The FTSE 100 in the green, gold flirts with the highest of the year

  • FTSE 100 up 23 points
  • The British pound hits a 10-month high
  • Gold flirts with the top of the year

Food inflation fell slightly to 20.6% in February, according to the latest figures from the CGA.

The figure is below the record high of 22.9% recorded in December, and the CGA said there was “clear evidence” that price increases were starting to slow.

James Ashurst, chief executive of business management consultancy Prestige Purchasing, said margin pressure will continue for operators in 2023.

“Although the rate of increase will slow, supplier food prices will continue to rise over the course of the year,” Ashurst said.

Sainsbury’s fell 0.5% to 276p, while Tesco gained 0.7% to 266p.

Supermarkets have long lamented the soaring prices, although they have remained coy about why they have remained high, especially as commodity prices have fallen significantly over the past 12 months.

Prices for key ingredients, such as wheat, palm oil and oats, have all fallen significantly over the past 12 months, leaving customers wondering why their purse strings are stretched.

10:13 a.m .: Standard Chartered goes up on an optimistic note

Standard Chartered gained 1.7% to 627p on the bank of an upbeat rating from Jefferies, making it the second biggest riser behind Premier Inn owner Whitbread on the FTSE 100.

Analysts at the U.S. bank said a 22% decline in shares since March looks “tough” against the backdrop of favorable operating trends.

Specifically, Jefferies believes Standard Chartered can improve its return on tangible equity by 4% to 11% in 2024 as revenues grow, the company generates positive operating leverage and extends share buybacks by 3 billions of additional dollars.

The broader FTSE 100 rose 0.2% to 7,861.

10:00 a.m.: Iron ore rises above three-month low

Prices for iron ore shipments with delivery of 63.5 percent iron core content in Tianjin were $120, approaching the three-month low of $119.5 hit on April 7.

Tropical cyclones in Australia have missed iron ore export hubs, allaying concerns that producers will have to suspend shipments.

Elsewhere, lower steel production in China has also helped keep prices under pressure,

Shares of Rio Tinto fell 0.56%, while BHP gained 0.24%.

Iron ore pellet producer Ferrexpo rose 1.28%, ignoring low prices.

The FTSE 100 was down 20 points, or 0.26%, at 7,863.

9:30 am: the pound reaches its highest level in 10 months

The pound hit a 10-month high against the dollar, with £1 getting you US$1.2517.

The general weakness in the US dollar has pushed the pound higher as it becomes increasingly likely that the Fed will end its fiscal tightening soon.

However, the Bank of England is expected to continue raising interest rates to fight inflation, which has remained above 10% for the past six months.

Last week, the central bank’s chief economist, Phil Huw, said it could not be sure it had raised interest rates enough to bring inflation under control.

To complicate matters further, UK GDP came to a halt in February.

9:00 a.m.: Ocado leads the FTSE 100

The FTSE 100 continued to trade in positive territory, with the index adding 19 points to 7,862 points.

Ocado was in the lead, up 1.8%, as the online retailer and robotics company saw a positive cross-read of AO World results, which provided a more optimistic outlook for purely online gamers. .

Shares of ASOS and Boohoo also rose, gaining 1.4% and 0.9%.

The white goods online player was able to improve its profit forecast for the year, which is expected to be in the high end of the £37.5m range.

With a lack of economic news in the UK, all eyes are on the US, with a retail sales announcement scheduled for midday.

However, the main news likely to impact the markets today concerns US bank earnings.

Today’s results from companies like JPMorgan and Citigroup are the first since the bankruptcies of SVB and Credit Suisse and will shed light on the health of credit.

8:43 am: Europe in force

Major stock exchanges across Europe also continued to rise, with investors increasingly betting that central banks are about to end their aggressive rate hike policies.

The DAX in Germany gained 0.35% on Friday, while the CAC 40 in France continues to break records despite ongoing strikes in the country, up 0.3%.

