Shares in Europe opened mixed on Wednesday, though the FTSE 100 outperformed, as focus turns to a slew of readings of the services economy.
Eyes will also be on the ADP US jobs report, a precursor to Friday’s nonfarms.
Among London listings, shares in Fulham Shore surged after the Franco Manca owner agreed to a buyout. Fresnillo’s stock was on the up, with the miner’s shares supported by robust gold prices.
The FTSE 100 index opened up 15.85 points, 0.2%, at 7,650.37. The FTSE 250 was down 23.40 points, 0.1%, at 18,791.64, and the AIM All-Share was up just 0.13 of a point at 810.35.
The Cboe UK 100 was up 0.2% at 765.49, the Cboe UK 250 down 0.2% at 16405.87, and the Cboe Small Companies was flat at 13,235.57.
In European equities on Wednesday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was down 0.1%.
Shares in Asia struggled. The Nikkei 225 index ended down 1.7%. The S&P/ASX 200 in Sydney closed up marginally.
Financial markets in Hong Kong and Shanghai were closed for Tomb Sweeping Day.
Growth in Japan’s services sector strengthened in March, according to the latest survey data.
The au Jibun Bank services purchasing managers’ index rose to 55.0 points, from 54.0 in February. Rising further above the 50-point mark that separates expansion from contraction, it shows growth was stronger.
The services sector was boosted by the ‘the dissipating impact of the Covid-19 pandemic and stronger customer confidence [which] combined to boost output and orders’, said S&P Global Market Intelligence economist Usamah Bhatti.
The composite PMI - which weighs the services and manufacturing sectors - rose to 52.9 from 51.1.
Meanwhile, the Australian services sector fell into a mild contraction during March, with the Judo Bank PMI falling to 48.6 points from 50.7 the month before.
‘Sub-sector data indicated that the finance & insurance sector saw the sharpest fall in activity in March. Softer demand, affected by higher inflation and interest rates, led to fall in new business during March,’ S&P Global said.
The composite PMI fell to 48.5 from 50.6.
PMI releases from the eurozone, UK and US are due at 0900 BST, 0930 BST and 1445 BST.
In European data, German factory orders continued to decline on an annual basis in February.
According to Destatis, factory orders in Germany fell 5.7% in February from a year before, slowing from the revised fall of 12% in January. This was less than FXStreet-cited market consensus of 10.5%.
January’s factory orders were initially thought to have fallen 10.9% annually.
From the month before, orders in February were up 4.8%, compared to the downwardly revised 0.5% rise in January. Consensus had been expecting a more moderate increase of 0.3%.
On the FTSE 100, RS Group lost 2.7%, making it the worst performer in early trade.
It said it anticipates full-year profit to be slightly ahead of consensus expectations and revenue to be in line with estimates.
The London-based industrial and electronics products distributor noted revenue growth for the fourth quarter slowed, however.
For the year ended March 31, RS said it saw 10% like-for-like revenue growth. It delivered growth of 12% in the Europe, Middle East & Africa and 11% growth in the Americas. Like-for-like revenue in the Asia Pacific region fell 1%, however.
For the fourth quarter alone, group like-for-like revenue improved 1% on-year, slowing from growth of 8% in the third quarter and 15% and 18% in the second and first, respectively.
On the FTSE 250, Hilton Food lost 0.3%.
Hilton Food said that revenue in the year to January 1 rose 17% to £3.85 billion from £3.30 billion a year earlier. However, pretax profit fell 38% to £29.6 million from £47.4 million.
The food packaging business proposed a final dividend of 22.6p, bringing the total dividend for 2022 to 29.7p, the same level as the last financial year.
Hilton Food also named Steve Murrells as its new chief executive officer.
Murrells will take up the role from July 3, succeeding Philip Heffer, who has decided to step back from running the company after almost 30 years with Hilton Foods, including the past five years as CEO. Heffer will remain with the business as an advisor to the Hilton Foods Board.
On London’s AIM market, Fulham Shore soared 32%, after the Franco Manca and The Real Greek owner agreed to a £93.4 million takeover.
Tokyo-listed food company Toridoll Holdings will pay 14.15 pence per share, a 35% premium to Fulham Shore’s Tuesday closing price.
Restaurant sector-focused private equity fund Capdesia will also be involved in the deal. Toridoll’s stake will eventually reduce to no less than 51%.
Fulham Shore Executive Chair David Page said: ‘We are proud of the significant progress that Fulham Shore has made since it was founded in 2012. We are proud of our two brands, Franco Manca and The Real Greek, and the growth we have delivered for Fulham Shore. Whilst we remain excited about the prospects for the business on a standalone basis, we have been in discussions with both Toridoll and Capdesia and received a proposal that we believe is compelling for all of our stakeholders.
We believe Toridoll and Capdesia’s experience in successfully building restaurant businesses and their long-term vision for Fulham Shore, will enable Fulham Shore to fulfil its long-term potential.’
The pound was quoted at $1.2497 at early on Wednesday in London, down compared to $1.2501 at the equities close on Tuesday. The pound reached an intraday high of $1.2524 on Tuesday, its best level since June last year.
The euro stood at $1.0959, up marginally against $1.0957. Against the yen, the dollar was trading at JP¥131.58, down compared to JP¥131.83.
In the US on Tuesday, Wall Street ended lower, with both the Dow Jones Industrial Average and the S&P 500 closing down 0.6%, and the Nasdaq Composite down 0.5%.
Oil prices clawed back above the $85 a barrel mark as traders continue to digest Sunday’s shock production cut from Opec+.
Brent oil was quoted at $85.27 a barrel at early in London on Wednesday, up from $84.52 late Tuesday.
Meanwhile, gold continued to top the $2,000 mark. Gold was quoted at $2,027.11 an ounce, higher against $2,016.62. Fresnillo tracked the gold price higher, rising 2.5%.
Still to come on Wednesday is the ADP US jobs report at 1315 BST.
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