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(Alliance News) - Stock prices in London were mixed at midday Tuesday, despite data showing that the UK service sector continued to grow in February, with focus turning to what Wednesday's budget from Chancellor Jeremy Hunt has in store.
In the US, there are also monetary policy and political developments investors will have an eye on. Federal Reserve Chair Jerome Powell testifies in front of Congress on Wednesday. On the political front, 'Super Tuesday' could see former president Donald Trump move ever closer to securing the Republican US presidential nomination.
The FTSE 100 index was up just 2.15 points at 7,642.48. The FTSE 250 was up 31.80 points, 0.2%, at 19,280.88, and the AIM All-Share was down 1.75 points, 0.2%, at 735.94.
The Cboe UK 100 was up 0.1% at 765.54, the Cboe UK 250 was up 0.2% at 16,622.65, and the Cboe Small Companies was down 0.5% at 14,418.50.
In European equities on Tuesday, the CAC 40 in Paris was down marginally, while the DAX 40 in Frankfurt fell 0.1%.
So far on Tuesday, there has been a slew of PMI data to digest from across the globe. Notably, the UK service sector continued to grow in February, but at a slower rate.
The S&P Global UK services business activity index posted 53.8 points in February, down from 54.3 points in January. It was also lower than the earlier 'flash' reading of 54.3 points.
The index has now posted above the crucial 50.0 no-change value for four months in a row. Further, S&P noted that the index was still higher than at any time in the second half of 2023.
Tim Moore, economics director at S&P Global Market Intelligence, said: "Another solid expansion of business activity across the service sector in February adds to signs that the UK economy has turned a corner after entering a technical recession during the second half of 2023."
The seasonally adjusted S&P Global UK composite PMI registered 53.0 points in February, up from 52.9 points in January. This was also lower than the earlier 'flash' reading 53.3.
In the eurozone, the PMI edged closer to growth territory thanks to the service sector.
The latest HCOB services purchasing managers' index posted at 50.2 points in February, up from 48.4 points in January and improved from the flash reading for February of 50.0 points, the neutral score.
The HCOB eurozone composite PMI was 49.2 points in February, up from 47.9 points in January. It remained below the 50-point no-change mark, but marked an eight month higher. It also was above the flash reading for February of 48.9 points.
Still to come on Tuesday, there is a PMI reading from the US at 1445 GMT.
Attention will then promptly turn to Wednesday, which will see the start of a key few days on the fiscal and monetary policy fronts.
A pre-election budget will be the key event in the UK this week. On Wednesday, eyes will be on whether UK Chancellor Jeremy Hunt will size up some tax relief. In the eurozone, focus will be on the European Central Bank's interest rate decision on Thursday. In the US, the latest jobs report on Friday will be the main event.
The pound was quoted at USD1.2687 at midday on Tuesday in London, lower compared to USD1.2696 at the equities close on Monday. The euro stood at USD1.0851, down against USD1.0858. Against the yen, the dollar was trading at JPY150.39, lower compared to JPY150.51.
The FTSE 100 was bookended by Intertek and Ashtead.
Intertek rose 7.2%.
The London-based consumer product testing and certification agency reported that revenue in 2023 rose 4.3% to GBP3.33 billion from GBP3.19 billion a year earlier. Pretax profit edged up 0.6% to GBP422.3 million from GBP419.8 million.
On the back of the results, Intertek proposed a final dividend of 74.0p per share, up from 71.6p. This brings the full year dividend up 5.6% annually to 111.7p.
Ashtead, meanwhile, lost 4.4%.
Ashtead reported pretax profit of USD442.0 million for the three months that ended January 31, down 12% from USD505.1 million a year before. On an adjusted basis, excluding amortisation, pretax profit was USD473.0 million, down 11% from USD534.7 million.
Total revenue was USD2.66 billion, up 9.5% from USD2.43 billion, as rental revenue rose by 9.4% to USD2.36 billion from USD2.19 billion.
For the lower profit in the third quarter, Ashtead cited a higher depreciation charge relative to revenue growth due to lower utilisation of a larger fleet of equipment. It also paid higher financing costs.
In the FTSE 250, Spirent Communications shot up 59%, after it agreed a GBP1.01 billion takeover by Viavi Solutions.
The Crawley, England-based automated test and assurance solutions provider said the all-cash offer was for 175 pence per share, comprising 172.5p cash and a 2.5p special dividend. It values Spirent's entire equity at GBP1.01 billion.
Viavi Solutions is a Chandler, Arizona-based manufacturer of testing and monitoring equipment for networks. It is traded on Nasdaq in New York and has a market value of USD2.17 billion.
Spirent Chief Executive Eric Updyke said: "The combination of the Viavi group and the Spirent group creates a stronger business that will be better able to compete in what remains a challenging market environment and we are confident in the opportunities this will bring for many of our stakeholders."
Amongst London's small-caps, Reach rose 14%.
The newspaper publisher reports that in the 53 weeks ended December 31, revenue fell 5.4% to GBP568.6 million from GBP601.4 million a year earlier. Pretax profit fell to GBP36.7 million from GBP66.2 million. Reach kept its dividend unchanged at 7.34p.
Chief Executive Jim Mullen says: "This year we have successfully gained clarity on two significant long-term uncertainties in pension funding and Historical Legal Issues. With the end of these issues in sight, we have significantly reduced our obligations and have a clear path forward for the business."
On London's AIM, Active Energy rocketed 93%.
The biomass-focused renewable energy company's shares rose after it said it has reached a settlement agreement with Player Design. The PDI parties have agreed to pay Active Energy a cash payment of USD1.7 million by no later than March 5.
"Active Energy retains complete ownership of all its original patents on the steam explosion process, including all production knowledge acquired from the former production activities at the Ashland facility applicable for its future production methods for biomass products. In addition, both Active Energy and the PDI Parties have terminated all current legal claims against each other," it added.
Stocks in New York were called lower in a key day for US politics. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 index down 0.3%, and the Nasdaq Composite down 0.7%.
"Super Tuesday" – the primary cycle's largest single day of voting, with contests in 15 states and one territory – is historically a defining moment in the race for the presidential nomination.
Trump is expected to continue his sweep of Republican primary states, closing the door on sole remaining challenger Nikki Haley.
US President Joe Biden, who trails Trump in most swing state polls for the general election, has his own primary contest on the Democratic side, but his victory is considered a formality.
Brent oil was quoted at USD82.82 a barrel at midday in London on Tuesday, down from USD83.37 late Monday. Gold was quoted at USD2,123.89 an ounce, higher against USD2,116.16.
By Sophie Rose, Alliance News senior reporter
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