profit fell by 55% to £25.8 million from £57.9 million the year before. Revenue declined 5.4% to £395.8 million from £418.8 million the year before. Its top line was hurt by ‘an increasingly difficult consumer environment’ in the US.

It said it expects full year revenue to decline by a high single-digit percentage, on a constant currency basis.

It also said it expects financial 2024 Ebitda to be ‘moderately below the bottom end of the range of consensus expectations’ of £223.7 million to £240.0 million.

Dr Martens cautioned that a bounce in its US division will take longer to materialise than initially anticipated.

Among London’s small-caps, Metro Bank closed up 2.3%.

The lender said it it expects to cut a fifth of its workforce and the lender is reviewing its policy of keeping branches open seven days a week as it looks to ‘simplify its operations’.

It had announced a cost reduction plan in early October, to be implemented in the fourth quarter of 2023. It expected this to deliver savings of at least £30 million per year.

On Thursday, however, Metro Bank said these cost cuts will go deeper. It has identified potential cost savings of up to £50 million annually.

Gold was quoted at $2,038.85 an ounce on Thursday at the London equities close, down from $2,041.08 late Wednesday.

In Friday’s UK corporate calendar, Mind Gym posts its half-year results.

The economic calendar has a slew of manufacturing purchasing managers’ index releases, including for China, EU, Germany, the UK and the US.

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Issue Date: 30 Nov 2023