Stocks mixed as eyes on US inflation data

(Alliance News) - Stock prices in London closed mixed Monday, with oil majors holding down higher gains in the FTSE 100 index.

Investors are also nervously looking ahead to the week's key inflation prints and what they will mean for interest rates.

The FTSE 100 index closed up 4.58 points, 0.1%, at 7,694.19. The FTSE 250 ended up 183.41 points, 1.0%, at 19,393.80, and the AIM All-Share closed down 0.42 of a point, or 0.1%, at 750.82.

The Cboe UK 100 ended down marginally at 767.89, the Cboe UK 250 closed up 1.1% at 16,900.98, and the Cboe Small Companies ended down 0.1% at 14944.78.

In European equities on Monday, the CAC 40 in Paris ended up 0.3%, while the DAX 40 in Frankfurt ended up 0.7%.

Investors cut their bets on an early US interest rate reduction after a robust US jobs report late last week. According to the Bureau of Labor Statistics, the US economy added 216,000 jobs in December, beating the FXStreet cited consensus of 170,000 additions.

Eyes have now shifted onto US inflation data. The US consumer inflation print is due out at 1330 GMT on Thursday.

"US inflation figures scheduled for Thursday could either help get markets out of their mild New Year funk or put shares under renewed pressure, so this release will be closely monitored," said AJ Bell investment director Russ Mould.

After US inflation data, eyes will turn onto China's inflation reading, which is due out on Friday.

Stocks in New York were mixed at the London equities close. The DJIA was down 0.2%, whilst the S&P 500 index up 0.5% and the Nasdaq Composite up 1.1%.

The pound was quoted at USD1.2757 at the London equities close Monday, higher compared to USD1.2738 at the close on Friday. The euro stood at USD1.0974 at the European equities close Monday, up against USD1.0966 at the same time on Friday. Against the yen, the dollar was trading at JPY143.84, down compared to JPY144.29 late Friday.

Oil majors weighed on the FTSE 100 index, hurt by weaker commodity prices and a less-than-stellar update from Shell.

Brent oil was quoted at USD75.73 a barrel at the London equities close Monday, down from USD78.82 late Friday.

Shell shares declined 3.2%. BP fell 2.6% in a negative read-across.

Shell expects to pay impairment charges between USD2.5 billion and USD4.5 billion in the fourth quarter of 2023, compared to the USD700 million a year prior.

The oil major said the impairments for the most recent quarter are driven by portfolio choices, such as its Singapore Chemicals & Productions assets, which Reuters had reported Shell plans to sell by the end of 2024.

Meanwhile, oil prices fell more than 1% on Monday due to Saudi Arabia cutting prices coupled with rising Opec output, outweighing upward price pressure amid geopolitical jitters in the Middle East, Danske Bank said.

On the other hand, Legal & General rose 2.8%.

Berenberg lifted its recommendation for the stock to 'buy' from 'hold'.

The German bank believes the macro environment for L&G is better at this start of this year than it was at the beginning of the last.

"This time, the macroeconomic outlook in our view is likely to support the L&G share price, as well as the share performance for the wider UK life insurance sector. Fears of credit risk and real estate valuations are subsiding, but the benefits of higher interest rates for L&G, such as strong annuity volumes, are here to stay, and we expect strong annuity volumes to drive a step-up in capital generation," Berenberg said.

In the FTSE 250, Drax jumped 9.3%.

According to a report from the Telegraph on Monday, the UK's once "dirtiest" coal-fired power station Drax is set to receive approval for a multibillion-pound net-zero carbon capture plan from the UK government.

Despite green opposition, UK Energy Secretary Claire Coutinho is expected to approve a scheme to bolt two massive carbon capture plants onto the North Yorkshire plant's four generating units, the Telegraph reported, potentially removing almost all of its carbon dioxide emissions.

The scheme has infuriated environmental activists who are already angered by Drax's switch to wood from coal.

Plus500 rose 7.5%, after it said full-year revenue and earnings are "significantly ahead" of market expectations, and that it looks to the year ahead with "continued confidence."

The London-based financial technology company providing online trading services said it expects revenue of USD725 million for 2023, down 13% from USD832.6 million in 2022.

Elsewhere, CMC Markets surged 22%.

The trading services provider lifted guidance for full-year net operating income to between GBP290 million and GBP310 million from GBP250 million to GBP280 million. This will be up from GBP288.4 million in financial 2023. The financial year for CMC ends on March 31.

CMC Markets reported a "strong performance" in its financial third quarter, amid improved market conditions and led by an increased contribution from its institutional business.

Gold was quoted at USD2,032.33 an ounce at the London equities close Monday, lower against USD2,051.00 at the close on Friday.

In Tuesday's UK corporate calendar, B&M will publish a trading statement. There are also half year results from Games Workshop.

The economic calendar for Tuesday sees an unemployment reading for the eurozone at 0900 GMT. The British Retail Consortium-KPMG retail sales monitor will be published overnight.

By Sophie Rose, Alliance News senior reporter

Comments and questions to [e-mail]

Copyright 2024 Alliance News Ltd. All Rights Reserved.