London midday: Stocks firmer ahead of Powell, Lagarde speeches

by | Aug 25, 2023

(Sharecast News) – London stocks were firmer by midday on Friday as investors turned their attention to the Jackson Hole symposium in Wyoming, in particular speeches by Federal Reserve chair Jerome Powell and ECB president Christine Lagarde.
At 1210 BST, the FTSE 100 was up 0.5% at 7,367.43.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The FTSE 100 has had a strong week and gains are expected to be retained as we head into the long weekend. The lack of big-hitting news means there’s little to rock the boat, but there is a sense of bated breath ahead of Fed Chair Jerome Powell’s speech later today.

“Comments from Fed president Susan Collins have already laid the ground for the fact rate increases may be needed to stifle inflation, with more work to be done to get it in line with targets within a reasonable timeframe.”

Investors will also be eyeing a speech by European Central Bank President Christine Lagarde.

ING said in a note that Lagarde probably faces a harder task than her US counterpart today.

“The latest PMIs confirmed the eurozone economy is heading towards a period of sluggish growth, which now makes any hawkish statement a harder sell,” it said.

“At the same time, Lagarde and her ECB colleagues are probably aware that the window for one last hike to curb the still non-negligible service inflation is closing fast. In other words, if the ECB pauses in September, it may well not get a chance to hike any more given the deteriorating economic outlook.”

On home turf, investors were mulling the latest survey from GfK, which showed that consumer confidence rebounded in August, although the index remained in negative territory.

The consumer confidence index jumped five points from July to -25.

“Against a backdrop of falling core inflation, higher interest rates and rising average weekly earnings, the consumer confidence index has regained momentum this month with a welcome five-point improvement,” said GfK client strategy director Joe Staton.

“Although the headline figure remains strongly negative at -25, hopes for our personal financial situation for the coming year are heading back towards positive territory, a metric that is key to indicating the future financial position of households.”

In equity markets, Watches of Switzerland tanked after it emerged that Rolex was buying one of its key rivals, Bucherer, for an undisclosed amount.

Russ Mould, investment director at AJ Bell, said: “Investors seem to fear the tie-up will mean Bucherer gets preferential treatment including better access to the watches that consumers are desperate to buy.

“Watches of Switzerland’s efforts to reassure the market that there will be no change in how Rolex allocates stock have fallen on deaf ears. This is what Rolex might have promised now, but that could easily change in the future.”

Elsewhere, financial trading platform CMC Markets tumbled after it warned that annual net operating income would be lower than last year as revenues continued to fall in a “challenging” environment.

The company said subdued market conditions had continued through August with trading and investing net revenues trending 20% lower year-on-year.

“August in particular has seen a more challenging environment with markedly lower monetisation of client trading activity due to a higher proportion of lower margin institutional volume,” CMC said.

“Should year-to-date market conditions continue for the remainder of full-year 2024 then it is expected that net operating income will be between £250 and £280m,” it added, lower than the £288m reported last year.

On the upside, Aston Martin Lagonda was boosted by an upgrade to ‘buy’ from ‘hold’ at Jefferies, which hiked the price target to 420p from 300p.

Market Movers

FTSE 100 (UKX) 7,367.43 0.46%
FTSE 250 (MCX) 18,197.55 0.02%
techMARK (TASX) 4,238.48 0.22%

FTSE 100 – Risers

Smurfit Kappa Group (CDI) (SKG) 3,144.00p 1.68%
Tesco (TSCO) 259.00p 1.49%
Flutter Entertainment (CDI) (FLTR) 14,180.00p 1.47%
Next (NXT) 6,842.00p 1.36%
Intertek Group (ITRK) 4,129.00p 1.28%
Smith (DS) (SMDS) 293.50p 1.24%
SEGRO (SGRO) 732.00p 1.19%
Airtel Africa (AAF) 111.00p 1.19%
Associated British Foods (ABF) 1,965.50p 1.16%
Rolls-Royce Holdings (RR.) 204.00p 1.14%

FTSE 100 – Fallers

Fresnillo (FRES) 557.00p -0.78%
Entain (ENT) 1,153.50p -0.60%
Prudential (PRU) 955.20p -0.56%
Frasers Group (FRAS) 781.50p -0.38%
AstraZeneca (AZN) 10,718.00p -0.30%
Auto Trader Group (AUTO) 590.80p -0.27%
Scottish Mortgage Inv Trust (SMT) 659.80p -0.24%
Endeavour Mining (EDV) 1,667.00p -0.24%
F&C Investment Trust (FCIT) 851.00p -0.23%
JD Sports Fashion (JD.) 139.60p -0.21%

FTSE 250 – Risers

Aston Martin Lagonda Global Holdings (AML) 339.40p 5.80%
Quilter (QLT) 82.65p 2.61%
FDM Group (Holdings) (FDM) 582.00p 2.28%
SDCL Energy Efficiency Income Trust (SEIT) 75.50p 2.03%
Ferrexpo (FXPO) 78.00p 1.76%
Marks & Spencer Group (MKS) 218.30p 1.58%
Greggs (GRG) 2,440.00p 1.50%
Mitie Group (MTO) 93.40p 1.41%
Telecom Plus (TEP) 1,590.00p 1.40%
Investec (INVP) 469.90p 1.40%

FTSE 250 – Fallers

Watches of Switzerland Group (WOSG) 550.00p -20.69%
CMC Markets (CMCX) 104.00p -14.75%
Abrdn Private Equity Opportunities Trust (APEO) 416.00p -2.23%
Indivior (INDV) 1,737.00p -2.03%
Coats Group (COA) 73.50p -2.00%
Spirent Communications (SPT) 148.10p -1.79%
TUI AG Reg Shs (DI) (TUI) 476.00p -1.49%
Keller Group (KLR) 749.00p -1.45%
Ithaca Energy (ITH) 145.40p -1.36%
Direct Line Insurance Group (DLG) 159.70p -1.33%

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