Greatland Gold MD Shaun Day will be taking live Q&A on 5th March (4-5PM), please register here and submit questions here. An in-person Town Hall will follow at 6PM, please register here.

Less Ads, More Data, More Tools Register for FREE

LONDON MARKET MIDDAY: FTSE 100 underperforms as European peers rise

Mon, 12th Feb 2024 12:04

(Alliance News) - London's FTSE 100 underwhelmed on Monday, with some of its largest constituents pulling it lower, while indices in Europe were on the up on favourable comments on interest rate cuts by a European Central Bank official.

The FTSE 100 index fell 11.34 points, 0.2%, at 7,561.24. The FTSE 250 is up 74.94 points, 0.4%, at 19,137.26, and the AIM All-Share added 1.39 points, 0.2%, at 748.80.

The Cboe UK 100 fell 0.1% to 755.81, the Cboe UK 250 climbed 0.7% to 16,572.23, but the Cboe Small Companies fell 0.3% to 14,497.62.

The CAC 40 in Paris and Frankfurt's DAX 40 were both 0.3% higher.

Stocks in New York are set for a muted open. The Dow Jones Industrial Average is called down 0.1%, the S&P 500 flat and the Nasdaq Composite a touch higher.

"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 commented.

"Expectations that we will soon see this pivot moment have underpinned the pick-up in equity markets since late 2023 and confirmation of the first cut could give another leg-up to stocks and shares. The new trading week saw the spotlight shun on European stocks after ECB Governing Council member Fabio Panetta said the magic moment is 'fast approaching' for the European Central Bank to reduce rates."

The pound was quoted at USD1.2614 early Monday afternoon, down from USD1.2632 late on Friday. The euro stood at USD1.0768, down from USD1.0783. Against the yen, the dollar was trading at JPY149.03, down from JPY149.31.

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. Tomorrow, jobs data for January is released, and Wednesday sees the CPI report and Thursday GDP data.

"Our economics team sees both wage growth and services inflation remaining sticky in the first quarter, meaning that the Bank of England will have no rush to turn to a more dovish communication in the near future. Markets are expecting the BoE to move with a delay (in August) compared to the ECB's and Fed's easing cycles. We agree, but also see 100bp (vs 80bp priced in) of cuts by year-end. Some GBP weakness against the EUR down the road is therefore our base case, but the short-term outlook remains quite constructive for sterling."

It will also be a key week for oil markets. Crude prices were on the decline on Monday, however.

Brent oil was quoted at USD81.16 a barrel early Monday afternoon in London, down from USD82.03 late Friday.

Scope Markets analyst Joshua Mahony commented: "This week sees both Opec and the IEA release their latest monthly reports, with markets keeping a close eye out for any updated supply and demand forecasts. Thus far we have seen the record US output keep a lid on global oil prices, with markets casting aside the historic disruptions to global trade through the Red Sea. However, the recent Saudi decision to reverse the planned 1 million bpd production increase from Aramco highlights the continued efforts to support prices in an oversupplied market. While some will hope that we will soon see a stimulus-led resurgence in Chinese economic activity, we are yet to see any tangible signs of a bounceback that might lift assets such as oil."

Gold fetched USD2,021.68 an ounce, flat from USD2,021.73.

In London, share price falls for pharmaceutical firms put pressure on the FTSE 100. GSK and AstraZeneca, two index heavyweights, fell 0.9% and 1.7%.

AstraZeneca shares came into the week on a three-day losing streak, including a more than 6% slide on the day it released annual results.

"We think this presents a compelling entry point for a best-in-class company," analysts at Barclays said on Monday, however.

NatWest shares fell 2.3%. The lender reports annual results on Friday.

AJ Bell's Mould added: "The UK corporate reporting calendar is fairly quiet until Thursday when Relx and Centrica issue results, followed by NatWest on Friday. In the US, Coca-Cola reports on Tuesday, Cisco on Wednesday and Deere & Co and Applied Materials on Thursday. That's enough to keep investors on their toes."

Tritax Big Box REIT fell 3.2%, while UK Commercial Property REIT added 5.2%, 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 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.

RBC Brewin Dolphin said the Tritax Big Box-UKCM deal is the latest indicator of a "more investible future for UK property", expecting more deals to be announced across 2024 "as more REITs and property companies adapt to higher interest rates and reassess their portfolios amid huge changes in the way property is used."

"At their current scale, the UK's REITs are limited by their size – this has an effect on the capital they can attract, the terms on which they can borrow, and ultimately the deals they can do. Combine them all and you have just one of the main North American property asset managers – they simply can't compete on a global scale," said RBC Brewin Dolphin analyst John Moore.

Galliford Try has landed a place in a GBP3.2 billion affordable homes framework in the UK.

The construction firm said it has won a place on lot 2 of an eight-year Communities & Housing Investment Consortium framework worth GBP2.5 billion, and lot 3, which is worth GBP650 million. Lot 2 includes new build projects and Lot 3 regeneration work.

Galliford shares rose 4.5%.

By Eric Cunha, Alliance News news editor

Comments and questions to newsroom@alliancenews.com

Copyright 2024 Alliance News Ltd. All Rights Reserved.

Related Shares

More News
Today 08:25

GSK gonorrhoea treatment achieves efficacy endpoint in latest trial

(Alliance News) - GSK PLC on Monday announced positive results from the latest trial of its oral gonorrhoea treatment, showing it to be on par with in...

Today 07:22

GSK reports positive results from gonorrhoea treatment trial

(Sharecast News) - GSK announced encouraging headline outcomes from its trial of gepotidacin, an oral antibiotic aiming to address uncomplicated uroge...

21 Feb 2024 09:47

GSK reports encouraging results for ViiV's Cabenuva HIV treatment

(Alliance News) - GSK PLC on Wednesday said that its majority-owned company ViiV Healthcare had received positive interim data from ongoing trials of ...

21 Feb 2024 07:22

GSK's ViiV sees success in latest HIV treatment trial

(Sharecast News) - GSK's specialist HIV unit ViiV Healthcare, which it owns in partnership with Pfizer and Shionogi, unveiled promising findings from ...

20 Feb 2024 15:10

PRESS: AJ Bell founder to join Applied Nutrition ahead of IPO - Sky

(Alliance News) - Supplements maker Applied Nutrition, plotting a London stock market float, is to add AJ Bell PLC founder Andy Bell as its chair, Sky...

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.