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LONDON MARKET CLOSE: FTSE 100 treads water ahead of US CPI reading

Mon, 12th Feb 2024 16:51

(Alliance News) - Stock prices in London closed higher on Monday, ahead of some key inflation data from the US, as well as a slew of UK economic data.

The FTSE 100 index closed up 1.11 points at 7,573.69. The FTSE 250 ended up 141.61 points, 0.7%, at 19,203.93, and the AIM All-Share closed up 2.77 points, 0.4%, at 750.18.

The Cboe UK 100 ended up 0.1% at 757.21, the Cboe UK 250 closed up 1.0% at 16,622.23, and the Cboe Small Companies ended down 1.0% at 14,392.36.

In European equities on Monday, the CAC 40 in Paris ended up 0.5%, while the DAX 40 in Frankfurt ended up 0.6%.

The US consumer price inflation print for January will be released at 1330 GMT on Tuesday. According to consensus cited by FXStreet, the annual consumer price inflation rate is expected to have cooled to 3.0% in January, from 3.4% in December.

On Friday, there is a US PPI reading to round off the week.

"Market participants are on edge as the highly anticipated US consumer price report for January approaches and is set to impact expectations regarding the Federal Reserve's future decisions," said Abdelhadi Laabi, chief marketing officer at KAMA Capital.

"The US dollar could strengthen if the consumer price report suggests higher-than-expected inflation, reinforcing expectations of a less dovish stance by the Federal Reserve. Conversely, weaker-than-expected inflation could weaken the currency."

The pound was quoted at USD1.2621 at the London equities close Monday, down compared to USD1.2632 at the close on Friday. The euro stood at USD1.0769 at the European equities close Monday, lower against USD1.0783 at the same time on Friday. Against the yen, the dollar was trading at JPY149.44, up compared to JPY149.31 late Friday.

ING analyst Francesco Pesole commented: "The second-best performing currency after the USD of 2024, the pound, is about to face a couple of key data tests this week."

UK unemployment, inflation and economic growth readings will be closely eyed by the Bank of England, with the next interest rate decision from Threadneedle Street around five weeks away.

There is a UK unemployment reading at 0700 GMT on Tuesday, kicking off the week.

"Investors are hanging onto every word uttered by anyone affiliated with the major central banks, looking for signs that interest rate cuts are finally on the agenda," AJ Bell analyst Russ Mould said.

In the FTSE 100, Glencore rose 2.4%, after it said it could no longer fund the loss-making Koniambo Nickel SAS joint venture.

Koniambo Nickel SAS is a nickel mine and processing plant on the islands of New Caledonia, owned 51% by Societe Miniere du Sud Pacifique and 49% by Glencore.

Glencore, the Barr, Switzerland-based diversified mining group, said the operation would begin an orderly transition to a state of care and maintenance.

Frasers Group rose 5.0%.

The Sports Direct owner plans to repurchase no more than GBP80.0 million from a share buyback programme, which kicks off on Monday and concludes on April 28. The total number of shares that may be repurchased in the programme will be 10.0 million.

In the FTSE 250, Tritax Big Box REIT fell 3.9%, while UK Commercial Property REIT added 4.8%, as the duo announced they have agreed to indicative terms for a tie-up.

It will create the UK's fourth-largest real estate investment trust by market capitalisation, at nearly GBP4 billion.

UKCM investors stand to receive 0.444 of a new Tritax Big Box share for every UKCM share they own.

Based on Tritax Big Box's closing share price on Friday, the deal would value each UKCM share at 71.1 pence and the full company's equity at GBP924 million.

"The merger would create a business owning big box assets and having exposure to smaller units, strategically located in urban locations. These are sometimes known as 'last mile' logistics assets and are used in the final stage of the process of delivering goods to the consumer's door," said AJ Bell's Mould.

"A key question, assuming the tie-up goes through as planned, will be whether the enlarged entity decides to streamline the combined portfolio through the sale of less-important assets."

The announcement by the two FTSE 250 index constituents represents the latest in a series of mergers of London-listed property companies since the year began. LondonMetric Property and LXi REIT also agreed an all-share merger. Custodian Property Income REIT and abrdn Property Income Trust also struck a deal.

On London's AIM, ECR Minerals rose 13%.

The Australia-focused gold exploration company provided additional results from its 2024 drilling programme at the Davey Road site of its Creswick gold project in central Victoria, Australia. The results showed a "significant increase in gold grades overall."

Managing Director Nick Tulloch said: "These results at Davey Road are very promising indeed...The higher grades now being indicated support our view that Creswick has the potential to become a very significant asset for our company."

Stocks in New York were higher at the London equities close, with the DJIA and the Nasdaq Composite both up 0.4%, and the S&P 500 index up 0.3%.

Brent oil was quoted at USD81.69 a barrel at the London equities close Monday, down from USD82.03 late Friday.

Gold was quoted at USD2,013.55 an ounce at the London equities close Monday, lower against USD2,021.73 at the close on Friday.

In Tuesday's UK corporate calendar, there are first quarter results from airline Tui.

By Sophie Rose, Alliance News senior reporter

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