Stocks slightly down pre US Fed, Bank of England

(Alliance News) - Stock prices in London closed mutedly lower on Monday, ahead of a busy week of interest rate decisions and economic data.

The FTSE 100 index closed down 2.35 points, marginally down, at 7,632.74. The FTSE 250 ended down 26.86 points, 0.1%, at 19,311.16, and the AIM All-Share closed down 0.42 of a point, marginally lower, at 750.28.

The Cboe UK 100 ended down 0.2% at 762.54. The Cboe UK 250 closed down 0.3% at 16,752.96, and the Cboe Small Companies ended down 0.2% at 14,918.53.

In European equities, the CAC 40 in Paris ended up 0.1%, while the DAX 40 in Frankfurt ended down 0.2%.

The economic calendar for this week has the US Federal Reserve announcing its latest interest rate decision on Wednesday at 1900 GMT, followed by the Bank of England on Thursday at 1200 GMT. Both central banks are expected to keep rates on hold.

"The Fed is expected to keep policy on hold this Wednesday, but Chair Powell should walk back some of his ultra-dovish comments from the December meeting. US data remain strong and jobs data this Friday should see another [non-farm payroll] reading near 200,000," said Brown Brothers Harriman.

BDSwiss analyst Daniel Takieddine commented: "The pound saw limited movement ahead of the Bank of England meeting later this week. Traders continue to see the bank keeping rates unchanged but could look forward to any hints regarding the next steps in monetary policy. However, economic conditions could remain a source of risks for the currency.

"As a result, the pound may find short-term support if the BoE maintains its hawkish stance, but could face downward pressure if economic conditions continue to deteriorate in the medium term."

On Tuesday, there are gross domestic product readings from the eurozone and Germany. On Thursday, there is inflation data from the eurozone. Across the pond, in the US, there are nonfarm payrolls out on Friday.

The pound was quoted at USD1.2675 at the equities close on Monday in London, lower compared to USD1.2721 on Friday. The euro stood at USD1.0802, lower against USD1.0866. Against the yen, the dollar was trading at JPY147,72, down compared to JPY147.92.

On the FTSE 100, Fresnillo led gains, rising 9.8% despite RBC and Berenberg both cutting their price targets for the Mexico-focused gold and silver miner.

Shell and BP both rose 0.9%, tracking higher oil prices. Brent oil was quoted at USD82.01 a barrel at the equities close in London on Monday, up from USD81.36 late Friday.

A drone attack on a base in Jordan killed three US troops and wounded more than 30 on Sunday, with President Joe Biden blaming Iran-backed militants and vowing to hold the perpetrators to account. It is the first time American military personnel have been killed by hostile fire in the Middle East since the war between Israel and Iran-backed Hamas began.

Flutter closed down 0.9%, after the Paddy Power owner said it plans to shift its primary stock market listing to New York from London, after "supportive" talks with US investors.

Its shares began trading in the US on Monday, and the firm said it believes the New York Stock Exchange is "now the optimal location" for a primary listing. A switch to the NYSE "should be made as soon as practicable", the FTSE 100 listing added.

Flutter will put a proposal forward to shareholders at its May 1 annual general meeting. If backed, the switch could take place late in the second quarter or early in the third.

On the FTSE 250, Ferrexpo closed down 2.5%, after it said that a Ukrainian court of appeal confirmed a USD125 million claim against the company over loan agreements.

Ferrexpo said the claim was made against Ferrexpo Poltava Mining. FPM now will file an appeal to the Supreme Court in Ukraine, with Ferrexpo saying the local subsidiary has "compelling arguments to defend its position".

Ferrexpo is a Baar, Switzerland-based iron ore pellet producer in Ukraine, supplying the pellets to steelmakers globally. It said its operations in Ukraine remain unaffected by the legal case.

Elsewhere, Supreme rose 10%, after it unveiled a GBP1 million share buyback, announced strong trading and moved to soothe investor worry related to a UK clampdown on disposable vaping products.

Supreme said it enjoyed an "excellent trading performance" in the three months to December 31, its third-quarter, which is traditionally its busiest.

The announcement came after the UK announced a possible crackdown on disposable vapes. Supreme said it is "ahead of the curve" and has already implemented "a number of proactive measures".

Prime Minister Rishi Sunak set out plans to get rid of disposable vapes to protect children's health as he faces a backlash from the Tory right over his proposed tobacco sale ban.

It is already illegal to sell vapes to anyone under 18, but evidence shows disposable vapes – which are cheaper and sold in smaller, more colourful packaging than refillable ones – are driving the rise in youth vaping.

The ban is expected to come into force at the end of 2024 or the start of 2025.

Digital 9 Infrastructure jumped 5.5%, after it said it plans to put forward a proposal for a managed wind-down of the company.

The London-based investor in internet infrastructure, such as data centres and subsea fibre, said that the decision was "carefully considered", and intends to immediately begin sale preparations for its wholly-owned assets ahead of launching competitive processes later this year.

Stocks in New York were higher at the London equities close, with the DJIA marginally up, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.3%.

Gold was quoted at USD2,026.77 an ounce at the London equities close on Monday, higher against USD2,018.76 on Friday.

In Tuesday's UK corporate calendar, Diageo posts its half-year results.

By Greg Rosenvinge, Alliance News senior reporter

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