LONDON MARKET MIDDAY: Investors shake off pre-US inflation nerves

(Alliance News) - The FTSE 100 in London was higher at midday on Wednesday, as investors look ahead to the US Federal Reserve's next test on Friday.

The FTSE 100 index was up 38.40 points, 0.5%, at 8,083.21. The FTSE 250 was down 3.41 points at 19,796.31, and the AIM All-Share was up 0.1 of a point at 754.97.

The Cboe UK 100 was up 0.5% at 807.00, the Cboe UK 250 was down 0.2% at 17,120.95, and the Cboe Small Companies was up 0.4% at 15,342.82.

In European equities on Wednesday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.2%.

"Markets seem to have put a wobble inspired by Middle East tensions and interest rate worries behind them for now, with Friday's core PCE reading of US inflation the next key test. If this suggests inflationary pressures are looking entrenched it could lead to a further scaling back of rate cut expectations across the pond," said AJ Bell's Russ Mould.

Friday's US PCE reading is expected to show the annual core PCE inflation measure, the Fed's preferred gauge, eased to 2.6% in March from 2.8% in February.

Francesco Pesole at ING said the PCE data is one of the "major risk events for the dollar in the coming days."

There is also a US gross domestic product reading out on Thursday, as well as the weekly initial jobless claims data.

Before that, though, there is a US durable goods orders reading at 1330 BST on Wednesday.

The pound was quoted at USD1.2431 at midday on Wednesday in London, down compared to USD1.2440 at the equities close on Tuesday. The euro stood at USD1.0689, lower against USD1.0699. Against the yen, the dollar was trading at JPY154.91, up compared to JPY154.77.

In the FTSE 100, Reckitt jumped 5.3%.

Reckitt reported a strong start to 2024 for its Hygiene business, offsetting a significant decline in Nutrition and allowing the company to maintain its guidance for annual revenue and profit growth.

The Slough, England-based consumer goods maker also got some growth from its Health division.

"We have delivered a good first quarter," said Chief Executive Officer Kris Licht. "Following a period of price-led growth, we are now returning to a more balanced contribution from price, mix and volume. We grew volumes in many of our 'powerbrands' in the quarter, including Lysol, Dettol, Durex and Finish, as well as our non-seasonal [over-the-counter] portfolio."

Lloyds Banking rose 2.8%.

Lloyds said pretax profit came in at GBP1.63 billion in the first quarter, down 28% from GBP2.26 billion annually. Net income fell to GBP4.24 billion, down 9% from GBP4.65 billion.

Lloyds CET1 ratio fell to 13.9% from 14.1%.

"The group is continuing to deliver in line with expectations in the first quarter of 2024, with solid net income, cost discipline and strong asset quality. Our performance provides us with further confidence around our strategic ambitions and 2024 and 2026 guidance," said CEO Charlie Nunn.

On the other hand, Croda International lost 3.5%, after it reported a drop in sales over the first quarter of 2024.

The Yorkshire, England-based chemicals company said sales in the first quarter fell 14% to GBP409 million from GBP477 million last year.

Despite the drop in sales, Croda reaffirmed its guidance for the year expecting an adjusted pretax profit between GBP300 million and GBP360 million.

In the FTSE 250, Quilter edged up 4.4%.

The London-based wealth manager reported growth in assets under management & administration, and net flows in the first quarter of 2024, demonstrating tentative signs of improving market sentiment.

"We are pleased to report that our first quarter net flows are running at double the level experienced last year, reflecting the momentum in our business, actions we have taken and tentative signs of improving market sentiment," Quilter CEO Steven Levin said.

On London's AIM, Filtronic surged 61%.

The company said that revenue in financial 2024 will now be marginally ahead of expectations and Ebitda will be significantly ahead of expectations.

Further, revenue and Ebitda in financial 2025 will be "significantly" ahead of market expectations.

In a separate announcement, Filtronic said it has entered into a strategic partnership and commercial agreement with Space Exploration Technologies. Space Exploration designs, manufactures, launches and operates rockets and spacecraft.

Stocks in New York were called to open mixed. The Dow Jones Industrial Average was called down slightly. The S&P 500 index were called up 0.1%, and the Nasdaq Composite up 0.5%.

Brent oil was quoted at USD88.10 a barrel at midday in London on Wednesday, up from USD87.76 late Tuesday.

Gold was quoted at USD2,317.42 an ounce, lower against USD2,322.78.

By Sophie Rose, Alliance News senior reporter

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