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(Alliance News) - Trading remained cautious in Europe at midday on Thursday, with an equally indifferent open seen in the US, as investors remained in 'wait and see mode' ahead of the European Central Bank and a glut of US bank earnings.
"Several big US banks are due to report across the Atlantic, while the latest brush strokes in the global interest rate picture will be painted by the European Central Bank later as it meets to decide whether to follow the Bank of England and US Federal Reserve in hiking rates," Danni Hewson, financial analyst at AJ Bell, said.
The decision from the ECB is at 1245 BST, and following this will be a press conference with President Christine Lagarde at 1330 BST. While, concurrently, earnings are due from US banks Wells Fargo, Goldman Sachs, Morgan Stanley and Citi before the New York market open on Thursday.
Hewson continued: "The expectation is that ECB chief Christine Lagarde and her colleagues will sit on their hands but the runaway nature of inflation in the Eurozone is bringing considerable pressure to bear on the central bank."
The pound was quoted at USD1.3129 midday Thursday, up from USD1.3060 at the London equities close on Wednesday. The euro was priced at USD1.0905, higher from USD1.0863.
The FTSE 100 index was down 4.40 points, or 0.1%, at 7,576.40 midday Thursday. The mid-cap FTSE 250 index was down just 0.17 of a point at 20,984.28, while the AIM All-Share index was up 0.88 of a point, or 0.1%, at 1,057.69.
The Cboe UK 100 index was up 0.1% at 754.82. The Cboe 250 was up 0.2% at 18,472.19, and the Cboe Small Companies down 0.2% at 15,387.67.
In mainland Europe, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.1%.
Stocks in New York were pointed to a positive muted on Thursday. The Dow Jones Industrial Average was seen up 0.2%, while the S&P 500 and the Nasdaq Composite were both seen opening flat.
"Despite the tailwind of a US market which flew higher amid strong numbers for Delta Airlines, the FTSE 100 was firmly grounded ahead of the Easter break, trading modestly lower on Thursday morning," AJ Bell's Hewson said.
"The top riser was British Airways owner International Consolidated Airlines which took heart from Delta's update, which suggests people are prioritising air travel despite the pressures on their finances. After so long of having their travel restricted, it seems the appeal of jetting away is very strong."
IAG was up 3.0% around midday in London.
Adding to the upbeat mood in the travel sector, Wizz Air expects a widened annual loss but is preparing for strong demand over the upcoming summer season.
Wizz Air was up 7.2% - at the top of the FTSE 250 - and budget airline peer easyJet was up 3.1%.
In the final three months of Wizz's financial year, ended March 31, it expects to report an operating loss between EUR190 million and EUR210 million - which would beat previous expectations, thanks to a "stronger trading environment".
For the full-year, however, its net loss is guided between EUR632 million and EUR652 million, which would be widened from the EUR576.0 million posted for the 2021 financial year - which was its first annual loss since 2012.
To begin financial 2023, Wizz said it is ramping up operations for a "busy" summer programme with the firm expecting to operate available seat kilometres 30% ahead of the April to June 2019 quarter and more than 40% ahead of the July to September 2019 quarter.
"We have been encouraged by demand trends in recent weeks and given the shorter booking horizon expect the bookings for this summer to build significantly after Easter," the airline added.
Dunelm advanced 1.7%. It reported a substantial increase in sales in its third quarter, due to the reopening of its stores, leading the firm to confirm its confidence in meeting market expectations for annual profit.
The Leicester, England-based home furnishings retailer said total sales rose 69% year-on-year to GBP399 million in the 13 weeks to March 26, with year-to-date sales up 25% at GBP1.20 billion. Dunelm explained that its store estate was closed in the comparable quarter last year, leaving only click & collect and home delivery services were available to customers.
Versus two years ago, third quarter sales were up 20%.
The company continues to expect that its pretax profit for financial 2022 will be in line with the latest market expectations. It noted that the latest range of analyst forecasts puts its pretax profit between GBP195 million to GBP215 million, with the consensus at GBP207 million. In financial 2021, it posted a pretax profit of GBP157.8 million.
The company said its gross margin in the third quarter increased by 30 basis points year-on-year, and was better than expected due to a slightly lower proportion of sales from discounted lines during the Winter Sale.
Heading in the opposite direction, emerging markets asset manager Ashmore shed 3.7%.
Assets under management declined by USD9.0 billion over its third quarter due to market volatility as a result of the conflict in Ukraine. Ashmore said assets under management fell 10% to USD78.3 billion at the end of March from USD87.3 billion at the end of December.
The FTSE 250 company explained that this reflects a negative investment performance of USD5 billion and USD3.7 billion of net outflows. It blamed the performance on lower market levels in response to Russia's invasion of Ukraine and "some institutional rebalancing."
In London's junior market, Renold jumped 33% after its strong momentum in order intake and turnover continued the second half of the year ended March 31, delivering full-year revenue of GBP195.0 million.
The Derby, England-based supplier of industrial chains and power transmission products noted this represents a 18% increase on the previous year.
Its order intake rose 32% to GBP223.7 million, and, as a result, expects underlying trading profit ahead of expectations.
Brent was quoted at USD106.92 a barrel on Thursday midday, up versus USD106.79 at the time of the equity market close in London on Wednesday.
Gold stood at USD1,970.10 an ounce, lower against USD1,977.64 late Wednesday.
Against the yen, the dollar was trading at JPY125.31 midday Thursday, down from JPY125.69.
By Paul McGowan; paulmcgowan@alliancenews.com
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