Shares in insurer Direct Line and train operator Mobico slide : Image Source / Adobe

The FTSE 100 barely budged in early trade in London on Monday, in the aftermath of what was a busy week of central banking action.

Rate cut hope spurred on equities last week. The governor of the Bank of England, meanwhile, said rate cuts are ‘in play’.

Among individual shares, Direct Line and Mobico plunged at the start of the week. Kingfisher declined after softer earnings.

The FTSE 100 index opened up just 0.19 of a point at 7,931.11. The FTSE 250 was down 95.77 points, 0.5%, at 19,629.40, and the AIM All-Share was up 0.42 of a point, 0.1%, at 739.94.

The Cboe UK 100 was down 0.1% at 793.03, the Cboe UK 250 was down 0.4% at 17,043.99, and the Cboe Small Companies was marginally up at 14,615.29.

In European equities on Monday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both up 0.1%.

The US Federal Reserve last week left rates unmoved, but a set of projections which accompanied its decision suggested three cuts are still in the offing this year.

The Bank of England also left its benchmark rate unmoved, but there is a growing conviction it will soon cut.

BoE Governor Andrew Bailey said that interest rates are in play this year, as signs that the risk of a wage-price spiral ebb. Bailey said he is increasingly confident that inflation is heading towards the bank’s target in an interview with the Financial Times.

He signalled that markets were right to expect more than one interest rate cut this year, and stressed how small the technical recession last year had been.

The pound was quoted at $1.2597 on Monday morning, largely unmoved from $1.2596 on Friday. The euro was unmoved at $1.0808. Against the yen, the dollar was trading at JP¥151.36, lower compared to JP¥151.43.

In the FTSE 100, Kingfisher lost 2.1%, the worst performing blue-chip stock.

The B&Q and Screwfix owner reported a decline in annual sales and profit, although hailed a ‘resilient’ performance in its UK and Ireland operation.

Pretax profit fell 22% to £475 million in the financial year that ended January 31 from £611 million a year earlier, while sales fell 0.6% to £12.98 billion from £13.06 billion. Kingfisher maintained its total dividend for the year at 12.40 pence per share.

Like-for-like sales so far in the first-quarter are down 2.3% on-year, it said.

Kingfisher expects adjusted pretax profit for the new year in the range of £490 million to £550 million, potentially a 14% decline from what was achieved in the year just gone. Adjusted pretax profit in financial 2024 fell 25% to £568 million from £758 million.

AstraZeneca lost 0.2%, after its Ultomiris treatment has been approved by the US Food & Drug Administration as the first and only long-acting C5 complement inhibitor to treat some adult sufferers of central nervous system disorder neuromyelitis optica spectrum.

The Cambridge-based pharmaceutical company said this was based on positive results from the Champion-NMOSD phase 3 trial, in which Ultomiris met its primary endpoint. NMOSD is a rare autoimmune disease that affects the central nervous system, including the spine and optic nerves.

‘The diagnosed prevalence of adults with NMOSD in the US is estimated at approximately 6,000,’ AstraZeneca said.

In the FTSE 250, Direct Line lost 13%, after Ageas last Friday said it withdrew a proposed bid for the motor and home financial services group.

Belgian insurer Ageas had made two proposals to buy Direct Line, but its advances were rejected.

Mobico lowered earnings guidance as it announced a further delay to its 2023 results as it grapples with accounting issues at its German rail business. Shares plunged 7.5%.

The Birmingham-based public transport provider, formerly known as National Express, now expects annual results to be published in the second half of April, compared to a previous expectation of by the end of March, itself delayed from February 29.

Mobico expects adjusted earnings before interest and tax in the range of £160 million to £175 million, reduced from previous guidance of £175 million to £185 million.

Among London’s small-caps, Gore Street Energy gained 1.6%.

The investor in utility-scale energy storage projects said it acquired the remaining 49% stake of two existing Irish projects: Porterstown, a 90 megawatt asset, and Kilmannock, a 120MW construction asset.

It also said it exercised option to acquire a 51% stake in Project Mucklagh, a 75MW pre-construction energy storage project located in Ireland. The project has a target energisation date of 2028.

Gore Street Energy said the transactions to be settled by issue of 9.7 million shares at 110.0 pence each. The deals raise its total Irish asset base to 385 megawatts, of which 130MW is operational.

On AIM, Caspian Sunrise surged 29%, after the Kazakhstan-focused oil and gas exploration and production company said it was mulling the sale of all or part of the BNG contract area’s shallow structures at ‘indicative prices potentially significantly greater than its current carrying value’.

In Asia on Monday, the Nikkei 225 index in Tokyo was down 1.2%. In China, the Shanghai Composite fell 0.7%, while the Hang Seng index in Hong Kong lost 0.2%. The S&P/ASX 200 in Sydney closed up 0.5%.

In the US on Friday, Wall Street ended largely lower, with the Dow Jones Industrial Average down 0.8%, the S&P 500 down 0.1% and the Nasdaq Composite up 0.2%.

Brent oil was quoted at $84.94 a barrel on Monday morning, down from $85.52 late Thursday. Gold was quoted at $2,163.91 an ounce Friday, down against $2,165.58.

Still to come on Monday’s economic calendar, Bank of England Monetary Policy Committee member Catherine Mann speaks at 1415 GMT, while US new home sales data is out at 1400 GMT.

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Issue Date: 25 Mar 2024