(Alliance News) – Shares in London closed mixed on Wednesday after Jerome Powell of the US Federal Reserve gave little away on the future of interest rates.
The FTSE 100 index closed 8.32 points, or 0.1%, lower at 7,401.72. The FTSE 250 finished 84.55 points, or 0.5%, higher at 17,846.26, and the AIM All-Share closed 3.05 points, or 0.4%, higher at 701.68.
The Cboe UK 100 ended 0.1% lower at 739.24, the Cboe UK 250 closed 0.5% lower at 15,495.36, and the Cboe Small Companies closed almost flat at 12,927.74.
Shares in New York were lower at the close of London stock markets, with the DJIA, the S&P 500 and the Nasdaq Composite all closing 0.1% lower.
All eyes were on the next set of interest rate decisions from the US and UK.
“Some Fed officials are starting to push back against the deaf narrative,” BBH Currency Strategy said.
Last Wednesday, the central bank unanimously agreed to keep the key federal funds rate in a target range between 5.25% and 5.50%, fueling hopes that the central bank would be ready to pivot.
However, US Federal Reserve Governor Michelle Bowman predicted another rate hike on Tuesday despite officials holding rates steady at their last meeting.
Investors were hoping for some guidance from Fed chief Jerome Powell on Wednesday, but he gave little away on interest rates. He also did not comment on the prospects for the US economy.
Attention also turned to British monetary policy. Bank of England Governor Andrew Bailey said he is “optimistic” that inflation will fall to normal levels, but warned that borrowing costs will remain high for some time to come.
Speaking in Dublin, the governor reiterated that it is “too early” to talk about rate cuts.
AJ Bell’s Russ Mold said where the bank ends up with its next interest rate decisions “could dictate whether we get a Santa rally or a festive sell-off before the end of the year.”
The pound was trading at USD1.2300 at the close of trading in London on Wednesday, down slightly from USD1.2304 at the close of trading on Tuesday.
The euro stood at USD1.0707 at the close of the European stock exchange on Wednesday, up from USD1.0688 at the same time on Tuesday. The dollar was trading against the yen at JPY150.83, up from JPY150.51 late Tuesday.
In the FTSE 100, Marks & Spencers was by far the best performer of the day. It rose 8.9% after resetting its dividend.
Sales in the six months to September 30 rose 11% to GBP6.13 billion, from GBP5.54 billion a year earlier. Profit before tax increased by 56% from GBP208.5 million to GBP325.6 million.
The company’s interim dividend was 1.0 pence per share. The year before, the company did not pay an interim dividend.
The improved interim results suggest the clothing, home and food retailer is set for a robust Christmas.
“Marks & Spencer’s first half results are so good that management’s biggest challenge now may be to keep analysts from getting too excited and avoid over-inflating their numbers and setting expectations too high. ,” said Russ Mould, investment director at AJ Bell.
Rolls-Royce rose 3.1%. Morgan Stanley has upgraded the jet engine manufacturer from ‘equal weight’ to ‘overweight’.
Commenting on the upgrade, Morgan Stanley analyst Ross Law wrote: “Why now? We see further free cash flow growth for FY23 following strong engine flying activity in the second half of the year, and believe the cash potential of the group remains significantly mispriced over the medium term, despite the shares’ strong run year-to-date.”
Tufan Erginbilgic was appointed as Rolls-Royce chief executive at the beginning of this year. His tenure has been promising so far, and he caused a stir after just a few days when he described the company as a “burning platform.”
In the FTSE 250, ITV fell 6.0% on sluggish revenue growth.
Total revenues in the nine months to September 30 were GBP2.98 billion, up just 0.9% from GBP2.95 billion a year earlier. In production arm ITV Studios, revenues rose 9.3% year-on-year to GBP1.52 billion, but in Media & Entertainment they fell 6.5% to GBP1.46 billion. M&E includes ITVX and the ITV television networks.
On the AIM, eEnergy rose by 47%.
The net-zero energy services received a “strategic investment” from partner Luceco.
Lighting manufacturer and distributor Luceco will invest GBP1.8 million in eEnergy.
Versarien plummeted 37%. The company said it had raised GBP454,822 through a placement of 165.4 million new shares at 0.275 pence per share.
The Cheltenham, England-based engineering materials company said it will use the proceeds from the placement for corporate and working capital purposes, as well as to provide bridge financing to extend cash resources pending the payment it expects to receive from the sale of assets.
In European shares, the CAC 40 in Paris finished 0.7% higher on Wednesday, while the DAX 40 in Frankfurt finished 0.5% higher.
Brent crude was trading at USD80.05 per barrel at the close of trading in London on Wednesday, down from USD82.55 at the end of Tuesday. Gold was trading at USD1,954.55 per ounce at the close of the London stock exchanges on Wednesday, up from USD1,963.77 at the close on Tuesday.
Thursday’s UK business calendar includes Endeavor Mining’s third-quarter results, as well as B&M European Value Retail’s half-year results. There will be trading statements from Taylor Wimpey and Domino’s Pizza.
The results of Airbus and Walt Disney will follow on Wednesday.
Thursday’s economic calendar includes CPI and PPI readings from China tonight. At 1330 GMT there is the US unemployment insurance weekly claims report.
By Sophie Rose, Alliance News senior reporter
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