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(Alliance News) - European stocks closed mixed on Tuesday, while equities in New York suffered a less-than-stellar morning, as the rate of inflation in the US cooled at a slower pace than expected last month.
The FTSE 100's efforts to reach the 8,000 point milestone were scuppered by up-and-down trading in the afternoon.
The blue-chip index went into the afternoon's US inflation reading solidly higher, though it surrendered gains following the data. It perked up shortly after, but weakened in the final hour of trading.
The FTSE 100 index closed up 6.25 points, or 0.1%, at 7,953.85. The index reached a new all-time high of 7,996.35 earlier in the day, within touching distance of the 8,000 milestone.
The FTSE 250 ended down 106.29 points, or 0.6%, at 20,018.23, and the AIM All-Share fell 3.18 points, or 0.4%, at 867.30.
The Cboe UK 100 ended up 0.3% at 797.28, the Cboe UK 250, however, fell 0.3% to 17,479.25. The Cboe Small Companies also lost 0.3%, closing at 14,117.85.
In European equities on Tuesday, the CAC 40 index in Paris closed up 0.1%, though the DAX 40 in Frankfurt lost 0.1%.
In New York, the Dow Jones Industrial Average was down 0.5% at the time of the London equities close. The S&P 500 index was 0.2% lower, while the Nasdaq Composite down 0.1%.
"Investors are facing a dilemma in equities as high inflation will reflect no recession but likely leading to higher interest rates and lower equity valuations," Saxo analyst Peter Garnry commented.
"Equities are priced for perfection...that perfection of no recession, easing inflation, and limited margin pressure among companies is difficult to work out. If China is successful in its reopening and macroeconomic data in the developed world remains that of avoiding a recession then inflation will likely remain higher for longer risking [turning] sticky."
According to the Bureau of Labor Statistics, the US annual inflation rate cooled to 6.4% in January, from 6.5% in December. According to consensus cited by FXStreet, the rate of inflation was expected to ebb to 6.2% last month.
Nonetheless, it was the slowest rate of annual inflation since October 2021.
The dollar traded off intraday lows at the time of the London equities close on Tuesday.
The pound was quoted at USD1.2174 late on Tuesday in London, higher compared to USD1.2133 at the equities close on Monday. The euro stood at USD1.0731, higher against USD1.0718 at the London equities close on Monday. Against the yen, the dollar was trading at JPY132.79, largely unchanged from JPY132.77.
However, the pound and euro had bought as much as USD1.2262 and USD1.0804, respectively, earlier on Tuesday. The greenback had traded as low as JPY131.52, meanwhile.
The pound was initially supported by UK labour market data. The unemployment rate was 3.7% in the UK in the three months from October to December, unchanged from the September to November period, and in line with FXStreet cited expectations.
Annual growth in average total pay, including bonuses, was 5.9%. Excluding bonuses, it was 6.7%. In September to November, annual growth in average total pay, including bonuses, and in regular pay, excluding bonuses, both were 6.4%.
This means pay continued to lag inflation in the UK. Consumer prices rose by 10.5% in December from a year before.
"In the UK, record wage growth raised concerns the UK's own inflation problems might prove stickier than feared ahead of the UK posting its own CPI numbers on Wednesday. However, the Bank of England will likely be hoping the lagged impact of a series of rate increases is yet to fully come through amid growing expectations a rate hike in March will be the last," AJ Bell analyst Russ Mould commented.
In London, soft drink bottler Coca-Cola HBC closed the best blue-chip performer, rising 5.0%.
It posted revenue of EUR9.20 billion for 2022, climbing 28% from EUR7.17 billion. However, pretax profit declined 15% to EUR623.6 million from EUR734.9 million.
Its comparable earnings before interest and tax amounted to EUR929.7 million, up 12% on-year and ahead of the company's own guidance of EUR860 million and EUR900 million.
Telecommunications stocks also supported the FTSE 100. BT Group added 3.1% and Vodafone rose 3.4%.
Late on Monday, Liberty Global said it acquired a 4.9% stake in Vodafone, believing it to be undervalued, though it added it is not considering a takeover offer.
Liberty Global added it was not considering an offer for Vodafone.
Amigo surged 20% as the lender avoided a GBP72.9 million fine from the UK Financial Conduct Authority on the grounds it would cause serious financial hardship.
"A fine would also have threatened Amigo's ability to meet its commitments to a High Court-sanctioned scheme of arrangement, which aims to pay redress to customers," the FCA explained.
The company noted that this marks an "important milestone" for the company, as it brings the legacy issues to a close.
Elsewhere in London, Altitude Group jumped 22% after it said it expects annual earnings to be materially ahead of current market expectations.
The company is an operator of a marketplace for the promotional products industry.
External market consensus for the year ending March 31 is currently revenue of GBP16.5 million and adjusted earnings before interest, tax, depreciation and amortisation of GBP1.5 million.
Brent oil was quoted at USD85.67 a barrel at the time of the closing bell in London, down from USD85.82 late Monday. Gold was quoted at USD1,852.49 an ounce, down slightly from USD1,853.05.
Wednesday's economic calendar has a UK inflation reading at 0700 GMT, before the latest ONS house price index data at 0930 GMT.
The local corporate calendar has annual results from lender Barclays, and half-year numbers from homewares retailer Dunelm and retail investment platform Hargreaves Lansdown.
By Eric Cunha, Alliance News news editor
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