UK shares drift as traders eye latest US inflation reading / Image Source: Adobe

Stocks in London headed lower going into Thursday afternoon, with investors adopting a ‘cautious’ approach ahead of Friday’s US inflation data.

The FTSE 100 index traded 23.26 points lower, 0.3%, at 8,202.07. The FTSE 250 fell just 7.08 points at 20,291.02, while the AIM All-Share fell 3.08 points, 0.4%, at 762.84.

The Cboe UK 100 fell 0.3% to 815.91, the Cboe UK 250 lost 0.1% at 17,654.85, and the Cboe Small Companies was down 0.2% at 16,961.79.

‘Investors might be tinkering at the edges with portfolios but taking a cautious approach ahead of Friday’s US inflation data which could play a crucial role in deciding the next steps for the Federal Reserve’s monetary policy,’ AJ Bell analyst Russ Mould commented.

Friday’s US data is expected to show the core personal consumption expenditures inflation gauge faded to 2.6% in May, from 2.8% in April, according to FXStreet cited consensus.

Ahead of that reading, there is US gross domestic product data at 1330 BST on Thursday.

In New York, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are all called to open 0.1% lower.

In European equities on Thursday, the CAC 40 in Paris was down 0.5% and the DAX 40 in Frankfurt edged up 0.1%.

Scope Markets analyst Joshua Mahony commented: ‘While we saw early gains for French stocks, the fact that we are seeing them fade once again comes as no surprise as we approach the weekend election. Yesterday saw yet another poll that pointed towards further gains for the Far-Right National Rally party, with a Macron loss becoming increasingly likely. Nonetheless, while the Bloomberg poll of polls has NR and its allies at 36% of the vote, the fact that this remains well below the 50% marker highlights the fact that we will likely have to wait until next Sunday to find out the result. With that in mind, traders should expect a jittery period ahead, with the fears of a fresh surge in borrowing costs and financial instability driving potential CAC and euro weakness.’

The pound was quoted at $1.2653 early Thursday afternoon, up from $1.2624 at the time of the London equities close Wednesday. The euro stood at $1.0702, rising from $1.0678. Against the yen, the dollar was trading at JP¥160.44, down from JP¥160.66.

In London, DS Smith rose 6.1%. Brazil’s Suzano ended the pursuit of International Paper, which is on the verge of sealing a deal to acquire DS Smith.

Suzano last month confirmed its interest in acquiring International Paper. Such a deal would have thrown into doubt International Paper’s acquisition of DS Smith.

However, Suzano said Wednesday: ‘It is important to emphasize that it has always been a condition of Suzano for the completion of this transaction that the engagement between the parties be based on private, confidential, and amicable terms. As it was not possible to proceed in this manner, Suzano has decided to terminate the negotiations.’

GSK lost 5.5% on an unfavourable development in the US. For the upcoming virus season, it has been recommended in the US that everyone aged 75 and older receive a jab. People aged between 60 and 74 are recommended to receive one if they have certain chronic medical conditions, such as lung or heart disease.

There was no recommendation for adults aged under 60, however.

‘The Advisory Committee on Immunization Practices, who advises how the US CDC recommends vaccines in the US has updated its recommendation for RSV vaccines, including GSK’s recently launched Arexvy. We anticipate this update will broadly be perceived as a narrowing from its previous recommendation and reigns in the scope for some longer-term Arexvy upgrades potentially materialising in H2 2024,’ analysts at Shore Capital Markets commented.

‘The ACIP’s previous recommendation was for older adults [over 60 years] using shared clinical decision-making, but following feedback from the medical community, shared clinical decision-making has been removed.’

Greeting cards and gifting firm Moonpig surged 12%. In the year that ended April 30, pretax profit rose 33% to £46.4 million from £34.9 million the previous year.

Revenue grew 6.6% to £341.1 million from £320.1 million, 89% of which came from existing customers.

The company said the start of financial 2025 was in line with expectations, with growth reported from both new and existing customer orders.

Edison analyst Neil Shah commented: ‘With a solid operational and strategic foundation, a strong cash flow position, and continued investment in innovation and technology, including AI, Moonpig is well-positioned for continued growth in 2025. The business anticipates mid to high single-digit percentage revenue growth for the coming year.’

Harworth Group jumped 10% as it struck a deal to sell land at its Skelton Grange site in Leeds to Microsoft.

The £106.6 million sale comprises two adjacent land parcels, for which the disposals are due to complete in the first half of 2024 and 2026 respectively.

The first plot, which comprises 27 acres, will be sold on an unserviced basis for gross consideration of £52.9 million. The second, which comprises 21 acres, will be sold on a serviced basis for gross consideration of £53.2 million.

Next 15 tumbled 15% as it reported ‘resilient’ trade but continues to grapple with tough market conditions.

The digital marketing firm reported it has endured a tough macro environment in the four months to May 31.

‘The group has continued to deliver organic growth in its Customer Delivery segment offset by small declines in our other segments, in part due to delays in some clients’ spending, notably relating to government contracts in a period of political uncertainty,’ it said.

Next 15 added that spending across its technology customers has ‘remained soft.’

The company expects full-year profit to be in line with management expectations.

Brent oil was quoted at $84.75 a barrel midday Thursday, up from $84.21 late Wednesday. Gold was quoted at $2,314.69 an ounce, up from $2,297.70.

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Issue Date: 27 Jun 2024