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(Alliance News) - London's FTSE 100 was steady at midday Tuesday, as investors look ahead to risk events in the form of a UK inflation reading and a Bank of England interest rate decision later this week.
The FTSE 100 index was down just 0.1 of a point at 7,588.37. The FTSE 250 was down 125.05 points, 0.7%, at 18,729.24, and the AIM All-Share was down 2.38 points, 0.3%, at 787.15.
The Cboe UK 100 was flat at 756.96, the Cboe UK 250 was down 0.7% at 16,394.18, and the Cboe Small Companies was down 0.1% at 13,861.04.
"The rest of the week could be more challenging for UK stocks with inflation figures out tomorrow, followed by the next UK interest rate decision on Thursday. A rate hike to 4.75% looks highly likely," AJ Bell analyst Russ Mould commented.
The next key market catalyst will come in the form of UK inflation data on Wednesday morning, which may frame the Bank of England interest rate decision on Thursday. The central bank is expected to enact a 25 basis point hike.
The pound was quoted at USD1.2767 at midday on Tuesday in London, down compared to USD1.2797 at the equities close on Monday. The euro stood at USD1.0932, up slightly against USD1.0928. Against the yen, the dollar was trading at JPY141.44, down compared to JPY141.85.
After a trio of major central bank decisions last week, China's central bank cut two benchmark interest rates on Tuesday, as part of measures to boost economic growth in the nation.
The one-year loan prime rate, which serves as a benchmark for corporate loans, was reduced to 3.55% from 3.65%, the People's Bank of China said in a statement, while the five-year LPR, which is used to price mortgages, was cut to 4.20% from 4.30%.
Sticking with central banks, eyes will be on Federal Reserve Chair Jerome Powell on Wednesday, who testifies before US lawmakers.
In European equities on Tuesday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.6%.
Stocks in New York, reopening after the Juneteenth public holiday on Monday, are called lowed. The Dow Jones Industrial Average and the S&P 500 index are both called down 0.4%, while the Nasdaq Composite is called down 0.5%.
In the FTSE 100, Ocado shed 4.9% on a bearish note from JPMorgan.
JPMorgan analysts said: "We believe Ocado's online grocery activities will continue to face meaningful headwinds in the next months." It noted that UK consumers may turn to discount chains as cost-of-living worries persist.
JPMorgan rates Ocado at 'underweight' and has Ocado under 'negative catalyst watch' into the firm's half-year results on July 18.
Frasers was up 0.5%. It continued its streak of buying up shares in UK retail outfits, with a regulatory filing showing it has taken up a position in online fashion firm boohoo group.
Frasers, which owns, House of Fraser, Sports Direct and Flannels retail chains, has a stake of 5.0% in boohoo.
The announcement on Tuesday came hours after a filing showed Frasers has built an 8.9% stake in London-based electronics and electrical goods retailer Currys. Currys was up 2.0% at midday, while boohoo was down 0.8%.
Frasers said that the stake acquisitions are part of a wider strategy of taking up "supportive shareholder positions in attractive retail companies".
"Frasers Group is putting its fingers into more retail pies snapping up slices of companies which have proved unappetizing for investors in recent years. boohoo and Curry's have struggled with falling sales as the cost-of-living crisis affects discretionary spending, but Frasers Group clearly sees significant value in both companies, once inflationary winds die down. It also bought up a stake in AO World, the electrical retailer hit by the post-pandemic shifts in spending, which has been showing positive signs from its turnaround strategy. Frasers has also upped its stake in Asos just as its plan to return to profits appears to be bearing some fruit, after being sideswiped by fashion fans' reluctance to splash the cash as they tighten their belts," Hargreaves Lansdown analyst Susannah Streeter commented.
Automotive retail and service group Lookers said it has agreed to a takeover offer from Global Auto Holdings of 120 pence a share in cash, which values the firm at GBP465.4 million.
The offer is a 35% premium to the closing price of 88.7p on Monday. Global Auto is a related party to Alpha Auto Group, a private Canada-headquarter operator and consolidator of auto retail dealerships across North America.
The board of Lookers said they believe the offer represents a "compelling proposition" for the firm's shareholders, and will unanimously recommend the offer at an upcoming court meeting and general meeting.
Shares in Lookers were up 34% to 118.50 pence at midday.
Bidstack shares fell 33%, after it reported an increase in annual administrative costs offset revenue growth for 2022.
The in-game advertising firm said that in 2022, its pretax loss widened 10% to GBP8.8 million from GBP8.0 million a year prior. Revenue more than doubled to GBP5.3 million from GBP2.6 million.
However, administrative costs increased 45% to GBP12.5 million from GBP8.7 million. Cost of sales decreased 11% to GBP1.5 million from GBP1.7 million.
Brent oil was quoted at USD76.74 a barrel at midday in London on Tuesday, up from USD76.02 late Monday. Gold was quoted at USD1,951.71 an ounce, down slightly against USD1,952.97.
Still to come on Tuesday's economic calendar, there is a US housing starts and building permits reading at 1330 BST.
By Sophie Rose, Alliance News reporter
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