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(Alliance News) - London's FTSE 100 was the glaring laggard on a day when European stocks were supported by a favourable US factory gate inflation reading.
Putting pressure on the FTSE, stacked with firms that count earnings in dollars, was a stronger pound. Cable rose above the USD1.20 mark for the first time since August.
The FTSE 100 index ended 15.73 points lower, 0.2%, at 7,369.44 on Tuesday. The FTSE 250 ended down 166.37 points, or 0.9%, at 19,455.88, and the AIM All-Share ended down 3.09 points, 0.4%, at 848.46.
The Cboe UK 100 ended down 0.4% at 735.82. The Cboe UK 250 closed down 0.9% at 16,777.63, while the Cboe Small Companies closed down 0.6% at 12,877.10.
Stocks on the continent were higher. The CAC 40 index in Paris and DAX 40 in Frankfurt each rose 0.5%.
The pound was quoted at USD1.1891 late on Tuesday afternoon in London, up from USD1.1714 late Monday. The euro traded at USD1.0385, up from USD1.0334 late Monday. Against the yen, the dollar was quoted at JPY139.16, down from JPY140.45.
Stocks in New York were higher on Tuesday. The Dow Jones Industrial Average was 0.7% higher, the S&P 500 jumped 1.3% and the Nasdaq Composite surged 2.2%.
Equities largely rose, but the dollar weakened after a cooler-than-expected US producer price reading.
The greenback had a decent start to the week, as selling pressure stemming from a cooler-than-expected consumer price inflation reading last week eased.
A similarly cool factory gate inflation put the heat on the dollar once again on Tuesday, however.
Upward pressure on US producer prices eased last month, figures from the Bureau of Labor Statistics showed.
The producer price index for final demand rose by 0.2% in October from September, the same monthly rise as seen in September. In August, PPI had been flat on the month before.
On an annual basis, PPI inflation was 8.0% in October, slowing from 8.4% in September. Annual producer price inflation has slowed each month since June, when it stood at 11.2%. The recent peak was 11.7% in March.
"The US dollar was already on the back foot leading up to today’s US PPI report, with the weaker than expected number giving the greenback another nudge to the downside, with the pound being amongst one of the main beneficiaries, rising close to a 3-month high," CMC Markets analyst Michael Hewson commented.
"While Fed officials have been at pains to push back on the narrative that inflation may well have peaked the numbers appear to be speaking for themselves. Not only has CPI been falling since the summer, but so has PPI and while core prices do appear to have been slightly stickier, these are also falling as well. Fed officials may well be urging caution but investors already appear to have made up their minds, with yields falling and the US dollar lower."
The stronger pound put pressure on the FTSE 100 in London.
A share price slide for Vodafone also did. Chief Executive Nick Read said the telecommunications firm is taking a number of steps to mitigate the "economic backdrop of higher energy costs and rising inflation".
Vodafone lowered its full-year outlook for adjusted earnings before interest, tax, depreciation, and amortization and special losses to between EUR15.0 billion and EUR15.2 billion. Previously, it had guided between EUR15.0 billion and EUR15.5 billion.
Vodafone shares fell 7.7%.
Also falling, Ocado gave back a hefty 7.2%. The stock went into Tuesday's session up roughly 95% since the start of last month. Shares have been supported recently by a partnership with Lotte Shopping, the largest retail affiliate of the South Korean conglomerate Lotte Group.
The deal was announced at the start of November.
On the up, however, Card Factory jumped 15%. It upped annual profit guidance on a better-than-expected second half so far.
Like-for-like sales are up 6.2% in the year-to-date, driven by "strong" in-store performances. Card Factory said both its online business and commercial partnerships have performed in line with expectations.
Card Factory now expects pretax profit to multiply to GBP37.5 million in the year ending January 31, from GBP11.1 million in 2022.
Earnings before interest, taxes, depreciation, and amortisation is expected to hit GBP96.0 million, beating current consensus of GBP88.8 million, the greeting cards, gifts, wrap and gift bags seller said.
Speedy Hire shares fell 7.5% as the Merseyside-based tools hire services firm reported that its profit had fallen in the first half of the year due to inflationary pressures on its cost base.
Nonetheless, Speedy Hire said it remained confident for its full year results.
"Revenue growth is continuing with new contract wins, the effect of actions taken on price and a healthy pipeline of customer activity which gives confidence for further growth in the second half," said Chief Executive Dan Evans, though he cautioned that the macroeconomic outlook remained uncertain and inflationary pressures were high.
Gold was priced at USD1,770.82 an ounce late Tuesday in London, up sharply from USD1,758.52 late Monday. Brent oil fetched USD93.03 a barrel, down from USD94.44.
Wednesday's economic calendar has a UK inflation reading at 0700 GMT, before a house price index at 0930 GMT. Retail sales data from the US is reported at 1330 GMT.
The local corporate calendar has half-year results from property investor British Land, energy company SSE and annual results from Sage Group.
By Eric Cunha; ericcunha@alliancenews.com
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