London midday: Markets “calm” ahead of Fed and BoE meetings

by | Sep 19, 2023

(Sharecast News) – London’s FTSE 100 was more or less unchanged on Tuesday as investors chose to keep their powder dry ahead of what’s set to be an important week for monetary policy in the UK and US.
“This will be the last day of relative calm in markets, ahead of two days packed with big central bank action,” said FX strategist Francesco Pesole at ING Bank.

The UK benchmark index was flat at 7,657 by the midday mark, with US stock futures struggling for direction in pre-market trading on Wall Street.

Policymakers at the Federal Reserve are due to announce their interest-rate decision on Wednesday afternoon in the US. While they are widely expected to keep rates unchanged, given recent data showing a slight cooling of the US economy, markets will be on the lookout for any indication of future monetary policy.

The Bank of England will follow suit on Thursday, and is predicted to hike rates a further 25 basis points to 5.5%, though it remains to be seen whether this will be the peak for rates in the current cycle. Consumer price index data out on Wednesday will be closely watched, and any upside surprise could reignite fears of rates staying higher for longer.

The recent surge in oil prices is a big cause for concern for policymakers, with inflation still trending substantially higher than their targets. Brent crude was up 0.4% at $94.79 a barrel on Tuesday, touching an intraday high of $95.33 as it nears its 52-week high of $99.56, following a near-30% jump over the past three months.

In economic data on Tuesday, the annual rate of Eurozone inflation unexpectedly eased to 5.2% in August, from 5.3% in July. The new reading was revised from an earlier ‘flash’ estimate of 5.3%.

Kingfisher hit by profit warning

Shares in DIY retailer Kingfisher tanked 9% after the company lowered its profit expectations for the full year on the back of worsening trading conditions in Poland and France. Full-year adjusted profit before tax guidance was cut from £634m to around £590m. The company tried to appease investor with a £300m new share buyback programme, but shares still dropped 6% early on.

Hargreaves Lansdown jumped 5% after the savings and investment company reported a 50% surge in yearly profits to £402.7m, along with an 8% increase in assets under administration to £134bn.

Online grocer and technology company Ocado rose 2% after maintaining annual guidance following a rise in third-quarter retail revenues. The company, 50% owned by Marks & Spencer, said retail sales came in at £569.6m from £531m a year earlier, with a return to positive volume growth in the last month of the quarter.

On the FTSE 250, Travel giant Tui jumped 6% after holding annual guidance on the back of a strong summer and solid bookings for this winter

Market Movers

FTSE 100 (UKX) 7,657.02 0.05%
FTSE 250 (MCX) 18,532.07 0.45%
techMARK (TASX) 4,352.21 -0.13%

FTSE 100 – Risers

Hargreaves Lansdown (HL.) 807.00p 5.49%
Ocado Group (OCDO) 804.40p 2.21%
Marks & Spencer Group (MKS) 227.00p 2.02%
Smurfit Kappa Group (CDI) (SKG) 2,926.00p 2.02%
Phoenix Group Holdings (PHNX) 536.20p 1.86%
Land Securities Group (LAND) 584.60p 1.74%
Fresnillo (FRES) 588.60p 1.66%
Centrica (CNA) 172.65p 1.56%
Legal & General Group (LGEN) 228.20p 1.47%
St James’s Place (STJ) 846.80p 1.34%

FTSE 100 – Fallers

Kingfisher (KGF) 215.40p -8.57%
Burberry Group (BRBY) 2,105.00p -2.18%
BT Group (BT.A) 116.60p -1.35%
Melrose Industries (MRO) 493.70p -1.34%
AstraZeneca (AZN) 10,590.00p -1.29%
Convatec Group (CTEC) 218.20p -1.27%
Croda International (CRDA) 4,892.00p -1.11%
Halma (HLMA) 2,087.00p -1.09%
JD Sports Fashion (JD.) 134.65p -1.03%
GSK (GSK) 1,491.00p -0.96%

FTSE 250 – Risers

Ceres Power Holdings (CWR) 361.60p 6.29%
TUI AG Reg Shs (DI) (TUI) 493.00p 5.57%
SThree (STEM) 378.50p 5.43%
C&C Group (CDI) (CCR) 137.80p 4.39%
Bridgepoint Group (Reg S) (BPT) 196.10p 3.92%
Future (FUTR) 760.00p 3.19%
Mobico Group (MCG) 84.65p 2.54%
Wood Group (John) (WG.) 160.20p 2.36%
Wetherspoon (J.D.) (JDW) 722.50p 2.34%
Aston Martin Lagonda Global Holdings (AML) 303.00p 2.23%

FTSE 250 – Fallers

International Distributions Services (IDS) 256.60p -2.17%
Balanced Commercial Property Trust Limited (BCPT) 66.40p -1.63%
Rathbones Group (RAT) 1,696.00p -1.51%
Games Workshop Group (GAW) 10,770.00p -1.46%
888 Holdings (DI) (888) 118.30p -1.42%
Johnson Matthey (JMAT) 1,685.50p -1.32%
Octopus Renewables Infrastructure Trust (ORIT) 86.90p -1.25%
4Imprint Group (FOUR) 5,020.00p -1.18%
Helios Towers (HTWS) 82.25p -1.08%
Genuit Group (GEN) 321.50p -1.08%

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