Portfolio

London close: Stocks rise further ahead of BoE decision

By Josh White

Date: Wednesday 08 May 2024

London close: Stocks rise further ahead of BoE decision

(Sharecast News) - London's stock markets closed with gains on Wednesday, bolstered by a dip in the value of the pound against both the dollar and the euro.

The FTSE 100 index rose 0.49% to reach 8,354.05 points, while the FTSE 250 climbed 0.39% to settle at 20,491.99 points.

In currency markets, sterling was last down 0.1% on the dollar, trading at $1.2496, while it retreated 0.07% against the euro to change hands at €1.1623.

Investors were looking ahead to the Bank of England's forthcoming policy announcement, expected later in the week.

"The FTSE 100 reached a new all-time high, with AstraZeneca leading following the company's announcement of a global recall of its Covid-19 vaccine due to an excess supply of updated vaccines," said TickMill market analyst Patrick Munnelly.

"The pharmaceutical sector has been gaining favour among investors for several months, with many thematic investors looking towards healthcare and pharmaceuticals as significant investment themes."

Munnelly said investors were also looking to the Bank of England's decision on interest rates.

"The focus will be on the BoE's interest rate decision on Thursday, with widespread anticipation of no change in rates.

"Nevertheless, there has been an increase in bearish predictions, as markets are now pricing in the possibility of a rate cut in August."

Industrial output declines in Germany, interest rates cut in Sweden

There was a marked lack of local economic news for investors to sink their teeth into, but on the continent, Germany's industrial output declined in March, although not as steeply as initially anticipated.

Data from Destatis revealed a 0.4% decrease in industrial production for the month, following a revised 1.7% upsurge in February, which was adjusted from the initial estimate of +2.1%.

Despite economists' expectations of a 0.6% drop in March, the actual decline was slightly less severe.

However, the three-month moving average, which aims to smooth out monthly fluctuations, indicated a 1% increase in production for the January to March period compared to the previous three months.

In March, energy sector production plummeted by 4.2%, while industry saw a 0.4% decrease.

Additionally, production in consumer goods dropped by 1.4%, and intermediate goods declined by 0.6%.

On a brighter note, construction output increased, expanding by 1.0%.

Elsewhere, Sweden's central bank implemented its first interest rate cut since 2016.

In a unanimous decision, the Riksbank reduced the borrowing cost by 0.25 percentage points to 3.75%.

The bank cited weak economic activity despite nearing its inflation target as the primary reason for the rate adjustment.

It also indicated the possibility of further cuts soon, stating, "if the outlook for inflation still holds, the policy rate is expected to be cut two more times during the second half of the year".

Informa in the green, miners on the back foot

On London's equity markets events, publishing, and data group Informa rose 2.29% after it announced an expansion of its share buyback program by 50% and reported a strong operating performance for the first four months of the year, projecting revenues, profits, and cash flow to reach the upper end of guidance.

Informa raised its 2024 share repurchase program by an additional £160m to £500m.

AstraZeneca climbed 1.2% following its decision to withdraw its Covid-19 vaccine worldwide due to rare and potentially dangerous side effects, made public just months after the company's acknowledgment of the issue.

OSB Group jumped 5.27% after reporting stable financial and operational performance in the first quarter, with underlying net interest margin on track to meet full-year guidance.

Pub operator JD Wetherspoon rallied by 4.33% as it anticipated full-year profits to be towards the top of market expectations.

The company reported a 5.2% increase in like-for-like third-quarter sales, boosted by strong sales of traditional ales and Guinness.

British Gas owner Centrica advanced 2.21% following an upgrade to 'buy' at UBS.

Direct Line Insurance Group reversed earlier losses to close 1.29% higher, after reporting a significant rise in first-quarter written premiums despite consumer backlash against price hikes.

Diageo surged by 1.91%, likely benefiting from positive market sentiment stemming from AB InBev's reaffirmation of full-year guidance following better-than-expected first-quarter volumes.

John Wood Group rocketed 12.12% surge after rejecting a takeover proposal from Sidara, valuing the company at more than £1.4bn.

On the downside, technical instruments maker Renishaw declined 4.21% after it revised its full-year guidance downwards amidst "mixed" markets and declining earnings over the first nine months of the financial year.

Mining giants Glencore and Rio Tinto also faced losses, with Glencore falling 1.49% and Rio Tinto 1.13%.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,354.05 0.49%
FTSE 250 (MCX) 20,491.99 0.39%
techMARK (TASX) 4,712.28 0.23%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 183.60p 3.72%
Beazley (BEZ) 662.00p 3.04%
easyJet (EZJ) 524.80p 2.86%
RS Group (RS1) 808.00p 2.67%
Rolls-Royce Holdings (RR.) 428.70p 2.46%
Melrose Industries (MRO) 605.40p 2.40%
IMI (IMI) 1,833.00p 2.38%
Prudential (PRU) 777.00p 2.32%
Informa (INF) 850.40p 2.29%
Centrica (CNA) 134.05p 2.21%

FTSE 100 - Fallers

Ocado Group (OCDO) 345.90p -3.92%
Phoenix Group Holdings (PHNX) 508.50p -1.74%
JD Sports Fashion (JD.) 116.80p -1.72%
Intermediate Capital Group (ICG) 2,146.00p -1.56%
Glencore (GLEN) 460.70p -1.55%
London Stock Exchange Group (LSEG) 9,180.00p -1.38%
Rio Tinto (RIO) 5,528.00p -1.13%
Anglo American (AAL) 2,655.00p -0.97%
Flutter Entertainment (DI) (FLTR) 16,060.00p -0.86%
Entain (ENT) 779.20p -0.84%

FTSE 250 - Risers

Wood Group (John) (WG.) 192.90p 16.91%
Wizz Air Holdings (WIZZ) 2,194.00p 5.28%
OSB Group (OSB) 451.60p 5.27%
Close Brothers Group (CBG) 494.80p 4.96%
W.A.G Payment Solutions (WPS) 69.00p 4.55%
Wetherspoon (J.D.) (JDW) 759.00p 4.33%
Future (FUTR) 774.00p 3.96%
NCC Group (NCC) 135.40p 3.20%
Hill and Smith (HILS) 1,918.00p 2.77%
3i Infrastructure (3IN) 348.00p 2.65%

FTSE 250 - Fallers

Tritax Eurobox (GBP) (EBOX) 59.00p -6.94%
North Atlantic Smaller Companies Inv Trust (NAS) 3,920.00p -5.08%
Renishaw (RSW) 3,980.00p -4.21%
Playtech (PTEC) 485.00p -3.00%
Foresight Group Holdings Limited NPV (FSG) 444.00p -2.63%
Ferrexpo (FXPO) 48.95p -2.50%
Bakkavor Group (BAKK) 119.00p -2.48%
IntegraFin Holding (IHP) 296.50p -2.31%
Watches of Switzerland Group (WOSG) 325.00p -2.29%
Bridgepoint Group (Reg S) (BPT) 226.60p -2.16%

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