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(Alliance News) - The FTSE 100 was slightly lower at midday in London, with a red-hot eurozone inflation reading and hawkish comments from US monetary policymakers hurting investor sentiment.
The FTSE 100 index was down 8.25 points, 0.1%, at 7,906.68. The FTSE 250 was down 4.87 points, at 19,865.73, and the AIM All-Share was down 0.28 points at 860.26.
The Cboe UK 100 was down 0.1% at 790.88, the Cboe UK 250 was flat at 17,421.26, and the Cboe Small Companies was up 0.1% at 14,188.78.
The pound was quoted at USD1.1980 at midday on Thursday in London, down compared to USD1.1994 at the equities close on Wednesday.
The pound had dropped below the USD1.20 mark, following comments from Bank of England Governor Andrew Bailey.
In a speech on Wednesday, Bailey said "nothing is decided" as far as interest rates go, and markets shouldn't assume more interest rate hikes are on the way.
"At this stage, I would caution against suggesting either that we are done with increasing bank rate, or that we will inevitably need to do more. Some further increase in bank rate may turn out to be appropriate, but nothing is decided," Bailey said.
Last month, the BoE lifted the bank rate by 50 basis points to 4.00% from 3.50%. It next decides on interest rates on March 23.
Central bankers in the US were also in focus.
"Fed's Neel Kashkari, who was once one of the most dovish Fed members, said that he may back a 50bp at this month's FOMC meeting, while Raphael Bostic said that the Fed should hike the rates to 5-5.25% territory, and keep them there until next year," Swissquote Bank analyst Ipek Ozkardeskaya commented.
"Activity on Fed funds futures now gives more than 30% chance for a 50bp hike at the next meeting, and Fed swaps price in a peak Fed rate of around 5.5%. This number was around 4.9% at the start of the year."
The comments followed some disappointing manufacturing data in the US.
The seasonally adjusted S&P Global US manufacturing purchasing managers' index posted 47.3 in February, up slightly from 46.9 in January, but down from the flash estimate of 47.8.
While still in contractionary territory, ISM's February manufacturing PMI reading was higher at 47.7% compared to 47.4% in January.
Stocks in New York were called mostly lower on Thursday. The S&P 500 is called down 0.6% and the Nasdaq Composite is called down 0.8%. However, the Dow Jones Industrial Average is called up 0.1%.
In European equities on Thursday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.4%.
Inflation eased by less than expected in the eurozone last month, according to preliminary figures, while core inflation unexpectedly shot up.
According to Eurostat, the eurozone's yearly inflation eased just slightly to 8.5% in February, from 8.6% in January.
This was higher than expected, according to FXStreet-cited market consensus of 8.2%.
On a monthly basis, prices rose 0.8% in February, more than reversing a 0.2% fall the previous month.
Core inflation - which excludes energy, food, alcohol and tobacco - ticked up to 5.6% annually, from 5.3% in January. This was also ahead of market consensus that it would remain unchanged at 5.3%.
In other news, Eurostat said the unemployment rate in the eurozone in January was unchanged from December at 6.7%. December's figure was upwardly revised from 6.6%. In January of 2022, unemployment was at 6.9%.
The euro stood at USD1.0628 midday Thursday, down against USD1.0663 on Wednesday. Against the yen, the dollar was trading at JPY136.68, up compared to JPY136.15.
In the FTSE 100, CRH jumped 9.5% making it the best performer. Its stint on the index may soon come to an end, however.
The Dublin-based building materials company said revenue climbed by 12% to USD32.72 billion in 2022 from USD29.21 billion in 2021. This beat a Jefferies estimate of USD32.12 billion.
In the Americas Materials division, sales were up 15% on 2021. In Building Products, sales were up 26%. Sales in Europe Materials were in line with a year earlier.
Pretax profit grew 12% to USD3.47 billion from USD3.10 billion. Operating profit increased 17% to USD3.89 billion from USD3.33 billion.
Chief Executive Officer Albert Manifold said: "Our 2022 performance reflects the outstanding commitment of our people, the underlying strength and resilience of our business and the continued delivery of our integrated, solutions-focused strategy. Despite significant cost pressures throughout the year, we delivered further improvements in profits, margins and returns."
