Federal Reserve system symbol
The US Federal Reserve announced guidance of just one interest rate cut by the end of the year / Image source: Adobe

Stock prices in London were mixed on Thursday morning, with strong earnings from FTSE 100’s Halma after the US Federal Reserve announced guidance of just one interest rate cut by the end of the year.

The FTSE 100 index opened down 4.18 points, 0.1%, at 8,211.30. The FTSE 250 was down 52.37 points, 0.3%, at 20,445.03, and the AIM All-Share was up 0.90 of a point, 0.1%, at 788.26.

The Cboe UK 100 was down 0.2% at 817.62, the Cboe UK 250 was down 0.5% at 17,875.36, and the Cboe Small Companies was down 0.1% at 16,762.64.

In European equities on Thursday, the CAC 40 in Paris was down 0.4%, while the DAX 40 in Frankfurt was down 0.3%.

In the US on Wednesday, Wall Street ended mixed with the Dow Jones Industrial Average down 0.1%, meanwhile the S&P 500 closed up 0.9% and the Nasdaq Composite up 1.5%.

The US Federal Reserve left interest rates unmoved on Wednesday, as expected, and the central bank signalled just one cut could be in the offing before the end of the year.

The central bank maintained the federal funds rate range at 5.25% to 5.50%.

The Fed added: ‘The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.’

Focus was on the Fed’s latest economic projections, which includes the dot-plot of median interest rate expectations.

The chart suggests only one cut could be forthcoming before the end of 2024. The previous projection suggested three.

The decision followed the Bureau of Labor Statistics reporting that the year-on-year US consumer price inflation rate cooled to 3.3% in May from 3.4% in April. According to FXStreet, markets were expecting the rate of inflation to be steady, however.

The pound was quoted at $1.2789 early on Thursday in London, lower compared to $1.2836 at the equities close on Wednesday. The euro stood at $1.0815, down against $1.0848. Against the yen, the dollar was trading at JP¥157.23, higher compared to JP¥155.77.

In the FTSE 100, Halma jumped 5.5% to the top of the index.

The Buckinghamshire, England-based safety equipment maker reported that revenue in the year ended March 31 jumped 10% to £2.03 billion from £1.85 billion a year earlier. Pretax profit surged 17% to £340.3 million from £291.5 million.

Halma upped its dividend to 21.61p from 20.20p.

Chief Executive Marc Ronchetti, said: ‘We have made a positive start to the new financial year. Our order intake in the year to date is ahead of both revenue and the comparable period last year. We expect to deliver good organic constant currency revenue growth in the ye ar ahead, and an adjusted Ebit margin of around 21%, in the middle of our target range.’

St James’s Place lost 0.9%, after named Caroline Waddington as its new chief financial officer.

Waddington will succeed Craig Gentle, who will be retiring from the business. Gentle has been with the company since 2016, serving as CFO since 2018.

She will join St James’s Place in the second half of the year, at which point Gentle will step down as director but remain with the company for ‘a short period to facilitate an orderly handover.’

Waddington joins from UBS where she was CFO for the group’s UK Credit Suisse entities, as well as chief operating officer for Credit Suisse International.

In the FTSE 250, Crest Nicholson fell 10%.

Revenue in the six months ended April 30 fell to £257.5 million from £282.7 million a year earlier.

Crest swung to a pretax loss of £30.9 million from a profit of £28.4 million.

The company cut its dividend by 82% to 1.0p from 5.5p.

Crest also announced that its Chief Executive Peter Truscott will step down on Friday. Truscott has been CEO since 2019.

Martyn Clark, who joined Crest at the start of June, will takeover as CEO.

In Asia on Thursday, the Nikkei 225 index in Tokyo was down 0.4%. In China, the Shanghai Composite was down 0.3%, while the Hang Seng index in Hong Kong was up 1.0%. The S&P/ASX 200 in Sydney closed up 0.4%

Brent oil was quoted at $82.26 a barrel early in London on Thursday, up from $82.07 late Wednesday. Gold was quoted at $2,317.01 an ounce, lower against $2,326.83.

Still to come on Thursday’s economic calendar, there is industrial production data from the eurozone at 1000 BST. At 1330 BST, there is the weekly US initial jobless claims data, as well as a producer price reading.

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Issue Date: 13 Jun 2024