LONDON MARKET CLOSE: FTSE 100 higher as CRH shines, sterling weakens

(Alliance News) - Stocks in London were largely, but tentatively, higher at the close on Thursday, with the FTSE 100 boosted by a strong performance from building materials firm CRH and a weaker pound.

The FTSE 100 index closed up 29.11 points, or 0.4% at 7,944.04 on Thursday. The FTSE 250 ended down 18.95 points, or 0.1%, at 19,851.65. The AIM All-Share closed up 0.75 of a point, or 0.1%, at 861.29.

The Cboe UK 100 ended up 0.4% at 795.08, the Cboe UK 250 closed down 0.1% at 17,403.22, and the Cboe Small Companies ended up 0.3% at 13,922.34.

The pound was quoted at USD1.1949 at the London equities close on Thursday, down from USD1.1994 at the close on Wednesday.

Sterling weakened as the dollar strengthened amid raised expectations for US interest rates.

According to the CME FedWatch tool, there is currently a 31% chance that the US central bank hikes the federal funds rate by 50 basis points this month. A month ago, markets believed there was a 0% chance of that happening, according to the tool.

Chris Turner at ING explained that higher rates would "clearly increase headwinds for risk assets" which would be "dollar bullish".

The euro stood at USD1.0606 at the European equities close Thursday, lower against USD1.0663 at the same time on Wednesday. Against the yen, the dollar was trading at JPY136.75, higher compared to JPY136.15.

Thursday's US jobless claims data supported these 'higher for longer' expectations for the Federal Reserve.

The number of initial claims for US unemployment support fell last week, in another sign of labour market strength.

According to the latest US Department of Labor reading, initial jobless claims for the week ended February 25, this past Saturday, amounted to 190,000. This was down from an unrevised 192,000 the previous week and below FXStreet cited expectations of a rise to 195,000.

Analysts at Oxford Economics said: "The jobless claims data continue to tell the same story: The labor market is too tight to help the Fed in its effort to lower inflation and the data leave the Fed on track to raise interest rates at the next three meetings."

Stocks in New York were largely lower at the London equities close, with the Dow Jones Industrial Average up 0.3%, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.5%.

In the FTSE 100, CRH jumped 8.5% to finish as the best blue-chip performer after it said it will move its primary stock listing to the US from London.

"We have now come to the conclusion that a US primary listing would bring increased commercial, operational and acquisition opportunities for CRH," the company said, adding the move would accelerate its integrated solutions strategy, and provide higher "profitability, returns and cash" for shareholders.

The news was paired with a strong set of annual results.

The building materials company said revenue climbed by 12% to USD32.72 billion in 2022, from USD29.21 billion in 2021, beating Jefferies' estimate of USD32.12 billion. Pretax profit grew 12% to USD3.47 billion from USD3.10 billion.

Meanwhile, Beazley dropped 5.1% to the bottom of the FTSE 100.

The insurer said its underwriting performance landed in line with expectations, with premiums also climbing, though investment losses meant profit fell.

Beazley's pretax profit fell 48% to USD191.0 million from USD369.2 million. A USD179.7 million investment loss, swinging from a gain of USD116.4 million, was largely the cause of profit drop.

Its underwriting performance improved, however. Its combined ratio came in at 89%, better than the 93% achieved in 2021.

For 2023, Beazley once again expects a combined ratio in the "high-80s". It expects "mid-teens" gross written premiums growth and net premiums to rise "in the mid 20s".

In the FTSE 250, Hunting plunged 8.5% on Thursday despite announcing it swung to a profit from operations in 2022.

The oil and gas industry services provider posted revenue of USD725.8 million for 2022, up 39% from USD521.6 million a year ago as its order book multiplied to USD473.0 million from USD211.5 million.

Hunting also swung to profit from operations of USD2.0 million from a loss of USD79.7million, as it raised its final dividend of 13% to 4.5 cents, from 4.0p a year prior.

National Express soared 9.8% as it reported a higher revenue for 2022 but a widened loss due to an impairment of goodwill charge for Madrid-based subsidiary ALSA.

The public transport provider said annual revenue rose 29% year-on-year to GBP2.81 billion from GBP2.17 billion, though its pretax loss widened to GBP209.9 million from GBP84.9 million.

Meanwhile, underlying pretax profit jumped to GBP145.9 million from GBP39.7 million.

Elsewhere in London, Saga fell 4.2% as the over-50s travel operator said it has terminated discussions with Australia's Open Insurance Technologies about a potential sale of Acromas Insurance, the underwriter of Saga's wider insurance business.

In European equities on Thursday, the CAC 40 in Paris ended 0.7% higher, while the DAX 40 in Frankfurt ended up 0.2%.

Inflation eased by less than expected in the eurozone last month, while core inflation unexpectedly heated up.

According to Eurostat, eurozone harmonised inflation eased just slightly to 8.5% in February, from 8.6% in January. This was higher than expected, with FXStreet-cited market consensus of 8.2%.

On a monthly basis, harmonised prices rose 0.8% in February, more than reversing a 0.2% fall the previous month.

Core inflation - which excludes energy, food, alcohol & tobacco - ticked up to 5.6% annually, from 5.3% in January. This was ahead of market consensus that it would remain unchanged at 5.3%.

Deutsche Bank Research senior economist Peter Sidorov said: "Europe's high inflation problem is showing no signs of easing yet. With ongoing high underlying inflation and food inflation, and no signs of the tight labour market weakening, the ECB is unlikely to end its rate hiking cycle any time soon."

Brent oil was quoted at USD84.84 a barrel at the London equities close on Thursday, up from USD83.78 late Wednesday. Gold was quoted at USD1,837.58 an ounce, down slightly from USD1,838.50.

In Friday's UK corporate calendar, there are full-year results from education publisher Pearson and online property portal Rightmove.

In the economic calendar, there are a slew of services PMI readings, with prints from the EU, US, and the UK.

By Heather Rydings, Alliance News senior economics reporter

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