CRH proposed a final dividend of USD1.03 per share, taking the total dividend for 2022 to USD1.27, up 5.0% from USD1.21 a year prior.
The company also said it plans to substantially increase its stock buyback programme through the repurchase of up to USD3 billion of shares over the next 12 months.
Looking ahead, CRH said it expects resilient demand and increased pricing in 2023 despite macroeconomic uncertainties and ongoing cost inflation.
Alongside the strong set of annual results, CRH announced it will move its primary listing to the US during 2023.
"We have now come to the conclusion that a US primary listing would bring increased commercial, operational and acquisition opportunities for CRH," the company said.
CRH said the move would accelerate its integrated solutions strategy, and provide higher "profitability, returns and cash" for shareholders.
CRH said it will remain headquartered in Ireland. However, a US primary listing will remove CRH from the FTSE 100 index.
"In the coming weeks we will outline to our shareholders why we are recommending that it is in the best interests of our business and our shareholders to pursue a primary listing of CRH, together with US equity index inclusion as soon as possible," the company said.
CRH said it will provide an update with its planned trading statement on April 26.
It represents a blow for London's capital market and it followed a Financial Times report which stated that SoftBank's Arm, a chip designer, has ruled out listing in London.
FTSE 100 constituent Beazley lost 9.0%.
The insurer said gross premiums written in 2022 rose 14% to USD5.27 billion from USD4.62 billion in 2021. Net premiums written, which deducts premiums ceded to reinsurers, grew at a slower pace. Net premiums were 10% higher at USD3.88 billion from USD3.51 billion.
Its pretax profit, however, fell 48% to USD191.0 million from USD369.2 million.
A USD179.7 million investment loss, swinging from a gain of USD116.4 million, was largely the cause of profit drop.
Its underwriting performance improved. Its combined ratio came in at 89%, better than the 93% achieved in 2021. Beazley said it saw its "strongest year-end underwriting performance since 2016".
The company lifted its annual dividend by 4.7% to 13.5 pence per share from 12.9p.
For 2023, Beazley once again expects a combined ratio in the "high-80s". It expects "mid-teens" gross written premiums growth and net premiums to rise "in the mid 20s".
In the FTSE 250 index, National Express jumped 14%, after it reported a higher revenue for 2022.
The Birmingham-based public transport provider said annual revenue rose 29% year-on-year to GBP2.81 billion from GBP2.17 billion, though its pretax loss widened to GBP209.9 million from GBP84.9 million.
The company said the statutory loss was higher due to a GBP261 million non-cash impairment of goodwill in ALSA, a company operating long distance bus and coach services in Spain, Morocco, Portugal, Switzerland and France, bought by National Express in 2005.
Meanwhile, underlying pretax profit jumped to GBP145.9 million from GBP39.7 million.
"A relentless focus on operational leverage, cost discipline and successful pricing actions has underpinned a recovery in [underlying] profit and margin as well as in the return on capital employed," National Express said.
National Express reinstated its dividend with a 5.0p per share "reflecting confidence in the future".
Its expectations for 2023 are unchanged, and it has "clear and robust actions in place" to mitigate macroeconomic headwinds and cut costs.
On AIM, Totally plunged 26%.
The healthcare services provider said it expects earnings before interest, tax, depreciation and amortisation to be around GBP6.3 million, which is below market consensus.
"The company has...been impacted by the combined impact of high inflation, national strikes, which increase pressure on services and scheduling, and clinical workforce shortages which increase reliance on agency staff for the delivery of urgent care services," Totally explained.
Brent oil was quoted at USD84.82 a barrel at midday in London on Thursday, up from USD83.50 late Wednesday. Gold was quoted at USD1,836.32 an ounce, up against USD1,827.19.
Still to come on Thursday's economic calendar, the latest US weekly unemployment claims report is posted at 1330 GMT. The Bank of England Chief Economist Huw Pill is scheduled to speak at 1500 GMT.
By Sophie Rose, Alliance News reporter
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