Shares were a little higher at the start of the week as investors shrugged off freezing temperatures in London and pessimistic forecasts for the UK economy went unheeded. EYhelped by heightened speculation of a slowing in the speed of US rate hikes.
It is also against this backdrop that City analysts were considering the outlook for financial markets on both sides of the pond.
“While there may be some logic to the argument that we may have seen spikes in US markets, given their performance over the past few months, there is less of an argument when you look at the markets in Europe, which look set to open later this morning,” said Michael Hewson, chief market analyst at CMC Markets United Kingdom.
“Valuations in Europe are lower to begin with, and on a much more attractive income/dividend basis, compared to the US, with the FTSE100 and DAX both trading at forward dividend yields of 3.77% and 3.36% respectively.”
As of 0825 GMT, the FTSE 100 traded down 0.10% at 7,778.88 while the pound edged up 0.14% to 1.2414.
Dragging the greenback, at the end of the previous week, Federal Reserve Governor Christopher Waller joined the ranks of senior officials arguing for a drop in the pace of rate hikes to 25 basis points per meeting.
At last count, the US dollar index was down 0.23% at 101.78, after hitting an intra-session low of 101.60 overnight.
The euro/dollar hit a high of 1.0927 in Asian trading, putting it “a few pips away from the major 50% retracement on the 2021-2022 selloff,” noted Swissquote analyst Ipek Ozkardeskaya.
EY’s updated forecast, released on Monday, predicted a decline in UK gross domestic product of 0.7% in 2023, down from the 0.3% contraction it forecast in October, the Guardian reported.
Projections for 2024 and 2025 have also been revised down from 2.4% and 2.3% to 1.9% and 2.2%, respectively.
Most markets in Asia remained closed on Monday for the Lunar New Year holiday across Asia-Pacific, although those that remained open generally performed well.
On Saturday, China’s Center for Disease Control and Prevention said the current wave of Covid-19 has already infected around four-fifths of the country’s population, according to a Reuters report.
Richard Hunter, Head of Markets at Interactive Investor also noted early reports that China’s travel demand in the new year had exceeded expectations, which “could bode well as a sign of recovery in both economic activity and consumption.” “.
At 15:00 GMT, the American Conference Board would publish its index of the main economic indicators for the month of December. Meanwhile, Eurostat was due to release its preliminary reading of consumer confidence in the single currency bloc for the month of January.
The data would be followed at 17:45 GMT by a speech by European Central Bank chief Christine Lagarde at Deutsche Boerse’s annual reception.
The main economic releases of the week would be released on Thursday and Friday, in the form of the latest inflation data from the United States. Investors were also expecting quarterly earnings from about a quarter of the S&P 500 constituents.
Saga studies asset sales, National Express and Balfour Beatty land deals
Saga, the specialist provider of products and services to the over 50s has confirmed that it is in talks to possibly sell Acromas Insurance Company Limited to reduce its debt. Its board of directors “concluded that a potential divestiture of its underwriting business is consistent with the group’s strategy and would crystallize value and enhance long-term returns for shareholders”.
National Express Group said his German company had won a billion-euro contract to operate the RE1 and RE11 Rhein-Ruhr-Express (RRX) rail lines until 2033. The company took over operation of both lines in February 2022 through an emergency contract. National Express now operates the three light RRX batches of assets under long-term contracts, the company announced on Monday.
Infrastructure Group Balfour Beatty said it had been awarded a £1.2 billion contract by UK National Highways to deliver a package of works for the Lower Thames Crossing project. The company said it would be responsible for designing and delivering more than 10 miles of new motorway as part of the new Thames Tunnel project to ease congestion in southern England.
Primary health properties has bought Irish property management company Axis Technical Services and signed a long-term agreement giving access to a strong portfolio of future primary care projects in Ireland, the company announced on Monday. Axis manages a portfolio of more than 30 properties, including the majority of PHP’s Irish portfolio, he added. No financial details were disclosed.
FTSE 100 (UKX) 7,785.28 0.19%
FTSE 250 (MCX) 19,792.02 0.45%
techMARK (TASX) 4,464.87 0.19%
FTSE 100 – Risers
Ocado Group (OCDO) 725.60p 2.51%
Admiral Group (ADM) 2,128.00p 1.58%
Sage Group (SGE) 771.40p 1.45%
Barratt Developments (BDEV) 451.30p 1.39%
Khaki (PSN) 1,392.00p 1.35%
Halma (HLMA) 2,131.00p 1.24%
Antofagasta (ANTO) 1,750.50p 1.18%
Associated British Foods (ABF) 1,848.00p 1.18%
Taylor Wimpey (TW.) 114.25p 1.15%
Endeavor Mining (EDV) 2,000.00p 1.01%
FTSE 100 – Slaughterhouses
Croda International (CRDA) 6,866.00p -2.53%
Fresnillo (FRES) 905.40p -1.20%
Severn Trent (SVT) 2,786.00p -1.10%
AstraZeneca (AZN) 11,088.00p -1.00%
Information (INF) 659.20p -0.84%
St. James Square (STJ) 1,225.50p -0.77%
Burberry Group (BRBY) 2,340.00p -0.76%
Johnson Matthey (JMAT) 2,120.00p -0.70%
Flutter Entertainment (CDI) (FLTR) 12,490.00p -0.60%
Hull (SHEL) 2,349.50p -0.57%
FTSE 250 – Risers
National Express Group (NEX) 145.00p 5.45%
Greencoat UK Wind (UKW) 160.40p 4.50%
Spirent Communications (SPT) 232.40p 3.29%
Dr. Martens (DOCS) 143.70p 2.94%
Close Brothers Group (CBG) 958.50p 2.24%
Tallow oil (TLW) 38.12p 2.09%
Clarkson (CKN) 3,220.00p 2.06%
International Distribution Services (IDS) 225.50p 1.90%
IP Group (IPO) 62.10p 1.80%
Vietnam Enterprise Investments (DI) (VEIL) 630.00p 1.78%
FTSE 250 – Slaughterhouses
Shares BH Macro Ltd. GBP (BHMG) 4,375.00p -2.34%
Schroder Oriental Income Fund Ltd. (SELF) 270.00p -1.28%
Bank of Georgia Group (BGEO) 2,670.00p -0.93%
SSP Group (SSPG) 258.60p -0.88%
Page group (PAGE) 455.40p -0.83%
Finsbury Growth and Income Trust (FGT) 858.00p -0.81%
ASOS (ASC) 772.00p -0.77%
Playtech (PTEC) 543.00p -0.73%
Urban Logistics REIT (SHED) 139.00p -0.71%
Wetherspoon (JD) (JDW) 478.80p -0.62%