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(Alliance News) - European equities kicked off Wednesday largely on the front foot, picking up the baton after US stocks resumed an "inexorable march" on Tuesday, after shaking off a hot US inflation reading.
The FTSE 100 underperformed, with the bulk of Wednesday morning's bullishness being seen in Frankfurt and Paris, where blue-chip benchmarks hit record highs.
The FTSE 100 index slipped just 1.19 of a point to 7,746.62. The FTSE 250 climbed 43.76 points, 0.2%, at 19,608.97, though the AIM All-Share added 3.56 points, 0.5%, at 741.60.
The Cboe UK 100 was flat at 775.83, the Cboe UK 250 added 0.1% at 16,991.74, and the Cboe Small Companies barely budged, sitting at 14,730.81 points.
In European equities on Wednesday, the CAC 40 in Paris and DAX 40 in Frankfurt each rose 0.2%, with the latter topping 18,000 points for the first time. The CAC 40 also traded around at a record level. It achieved a landmark of its own earlier this month, topping the 8,000 point threshold.
In New York on Tuesday, the Dow Jones Industrial Average ended up 0.6%, the S&P 500 surged 1.1% and the Nasdaq Composite jumped 1.5%.
Stocks in New York climbed strongly despite robust US inflation data. The Bureau of Labor Statistics said the pace of year-on-year consumer price growth picked up to 3.2% in February, from 3.1% in January, where it had been expected to remain, according to FXStreet cited consensus.
"US markets resumed their seemingly inexorable march higher despite an inflation reading which came in slightly hotter than expected," interactive investor analyst Richard Hunter commented.
"Despite an initially mixed reaction to the prints, investors chose to focus on the more general direction of travel, which is currently signalling the ideal outcome of inflation being overcome without undue damage to the economy. In addition, without currently higher shelter and fuel costs, the inflation picture would be tending towards benign. The net result of investor deliberations was that a cut in interest rates remains on the table for June, notwithstanding the Federal Reserve having urged over recent months that any decision will remain data dependent."
In Asia on Wednesday, the Nikkei 225 in Tokyo fell 0.3%, while the Shanghai Composite lost 0.4%. The Hang Seng in Hong Kong ended 0.1% lower. Over in Sydney, the S&P/ASX 200 added 0.2%.
The pound climbed to USD1.2797 early Wednesday in London, from USD1.2783 at the time of the London equities close on Tuesday. The euro rose to USD1.0929 from USD1.0916. Against the yen, the dollar traded at JPY147.78, largely flat from JPY147.76.
According to the Office for National Statistics, UK gross domestic product expanded 0.2% on-month in January, in line with FXStreet cited consensus. UK GDP had shrunk 0.1% in December from November.
Numbers last month had showed the UK economy slipped into recession in the three months to December.
UK gross domestic product slumped 0.3% in the fourth quarter of 2023 from the third quarter, according to figures from the ONS. The UK economy already had declined 0.1% in the third quarter from the second.
Wealth Club analyst Nicholas Hyett commented: "A stronger month for the dominant consumer sector, particularly consumer facing services, together with a pick up in construction activity means the UK economy is back in growth in January – albeit modest. That was despite some disruption to global supply trains from conflict in the Middle East and Red Sea, and the impact of strikes in healthcare, railways and the Screen Actors Guild – all of which dented overall output.
"Overall performance is in line with market expectations, so unlikely to cause a major move in markets. But, if the return to growth can be sustained the country should be on course to exit recession in pretty short order – a relief for the government even if the man or woman on the street is unlikely to notice the difference between anaemic growth and mild recession."
In London, shares in bookmakers Flutter and Entain moved in opposite directions. Paddy Power owner Flutter was up 1.6%, while Entain gave back 1.2%.
JPMorgan cut Ladbrokes owner Entain to 'neutral', but lifted Flutter to 'overweight'.
Balfour Beatty surged 9.4% as it announced a new share buyback.
The infrastructure firm said revenue in 2023, including joint-ventures and associates, climbed 7.4% to GBP9.60 billion from GBP8.93 billion in 2022. Statutory revenue, which excludes those items, was 4.8% higher at GBP7.99 billion from GBP7.63 billion.
Pretax profit, however, was 15% lower at GBP244 million from GBP287 million.
Balfour lifted its final dividend by 14% to 8.0 pence from 7.0p. It meant its annual dividend was 10% higher at 11.5p from 10.5p. In addition, it said it plans to repurchase GBP100 million of its stock during the 2024 phase of its share buyback programme.
Chief Executive Leo Quinn said: "The board remains confident in Balfour Beatty's ongoing ability to deliver sustainable cash generation for significant shareholder returns, with growth from our earnings-based businesses in 2024 underpinned by the strength of the group's order book. Looking to 2025 and beyond, we expect our unique capabilities and complex infrastructure project experience to drive further earnings growth, with attractive opportunities being pursued in the UK energy, transport and defence markets and in the US."
Keywords Studios rose 8.4% after reporting improved annual revenue, during what was a tricky year for the video game industry.
Keywords said revenue last year rose 13% to EUR780.4 million from EUR690.7 million.
The provider of technical and creative services for video game production said pretax profit declined 49% to EUR35.0 million from EUR68.0 million. Administrative expenses were 28% higher at EUR252.3 million. Adjusted pretax profit, which strips out some of those costs, was 2.4% higher at EUR114.7 million.
Chief Executive Officer Bertrand Bodson said: "In what was a difficult year for the industry, we delivered resilient performance in 2023 and continued to extend our market leadership position, reflecting our role as a diversified enabler of the industry." The CEO added: "We made considerable progress against our strategic objectives and delivered a record year of M&A, bringing greater exposure to higher growth and margin Create services, and have an extensive pipeline of acquisitions in 2024. We will continue to successfully navigate the current market conditions and are excited by the opportunities that lie ahead as we deliver against our plans and become a +EUR1 billion revenue business in the coming years."
Elsewhere, Ixico plunged 21% as it flagged delays to some contracts. The neuroscience focused advanced analytics company said its financial first half has been marred by "longer contracting cycles and postponements of certain new contracts to later in the year" or the next one. Ixico's financial year ends on September 30.
Ixico said delays to some project start dates are likely to mean revenue for financial 2024 totals GBP5.2 million to GBP5.9 million. Revenue in the prior year amounted to GBP6.7 million.
CEO Giulio Cerroni said: "Whilst anticipating a challenging first half year of trading, we had expected higher levels of new contract bookings, especially from biotech sponsors, which have not yet materialised, primarily due to client-led delays."
Brent oil was quoted at USD82.04 a barrel early Wednesday, down from USD82.49 at the time of the London equities close Tuesday. Gold was quoted at USD2,158.83 an ounce, down from USD2,163.49.
Still to come on Wednesday is a eurozone industrial production reading at 1000 GMT.
By Eric Cunha, Alliance News news editor
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