The Stoxx 600, which represents 600 companies of varying sizes across the continent, gained 0.3% while Spain’s Ibex 35 lagged its peers slightly, up 0.17%.

After weaker US inflation figures earlier in the week, investors bet on central banks, particularly the US Federal Reserve, to halt interest rate hikes.

Singapore, Australia, Canada, India and South Korea are already among the countries that have halted further increases, at least for now.

The FTSE 100 gained 12 points to 7,854.

8:30 a.m.: Miners lead the way

The FTSE 100 started off on the right foot, posting gains of 17 points to 7,861.

Fresnillo and Glencore lead the index, up 1.08% and 0.91%, as copper prices continue to hover above US$4.1/lb.

At the other end, National Grid trails the index after losing 1% after saying new government tax treatments are expected to have a “net negative impact” on its underlying earnings in coming years.

The UK’s introduction of “full spend” relief for capital expenditure, which runs until March 2026, is expected to be “economically neutral” overall for National Grid.

However, the company said the rule changes will lead to a reduction in revenue from the UK electricity transmission and distribution business, and a corresponding increase in deferred tax liabilities calculated according to the standards. IFRS.

These impacts will result in a net negative effect on the statutory and operating result, but should not affect the company’s results for the past year.

Some broader market news, and Superday issued a profit warning after saying sales rose at a slower pace than expected. The fashion brand added that it may look to the market to raise funds.

Elsewhere, online electricity retailer AO World improved its forecast on positive traction from its efforts to cut costs and improve margins and expects profit to peak at 37.5 million of pounds sterling.

8:01 am: The gold continues to shine

Gold continues to flirt with year highs as investors await what looks to be a busy day with a string of US banks posting earnings, including JPMorgan and Citigroup.

The precious metal hit a yearly high in trade late yesterday at US$2,048 and has maintained levels above US$2,040 ever since.

As for banks, this will be the first time that US lenders have reported earnings following the collapse of SVB and Credit Suisse, with all eyes firmly on the strength of business and consumer lending. .

“When JPMorgan released its report at the end of its last fiscal year, the bank set aside a sizable reserve build of $1.4 billion, following a sharp rise in borrowing costs to 2, $3 billion due to a deteriorating economic outlook, with the bank saying it has a baseline assumption of a mild recession,” said Michael Hewson, chief market analyst at CMC Markets.

“These concerns have only been heightened in light of recent events, with the focus this U.S. banking earnings season on the impact of the recent turmoil on industry earnings numbers, not just in terms of impact of loan demand, whether in mortgage loans or credit card loans, but also in terms of deposit inflows.

7:04 am: FTSE on the front foot

The FTSE 100 is set to start the final day of the trading week in the limelight with Dechra Pharmaceuticlals PLC in the spotlight after confirming it received a bid approach after the London market closed on Thursday.

Spread betting companies are calling the London lead index around 19 points.

Dechra said it has entered into discussions with private equity firm EQT for a possible cash offer for the veterinary pharmaceutical company.

Under the terms of the eventual offer, Dechra shareholders would receive 4,070 pence per ordinary share in cash, a premium of around 49% to Thursday’s closing price of 2,733.53 pence.

Dechra said it has informed EQT that it will recommend the potential offer if EQT announces a firm intention to make an offer.

In the United States, stocks rose on Thursday, led by tech heavyweights.

The Dow Jones Industrial Average closed up 383.19 points, or 1.1%, at 34,029.69. The S&P 500 firmed 54.27 points, or 1.3%, to 4,146.22, while the Nasdaq Composite jumped 236.93 points, or 2.0%, to 12,166.27.

Large-cap tech stocks performed strongly with shares of Amazon up 4.7%, Google’s parent company Alphabet up 2.7%, while Meta and electric vehicle maker Tesla both rose 3.0%.

Back in London, the focus will be on updates from betting company 888 Holdings and recruiting group Hays.

While later today, US reporting season is in full swing with results from banking giants Wells Fargo, JPMorgan and Citigroup.

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