LONDON MARKET CLOSE: Shares mixed on Autumn statement; pubs get boost

Wed, 22nd Nov 2023 16:54

(Alliance News) - Stock prices in London closed mixed on Wednesday, following the UK'S Autumn statement, which had no big surprises for investors.

The FTSE 100 index closed down 12.48 points, 0.2%, at 7,469.51. The FTSE 250 ended up 132.54 points, 0.7%, at 18,480.17, and the AIM All-Share closed up 0.59 of a point, or 0.1%, at 716.90.

The Cboe UK 100 ended down 0.2% at 745.25, the Cboe UK 250 closed up 0.5% at 15,969.90, and the Cboe Small Companies ended up 0.1% at 13,547.64.

In European equities on Wednesday, the CAC 40 in Paris ended up 0.5%, while the DAX 40 in Frankfurt ended up 0.4%.

"The UK Autumn Statement wasn't a big market-moving event today and perhaps in the current environment, that's a good thing," said Oanda's Craig Erlam.

"Given the speculation in recent days around what measures Chancellor Jeremy Hunt would announce due to the additional fiscal headroom and proximity to the election, there have been some concerns that measures could run counter to the Bank of England's goal of getting inflation back to 2%."

UK Chancellor Jeremy Hunt on Wednesday set out a fiscal policy statement which features "110 growth measures", set alongside a mixed set of forecasts for the economy and public sector debt from the Office for Budget Responsibility.

The OBR predicts the UK economy will grow by 0.6% this year, 0.7% in 2024 and 1.4% in 2025. The 2023 forecast is brighter than what the body predicted in March, when it saw the economy shrinking by 0.2% this year. However, the outlook for 2024 and 2025 growth was lowered significantly from 1.8% and 2.5%, respectively, in March.

The OBR predicted the UK annual inflation rate will ease to 2.8% by the end of 2024, before falling below the Bank of England's 2% target in 2025.

Hunt, parachuted into the chancellor role following the mini-budget turmoil last year, said his autumn statement measures will look to remove "planning red tape" and improve productivity.

Among the measures announced, was the freezing of all alcohol duty until August 1, as well as a plan to invest GBP110 million over this year to unlock "40,000 homes" as well as a plan to invest GBP500 million to make the UK an "AI powerhouse".

On the back of this pub and alcohol stocks edged higher. C&C was up 3.0%, Marston's up 2.6%, Diageo up 1.4%, Wetherspoon up 1.8%.

Meanwhile, NatWest shares traded 1.3% lower.

Hunt said the UK government is "exploring" a possible retail share offer for NatWest over the next 12 months, though this would be subject to market conditions and "value for money". The plan was announced during the chancellor's autumn statement on Wednesday.

As of May, the UK government has held just shy of a 38.6% stake in NatWest. In March 2022, when the Treasury sold back NatWest shares to the company, its stake in the lender fell below the 50% threshold for the first time since 2008.

"Time will tell if these measures have the desired effect of incentivising tax-free investment in businesses listed on the London Stock Exchange and boosting London's listing appeal," said Edison Group's Neil Shah.

Elsewhere in the FTSE 100, Sage Group closed up 13%.

The enterprise software company announced double-digit annual revenue growth, and began a share buyback of GBP350 million.

In the year to September 30, revenue rose 12% year-on-year to GBP2.18 billion from GBP1.95 billion, and annualised recurring revenue rose 11% to GBP2.19 billion from GBP1.96 billion. Pretax profit dropped 16% to GBP282 million from GBP337 million, as the firm's operating profit margin shrunk to 14.4% from 18.9%. The final dividend proposed is 12.75p, bringing the annual total to 19.3p, up from 18.4p a year before.

Kingfisher closed at the bottom of the index, falling 6.5%.

The B&Q-owner said sales in the third quarter ending October 31 declined 2.1% to GBP3.24 billion, from GBP3.26 billion a year ago.

In UK & Ireland, sales amounted to GBP1.60 billion during the quarter, up 3.3% year-on-year from GBP1.55 billion.

However, the growth in the UK & Ireland was more than offset by an 8.7% decline in French sales to GBP1.03 billion, from GBP1.10 billion. Sales in Other International fell 3.7% to GBP608 million, from GBP621 million a year ago.

Looking ahead, the company said it expects adjusted pretax profit of around GBP560 million, compared with GBP758 million a year ago.

In the FTSE 250, Johnson Matthey rose 4.9%, after it said it will cut 600 more jobs, with the chemicals firm outsourcing some parts of the business.

The firm, which had previously confirmed plans to close four manufacturing sites outside of the UK, at the loss of 900 roles, said more jobs in the company now face the axe.

The London-based firm earlier on Wednesday said revenue in the half-year to September 30 declined 11% to GBP6.53 billion from GBP7.33 billion a year earlier. Pretax profit was 56% lower at GBP82 million from GBP188 million.

However, the firm maintained its interim dividend of 22.0 pence per share.

Looking ahead, Johnson Matthey upped its yearly outlook. It now expects "at least high single digit growth in operating performance at constant precious metal prices and constant currency". It had previously expected mid single digit growth.

Across the Atlantic, stocks in New York were higher at the London equities close. The DJIA and the S&P 500 index were both up 0.4%, whilst the Nasdaq Composite up 0.5%.

Investors were weighing up the minutes from the latest Federal Reserve meeting released on Tuesday evening, as well as the latest unemployment report on Wednesday.

Fed officials indicated interest rates would need to remain high for "some time" judging it as "critical" to return "unacceptably high" inflation to its 2% target. Officials "continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the committee's 2% objective over time."

On Wednesday, there was the US weekly initial jobs claims, released a day early ahead of Thursday's Thanksgiving public holiday in the US.

US initial jobless claims were lower than expected in the most recent week, numbers on Wednesday showed.

According to the Department of Labor, new claims amounted to 209,000 in the week to November 18, down from the previous week's revised level of 233,000. The previous week's figure was upwardly revised by 2,000 from 231,000. The latest figure was below the FXStreet-cited market consensus of 225,000.

The pound was quoted at USD1.2458 at the London equities close Wednesday, down compared to USD1.2531 at the close on Tuesday. The euro stood at USD1.0864 at the European equities close Wednesday, lower against USD1.0926 at the same time on Tuesday. Against the yen, the dollar was trading at JPY149.72, higher compared to JPY147.91 late Tuesday.

Brent oil was quoted at USD79.36 a barrel at the London equities close Wednesday, down from USD81.74 late Tuesday. Gold was quoted at USD1,993.04 an ounce, down against USD1,999.42.

In Thursday's UK corporate calendar, there is a trading statement from Intertek, as well as half year results from Jet2 and LondonMetric Property.

On the economic calendar, flash PMI releases come out for the EU, Germany and the UK, while European Central Bank releases its latest meeting minutes.

By Sophie Rose, Alliance News senior reporter

Comments and questions to newsroom@alliancenews.com