Central banks were back in focus at the start of the new week, after some constructive economic indicators since the year began kept stock prices in a positive frame.
‘Like a sturdy old thoroughbred clearing hurdle after hurdle the FTSE 100 continues to press on towards a new record level despite the uncertain backdrop,’ said Russ Mould at AJ Bell.
The governor of the Bank of England speaks to Parliament later Monday, and the Bank of Japan holds a policy meeting on Tuesday. At its last policy meeting, in December, the BoJ surprised the market by tweaking its longstanding loose monetary policy.
The FTSE 100 index was up 13.05 points, or 0.2%, at 7,857.12 midday Monday. The FTSE 250 was up 53.24 points, or 0.3%, at 20,006.08, while the AIM All-Share was down 2.94 points, or 0.3%, at 861.66.
The Cboe UK 100 was up 0.1% at 786.11, the Cboe UK 250 was up 0.3% at 17,483.32, and the Cboe Small Companies was up 0.1% at 13,790.00.
Mould said investors will now be looking ahead to a speech by BoE Governor Andrew Bailey on Monday afternoon for any clues on the future direction of interest rates in the UK.
Bailey is due to appear at a Treasury Select Committee hearing on the December Financial Stability Report starting around 1500 GMT.
His comments will come ahead of UK inflation figures later in the week. The consumer price index for December and producer price index for November is due on Wednesday morning. CPI inflation was running at 10.7% in November.
The pound was quoted at $1.2216 at midday on Monday in London, up slightly compared to $1.2209 at the close on Friday. The euro stood at $1.0831, higher against $1.0820.
Against the yen, the dollar was trading at JP¥128.35, up compared to JP¥127.85.
Ricardo Evangelista at ActivTrades said the tide appeared to be turning for the greenback as a slowdown in US inflation creates scope for a more ‘benign’ Federal Reserve.
‘Such a scenario which may weigh on the dollar, especially as other central banks are running behind and still have some way to go before switching to a more dovish approach,’ he said.
First up in 2023, the Bank of Japan holds a monetary policy meeting on Tuesday.
Financial markets in the US were closed on Monday for the Martin Luther King day holiday.
In European equities on Monday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.3%.
In London, housebuilder stocks were in the green, boosted by news that, after two months of falls, the average asking price for a house in the UK rose by 0.9% in January.
Taylor Wimpey was up 2.0%, Barratt Developments was up 1.2%, and Persimmon was 1.0% higher.
The average price of a property coming to the market for sale rose to £362,438 in January, up 0.9% from £359,137 in December. Rightmove said this was the biggest increase at this time of year since 2020.
Annually, the average asking price rose by 6.3% in January. In December, the annual rise was 5.6%.
Rightmove’s Tim Bannister said: ‘The numbers certainly suggest that activity has bounced back after Christmas, and agents will now be busy trying to match the likely revised expectations of buyers and sellers as we move towards the important spring season.’
J Sainsbury rose 1.1% after food delivery platform Just Eat Takeaway announced a partnership with the supermarket chain for grocery delivery in the UK.
As a result of the contract, Just Eat customers will have access to thousands of products, including Sainsbury’s own brand products, for delivery, Just Eat said. The partnership will launch with more than 175 Sainsbury’s stores by the end of February in locations such as London, Edinburgh and Bristol. Just Eat plans to roll out the service to more cities during 2023.
Shares in Just Eat were down 3.9%.
In the FTSE 250, Man Group rose 2.3% after Jefferies raised the investment manager to ’buy’ from ’hold’, with a price target of 285 pence.
Shares in asset manager Ashmore lost 1.5% despite reporting an increase in assets under management in the three months that ended December 31, due to a positive market environment.
The emerging markets investor said that in the final quarter of calendar 2022, its financial second quarter, assets under management increased by $1.2 billion to an estimated $57.2 billion.
Elsewhere in London, Petra Diamonds shares dropped 7.4%. Petra said diamond production fell by a double-digit percentage in the first half of its financial year.
In the six months that ended December 31, Petra Diamond’s diamond production dropped by 21% to 1.4 million carats due to lower grades at the Cullinan mine, lower tonnes mined at the Finsch mine, and production suspensions at the Williamson and Koffiefontein mines.
Consequently, interim revenue totalled $212.1 million, down 20% from $264.7 million the year prior.
Looking forward, Petra said it expects production at the Cullinan mine to suffer for the remainder of financial 2023 and financial 2024.
As a result, production guidance for financial 2023 is revised downwards to 2.8 million carats from between 3.3 million and 3.6 million carats.
On AIM, t42 IoT Tracking Solutions jumped 14%, as it announced it entered a two-year agreement with a new Israel-based customer for the sale of its Lokies tracking units.
t42 said an initial purchase order has been received from the customer for 1,500 Lokies units. The customer also is granted end-client supply exclusivity rights, subject to the customer achieving specified quarterly sales over a 2-year period, for 5,000 Lokies, including the units ordered to date, the firm added.
Brent oil was quoted at $84.73 a barrel at midday in London on Monday, marginally soft from $84.80 late Friday. Gold was quoted at $1,917.49 an ounce, higher against $1,911.40.
Late Monday evening in the UK, London and Sydney-listed miner Rio Tinto will publish a trading statement, due at 2130 GMT. Shares were down 1.3% in London on Monday at midday.
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