LONDON MARKET CLOSE: Stocks mixed as investors eye central banks

(Alliance News) - Stocks in London ended mixed on Monday with miners weighing on the FTSE 100, while investors gear up for more major central bank meetings this week following the US Federal Reserve's hawkish pivot.

The FTSE 100 index closed down 1.70 point at 7,464.37. The FTSE 250 closed up 283.32 points or 1.3%, at 21,926.62, and the AIM All-Share rose 12.46 points, or 1.2%, at 1,094.97.

The Cboe UK 100 ended down 0.2% at 740.61, the Cboe UK 250 closed up 0.5% at 19,565.41, and the Cboe Small Companies ended down 0.7% at 15,350.43.

In European equities on Monday, the CAC 40 stock index in Paris ended up 0.5% and the DAX 40 in Frankfurt closed up 1.0%.

In the FTSE 100, Scottish Mortgage Investment Trust, which predominatlty invests in US tech stocks, ended the best performer, up 5.0%, tracking a rise in the tech-heavy Nasdaq Composite index.

Ocado Group closed up 4.3%. The online grocer accused rival Autostore of misleading investors over its legal battle with the online grocer in Germany.

Autostore issued an update on the Norwegian stock market on Monday claiming that a judge in a Mannheim Court said Ocado's intellectual property rights are invalid. But Ocado said this was untrue and that a pause in the court action was procedural, rather than a sign that the company's case was under threat.

The sides are fighting over patents for robots both have designed for picking products in warehouses for online shoppers.

Both sides are claiming patent infringement and on Friday, Autostore told the stock market a separate hearing in Munich had also been put on hold.

Spirax-Sarco Engineering gained 3.6% after the steam systems manufacturer completed the acquisition of energy consulting firm Cotopaxi for GBP13.3 million.

Vodafone Group rose 1.9%. Bloomberg late Friday reported activist investor Cevian Capital has built up a stake in the telecommunications company.

Bloomberg, citing people familiar with the matter, said the Swedish investment firm has been in talks with officials at Vodafone for several months, in a bid to improve the FTSE 100 company's fortunes.

Measures could include selling some operations, making stock buybacks, and boosting its presence in key markets, Bloomberg added.

At the other end of the large-caps, miners ended among the worst performers following disappointing economic data from China.

Rio Tinto closed down 3.7%, Anglo American down 2.8% and Glencore down 2.6%.

Data from China showed the latest coronavirus wave weighed on manufacturing activity at the start of 2022.

The Caixin purchasing managers' index fell to 49.1 points in January from 50.9 in December. Any figure above the no-change mark of 50.0 indicates expansion and one below signals contraction, indicating growth slipped into reverse in January after a modest rise in December.

In the FTSE 250, XP Power ended the best performer, up 8.4%, following the acquisition of two German power businesses.

Elsewhere, Lookers closed up 4.7% after Constellation Automotive Holdings has purchased just shy of a 20% stake in the car dealer.

The Cheshire-based firm had 78 million of its shares purchased by Constellation, a Farnham, England-based digital used-car marketplace. Tony Bramall and associates purchased the majority of the shares at a price of 102 pence each. Bramall is a former non-executive director at Lookers who stepped down in 2020 after a 14-year term.

Constellation Automotive owns digital vehicle marketplace WeBuyAnyCar, as well as Cinch, a platform which also allows for the buying and selling of vehicles online.

Further, Constellation has contacted Lookers about the investment, and indicated support for the company's strategy and senior leadership.

The power control systems company acquired FuG Elektronik and Guth High Voltage from Dr Simon Consulting GmbH for a cash consideration of EUR39 million.

The pound was quoted at USD1.3425 at the London equities close, up slightly from USD1.3422 at the close Friday, ahead of the Bank of England's interest rate decision on Thursday.

The Bank of England is fully expected to carry out a second consecutive interest rate hike this week as the UK grapples with sky-high inflation. With a February hike all but certain, focus will lie on the UK central bank's outlook for the year ahead.

Analysts at Western Union explained: "The key event for the pound this week is on Thursday when the Bank of England announces its monetary policy decision and publishes new economic forecasts in its quarterly report. Money markets are pricing in a 91% chance of a 25-basis-point hike."

The euro stood at USD1.1211 at the European equities close, up sharply from USD1.1163 at the same time Friday, as investors eye the European Central Bank's interest rate decision on Thursday.

Analysts at Rabo Bank said: "EUR speculators' positions have continued to perk up in a continuation of the improving trend noted since mid-December. The move suggests that investors may have become overly bearish on the outlook for the single currency late last year. That said, we expect the ECB to push back against market hopes for a rate hike this year. News that Mario Draghi remains Italy's PM has raised hopes regarding reform. This could be EUR supportive going forward."

Against the yen, the dollar was trading at JPY115.25, up from JPY115.18 late Friday.

Stocks in New York were higher at the London equities close ahead of a heavy week of earning and economic reports, as a highly volatile month for equities draws to a close.

The DJIA was up 0.1%, the S&P 500 index up 0.8% and the Nasdaq Composite up 2.0%.

This week's calendar includes PMI surveys on the manufacturing and service sectors, the January jobs reports and earnings from Amazon, Alphabet, Meta Platforms Exxon Mobil and other large companies.

Brent oil was quoted at USD91.12 a barrel at the equities close, up sharply from USD90.59 at the close Friday.

Gold stood at USD1,797.05 an ounce at the London equities close, higher against USD1,784.78 late Friday.

The economic events calendar on Tuesday has manufacturing PMI readings from Germany, the eurozone, the UK and US at 0830 GMT, 0900 GMT, 0930 GMT and 1445 GMT respectively. The Reserve Bank of Australia's interest rate decision is announced overnight. Financial markets are closed in Hong Kong and Shanghai for Lunar New Year.

The UK corporate calendar Tuesday has first-quarter results from challenger bank Virgin Money UK and interim results from NWF Group.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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