Stocks rise despite mixed US manufacturing data

(Alliance News) - European equities had a solid end to the week, and a stellar run for US markets continued, with focus turning to a key week of fiscal and monetary policy updates.

On Wednesday, the UK government delivers its latest budget, expected to be the final one before a general election. On Thursday, the European Central Bank announces its latest interest rate decision.

The FTSE 100 index rose 52.48 points, 0.7%, at 7,682.50. It fell 0.3% this week, however.

The FTSE 250 surged 299.51 points, 1.6%, at 19,354.38, and added 0.9% this week. The AIM All-Share rose 4.81 points, 0.7%, at 741.31 but lost 0.9% this week.

The Cboe UK 100 ended up 0.6% at 770.40, the Cboe UK 250 closed up 1.4% at 16,696.98, and the Cboe Small Companies added 0.4% to 14,517.04.

In European equities on Friday, the CAC 40 in Paris closed 0.1% higher, while the DAX 40 in Frankfurt rose 0.3%.

Across the Atlantic, New York stocks are called to open lower. The Dow Jones Industrial Average was up 0.1%, the S&P 500 index up 0.3% and the Nasdaq Composite 0.6% higher.

AJ Bell analyst Russ Mould commented: "Big name stocks like Palo Alto, Advanced Micro Devices, Salesforce, Micron Technology and Tesla have all delivered strong gains over the past week, and even market darling Nvidia has managed to push higher again which helps to support positive investor sentiment. The momentum seen across the pond spread to Europe at the end of the trading week."

There was some mixed US data to round off the week.

Readings of the US manufacturing economy painted a mixed picture on Friday, with one survey signalling stronger-than-expected growth, and another showing the sector suffered a greater decline than expected.

According to the S&P Global measure, the manufacturing purchasing managers' index climbed to 52.2 points in February, from 50.7 in January, and above the flash estimate of 51.5.

Rising further above the 50.0 no change mark, the latest reading suggested the pace of growth picked up.

The Institute for Supply Management PMI was not as robust.

The PMI fell deeper into contraction territory, coming in at 47.8 for February, from 49.1 in January. According to FXStreet cited consensus, a rise to 49.5 points was expected for last month, however.

The pound was quoted at USD1.2641 late Friday in London, slightly higher compared to USD1.2636 at the equities close on Thursday. The euro stood at USD1.0827, higher against USD1.0811. Against the yen, the dollar was trading at JPY150.25, higher compared to JPY149.82.

Consumer price inflation in the eurozone cooled last month, according to an official flash estimate on Friday, though by less than market expectations, giving the ECB some food for thought.

Eurostat said it estimates yearly harmonised consumer price inflation cooled to 2.6% in February, from 2.8% in January. The reading was slightly higher than FXStreet-cited market consensus of 2.5%.

"The disinflationary process continues gradually. That allows the ECB to start discussing the conditions for, and likely path of, the future cutting cycle. We still see signs of sticky underlying inflation, and we expect this to delay the start of easing," analysts at Rabobank commented.

Elsewhere in the central banking space, the Bank of England's top economist has said he believes a cut to UK interest rates is still "some way off".

Huw Pill, chief economist at the central bank, also warned that the economy is currently weak and said policymakers should not feel a "false sense of security" if inflation falls below the 2% target rate in the coming months.

Brent oil was quoted at USD84.08 late in London on Friday, up from USD82.13 late Thursday, as a ceasefire in Gaza remains scarce.

SP Angel analysts commented: "Crude oil prices edged higher on expectations that Opec+ would agree to extend production cuts, which are starting to be reflected in physical markets, together with increased tensions in Gaza."

Gold was quoted at USD2,075.33 an ounce, higher against USD2,045.84.

In London, Ocado shares fell 7.0%, as investors continue to mull over a spat with joint-venture partner Marks & Spencer.

Ocado on Thursday had said legal action against M&S could be an option. CEO Tim Steiner said he is confident the fellow retail firm owes it "a substantial amount of money" but hopes to secure a settlement over the dispute, PA reported.

M&S is due to pay Ocado a final instalment of GBP190.7 million as part of the payment for the GBP750 million Ocado Retail JV.

Ocado had said in its annual results: "Ocado Retail failed to meet the performance measures for the FY23 financial year that were required for automatic payment of the contingent consideration. However, the contractual arrangement with M&S expressly provides for the target to be adjusted for certain Ocado Retail management decisions or actions that differ from the assumptions used in the discounted cash flow model which underpinned the sale transaction."

M&S shares ended 1.0% lower.

Pearson climbed 5.4%. For 2023, the company delivered GBP3.67 billion in sales, down 4.3% from GBP3.84 billion in 2022. Pretax profit, however, was up 53% to GBP493 million from GBP323 million.

The provider of digital and virtual learnings materials proposed a final dividend of 15.7p, above 2022's 14.9p dividend, bringing the total amount returned to shareholders up to 22.7p from 21.5p in 2022.

ITV jumped 14% as investors responded well to the offloading of its entire interest in the BritBox streaming platform.

On Friday, the London-based television broadcaster and content producer said it was selling its 50% stake in Britbox to its joint venture partner, BBC Studios for GBP255 million.

ITV said it will return all the cash to shareholders through a share buyback, which will start after it releases full-year results on Thursday next week.

Elsewhere in London, eEnergy rose 29% after it announced an "exciting" funding deal with NatWest Group.

The London-based energy services provider said NatWest's National Westminster Bank PLC will provide up to GBP40 million in project funding. This facility will finance energy efficiency and onsite generation technologies for eEnergy's public sector customers.

"We are extremely pleased to announce this GBP40 million facility with NatWest, marking the beginning of a new collaboration between our two organisations," proclaimed Chief Executive Officer Harvey Sinclair. "This facility is the result of significant investment in honing our proposition to public sector customers and...has been structured to allow us to scale rapidly in a large addressable UK market."

Monday's economic calendar is quiet, but the week picks up pace with the UK's budget announcement on Wednesday.

UK Prime Minister Rishi Sunak hinted at a cut to national insurance in next week's spring budget as he spoke to journalists at the Scottish Tory conference.

The prime minister initially refused to be drawn on potential tax cuts to be announced by Chancellor Jeremy Hunt, but stressed his dislike for high national insurance.

Meanwhile, Sunak announced a press conference outside of his Downing Street residence at 1740 GMT on Friday.

Monday's local corporate calendar has annual results from shipping services firm Clarkson.

By Eric Cunha, Alliance News news editor

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