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(Alliance News) - London's FTSE 100 struggled for direction early Thursday, with a mixed slate of corporate updates, US interest rate worries and underwhelming China data preventing it from making more confident progress in early trade.
The FTSE 100 index opened up 4.73 points, 0.1%, at 7,406.45. The FTSE 250 rose 10.04 points, 0.1%, at 17,856.30 and the AIM All-Share was down 0.78 of a point, 0.1%, at 700.90.
The Cboe UK 100 was flat at 739.36, the Cboe UK 250 was also flat at 15,492.95, and the Cboe Small Companies edged down 0.1% to 12,920.93.
In European equities, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt rose 0.1%.
In Tokyo, the Nikkei 225 rose 1.5%. The Shanghai Composite in China ended flat. The Hang Seng was 0.3% lower, though Sydney's S&P/ASX 200 closed up 0.3%.
China slipped back into deflation in October, highlighting the work officials have in reviving still-sluggish demand in the world's number two economy.
The consumer price index, the main gauge of inflation, fell 0.2% on-year, according to the National Bureau of Statistics. The index had been unchanged year-on-year in September and edged up 0.1% in August.
In New York on Wednesday, the Dow Jones Industrial Average closed down 0.1%, though the S&P 500 and Nasdaq Composite both added 0.1%.
The US Federal Reserve is likely done raising interest rates to tackle inflation but probably won't cut them "in the short term," a senior policymaker said Wednesday.
Philadelphia Fed President Patrick Harker told a conference in Evanston, Illinois, that he felt holding interest rates at their current, restrictive, level was the right course of action.
"With monetary policy, there are always lags. Holding the rate steady will give those lags time to catch up," said Harker, a member of the Fed's rate-setting committee.
Harker spoke after remarks from Fed Chair Powell. Investors were hoping for some guidance from Powell on Wednesday, but he gave little away about interest rates. He did not comment on the outlook for the US economy, either.
Powell speaks again at 1900 GMT. Also still to come on Thursday is the latest US jobless claims reading at 1330 GMT.
The pound traded at USD1.2284 on Thursday morning, down from USD1.2300 at the time of the London equities close on Wednesday. The euro was largely unmoved at USD1.0705 from USD1.0707. Against the yen, the greenback climbed to JPY150.94 from JPY150.83.
Gold faded to USD1,948.57 an ounce on Thursday morning in London, from USD1,954.55 at the time of the European equities close on Wednesday.
A barrel of Brent Crude fetched USD80.12 early Thursday, up from USD80.05 late Wednesday afternoon, though it traded below the USD80 mark earlier.
Shell fell 0.5% in London early Thursday, while fellow oil major BP lost 0.9%.
Elsewhere in London, Flutter Entertainment shed 10% with the Paddy Power owner's outlook disappointing as the firm grapples with punter-friendly sports results.
It now expects US revenue of GBP3.75 billion, around the middle of its previous GBP3.6 billion to GBP3.9 billion range. US adjusted earnings before interest, tax, depreciation and amortisation of GBP140 million are expected, around the middle of its GBP90 million to GBP190 million range. Excluding the US, it expects group revenue at the bottom of its GBP1.44 billion to GBP1.6 billion range.
Total revenue in the third-quarter of 2023 was 7.6% higher at GBP2.04 billion from GBP1.89 billion a year prior.
Looking to next year, Flutter expects to list on the New York Stock Exchange in the first quarter of 2024. It will delist from Euronext Dublin "simultaneously or shortly prior to this".
Retailer B&M gave back 4.7%. It said revenue in the half-year to September 23 rose 10% to GBP2.55 billion from GBP2.31 billion. Pretax profit grew 11% to GBP222 million from GBP201 million. It lifted its ordinary dividend by 2.0% to 5.1 pence from 5.0p.
"In the first six weeks of the golden quarter, B&M UK like-for-like growth has been 1.6%. Momentum has been particularly strong in the last three weeks, with LFL exit growth of 4.5%," the firm said.
Peel Hunt analysts said B&M start to the Christmas period has been "satisfactory without being eye-catching".
On the up, AstraZeneca rose 2.9% as it lifted guidance, posted a better third-quarter and announced a deal in the burgeoning weight loss drug space.
Total revenue in the third quarter of 2023 rose 4.6% on-year to USD11.49 billion from USD10.98 billion. Pretax profit was 79% higher at USD1.65 billion from USD922 million, the drugmaker said.
AstraZeneca reported core earnings per share growth of 4% to US1.73. It now expects full-year core EPS growth in the "low double-digit to low-teens percentage" range at constant currency. It had previously predicted "high single-digit to low double-digit percentage" growth.
AstraZeneca said it has also landed a pact focused on an obesity drug. It has entered into an exclusive licence agreement for ECC5004 with biopharmaceutical firm Eccogene. Eccogene gets USD185 million upfront and could receive an additional USD1.83 billion in future "clinical, regulatory, and commercial milestones and tiered royalties on product net sales".
The threat of competition for Novo Nordisk, a dominant force in the weight loss drug space, sent the firm's shares 1.5% lower in Copenhagen.
New York-listed Eli Lilly has also looked to make moves in the weight loss drug space. Late Wednesday, it said the US Food & Drug Administration approved its Zepbound injection for obesity treatment. The stock rose 0.3% after hours.
Also impressing, Auto Trader added 6.8%. Revenue in the automotive marketplace's first-half ended September 30 rose 12% to GBP280.5 million from GBP249.8 million. Its pretax profit was 10% higher at GBP162.8 million from GBP148.0 million.
Budget carrier Wizz Air, down 6.3% and insurer Lancashire Holdings, up 10%, were contrasting performers among London-listed mid-caps.
Wizz Air's revenue in the first-half to September 30 was 39% higher at EUR3.05 billion and Chief Executive Jozsef Varadi said "positive bookings" continued in the third-quarter. However, investors are fretting about what the conflict in the Middle East means for Wizz Air.
The airline has suspended Israel capacity until the end of November, though is "redeploying" it elsewhere. Measured in available seat kilometres, Israel represented 5%-6% of total capacity in the first-half.
Lancashire reported 23% year-on-year growth in gross premiums written to USD1.56 billion for the nine months to September 30.
It also announced a capital return of up to USD169 million, USD119 million through a special dividend and the remainder via a buyback.
It also added Philip Broadley as a non-executive director and chair designate. Broadley is expected to take on the chair role following the firm's 2024 annual general meeting. He is currently a non-exec at Legal & General and senior independent director at AstraZeneca, roles he is expected to continue.
Elsewhere in London, S4 Capital slumped 8.5%. It reported a decline in third-quarter revenue as clients were cautious "to commit and extended sales cycles".
Revenue in the three months to September 30 fell 18% to GBP245.9 million from GBP300.1 million a year prior.
Executive Chair Martin Sorrell said: "Trading in the third quarter was difficult, reflecting the global macroeconomic conditions with continued client caution to commit and extended sales cycles, particularly for larger projects and to some extent clients in the Technology sector."
For the full-year, it now expects an operational Ebitda margin of around 10% to 11%, the guidance cut from a range of 12% to 13.5%.
Sorrell added: "We remain confident our strategy, business model and talent, together with scaled client relationships position us well for above average growth in the longer term, with an emphasis on deploying free cash flow to dividends and share buybacks, especially as in 2024 will have no further merger payments."
By Eric Cunha, Alliance News news editor
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