London City skyline
The FTSE 100 index closed up 53.70 points, 0.7%, at 8,193.51 / Image source: Adobe

Share prices in London closed up on Wednesday as New York climbed midday, following Fed Chair Jerome Powell’s testimony and ahead of key US inflation data on Thursday.

The FTSE 100 index closed up 53.70 points, 0.7%, at 8,193.51. The FTSE 250 ended up 282.74 points, 1.4%, at 20,927.76, and the AIM All-Share closed up 0.91 of a point, 0.1%, at 772.85.

The Cboe UK 100 ended up 0.7% at 816.35, the Cboe UK 250 closed up 1.5% at 18,174.36, and the Cboe Small Companies ended up 0.3% at 17,120.13.

In European equities on Wednesday, the CAC 40 in Paris closed up 0.9% and the DAX 40 in Frankfurt up 1.0%.

Stocks across the Atlantic got a boost on the second day of Fed Chair Jerome Powell’s testimony.

Markets in New York were higher at the London equities close, with the DJIA up 0.2%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.5%.

Powell’s words to US lawmakers on Tuesday were somewhat cautious, though he kept alive hopes of a rate cut this year.

He said the US central bank is making ‘modest’ progress in its inflation fight.

On Thursday, there is US inflation data, which will either add to or deplete the Fed’s confidence.

Thursday’s data is expected to show the US annual inflation rate cooled to 3.1% in June, from 3.3% in May.

A hotter-than-expected reading could support the argument for higher interest rates for longer, while an in-line or cooler one could solidify expectations for a rate cut in September.

For now, Andreas Thalassinos at Neotrades noted that ‘Gold prices continue to rebound, driven by expectations of potential US Federal Reserve rate cuts.’

Gold was quoted at $2,379.50 an ounce at the London equities close Wednesday, higher against $2,353.59 at the close on Tuesday.

Thalassinos added that Thursday’s upcoming data ‘could significantly impact market sentiment and introduce volatility to the precious metals market.’

The pound was quoted at $1.2846 at the London equities close Wednesday, higher compared to $1.2781 at the close on Tuesday. The euro stood at $1.0827 at the European equities close Wednesday, higher against $1.0810 at the same time on Tuesday. Against the yen, the dollar was trading at JP¥161.74, up compared to JP¥161.46 late Tuesday.

In the FTSE 250, SSP jumped 10%, after the travel food outlet operator said the second half of its financial year has ‘started well’ and confirmed its annual outlook.

Sales in the third quarter ended June 30 were up 15% on a year before, or 16% at constant currency rates, with like-for-like growth of 6%. For the first nine months of the financial year, which ends on September 30, revenue was up 15%, or 18% at constant exchange rates.

‘It’s been a rough journey for airport and railway station concessions operator SSP since the pandemic but today’s update suggests it is making tangible progress. Benefiting from a captive audience, SSP enjoys significant pricing power, but the disrupted recovery in travel and some missteps on the company’s part meant it has not taken full advantage of these inherent strengths. Investors will hope normal service is now resumed,’ said AJ Bell’s Russ Mould.

Travis Perkins jumped 7.1%, after it announced the appointment of Pete Redfern as its new chief executive officer, and Geoff Drabble as chair designate.

The Northampton, England-based builders’ merchant has appointed Drabble with effect from October 1, and said he will officially take up the chair position as soon as his capacity allows.

Drabble is currently the chair of Wokingham, England-based heating and plumbing products distributor Ferguson, and of London-based packaging company DS Smith.

Travis Perkins also named Pete Redfern as CEO, with effect from September 16 when current CEO Nick Roberts will step down.

Amongst London’s small-caps, Gym Group rose 8.5%, with its membership numbers and estate on the up.

In the six months ended June 30, revenue jumped 12% to £112.1 million from £99.8 million a year earlier. Its membership numbers stood at 905,000 as at June 30, rising from 867,000 a year prior and 850,000 on December 31.

It noted that in the first half of the year, it opened four new gyms, taking the total to 237. Gym Group added that it remains on track to open 10 to 12 new gyms by the year-end.

Brent oil was quoted at $85.40 a barrel at the London equities close Wednesday, up from $84.76 late Tuesday.

In Thursday’s UK corporate calendar, there are full year results from Hays and Jet2. There are also some trading statements from MJ Gleeson, Severn Trent and Trustpilot.

As well as CPI data from the US, the economic calendar for Thursday has the weekly US initial jobless claims data at 1330 BST.

Before that, at 0700, there is a slew of UK economic data, including a gross domestic product reading and trade balance data.

At the same time, a CPI reading from Germany will be released.

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Issue Date: 10 Jul 2024