The FTSE 100 falls, eyes on the Fed

European stocks closed mixed at the start of the week, with attention turning to the minutes of Tuesday’s Federal Reserve meeting, as investors weigh the outlook for interest rates Americans.

The FTSE 100 index closed down 7.89 points, or 0.1%, at 7,496.36. The FTSE 250 rose 31.18 points, or 0.2%, to 18,599.05 points, and the AIM All-Share gained 2.90 points, or 0.4%, to 721.95 points.

The Cboe UK 100 finished 0.1% lower at 747.69, the Cboe UK 250 rose 0.2% to 16,101.44, and the Cboe Small Companies climbed 0.4% to 13,510. ,20.

In Europe, the CAC 40 closed up 0.2%, while the DAX 40 fell 0.1%.

In New York, the Dow Jones Industrial Average was up 0.3% as European markets closed. The S&P 500 was up 0.4%, while the Nasdaq Composite jumped 0.8%.

The pound sterling was trading at USD 1.2497 late Monday afternoon, higher than USD 1.2421 at the close of London stock markets on Friday. The euro was trading at 1.0942 USD, compared to 1.0881 USD at the close of European markets on Friday. Against the yen, the dollar was quoted at 148.32 yen, down from 149.77 yen.

“The U.S. dollar began the week with a relatively weak performance, extending its sell-off from last week and hitting a two-month low. Market expectations continue to tilt toward no interest rate hike in December and a potential rate cut as early as May, weighing on the currency as inflation has fallen and Treasury yields have fallen. will be released tomorrow, could provide further insight into policymakers’ ideas. Both the euro and the pound sterling have managed to maintain their positive trend while the dollar has collapsed. However, both currencies could experience some risks in the face of expectations regarding the next steps of their respective monetary policies and local economic developments,” commented Bas Kooijman, analyst at DHF Capital.

The minutes of the Federal Reserve’s latest meeting are released Tuesday, a day earlier than usual, due to the Thanksgiving holiday which shortens the trading week. New York’s financial markets will reopen Friday, but only for an abbreviated stock trading session.

At its meeting in early November, the Federal Reserve left interest rates unchanged. In a widely anticipated decision, the central bank unanimously decided to keep the key federal funds rate within a target range of 5.25% to 5.50%, its highest level in 22 years, where it has been there since July.

But since then, Chairman Jerome Powell has warned that the central bank will raise the rate again if necessary, which has provided some support for the dollar. The euro slipped below USD 1.07 following Mr Powell’s comments. But last week’s favorable US inflation data, which showed a slowdown in the annual rate to 3.2% in October from 3.7% in September, put the dollar in the hot seat.

Minutes of the Fed meeting are released at 1900 GMT. Elsewhere, the economic calendar features a reading of UK public sector finances at 0700 GMT, on the eve of UK Chancellor Jeremy Hunt’s all-important autumn statement.

Ahead of the announcement, British Prime Minister Rishi Sunak promised to cut taxes “in a prudent and sustainable way” after achieving his goal of cutting inflation in half.

The Prime Minister did not specify how the tax burden would be reduced.

But Mr Sunak said he was in a position to move on to the “next phase” of the government’s economic plan after inflation fell to 4.6% in October.

In London, Diploma shares jumped 10%. The provider of technical products and services reported a year of double-digit growth.

Revenue for the year ended September increased 19% year-on-year to £1.20 billion, up from £1.01 billion, or 8% on an organic basis, which is higher than its own forecast of 7%. At the same time, profit before tax increased by 20%, from £129.5 million to £155.6 million. Adjusted operating profit increased 24% to £237.0 million, above analyst consensus expectations compiled by the company of £230.9 million.

Ashtead fell 10%, making it the worst performer on the FTSE 100. She said she expected to deliver “record results” for her semester to October 31, but said the drop in Operational activity across all sectors affected its performance during the last quarter.

Ashtead said revenues at the end of the second quarter and the beginning of the third were affected by a decline in emergency response activities, due to a calmer hurricane season and fewer hurricanes. natural events such as forest fires. Likewise, in both quarters, its film and television businesses were affected by recent actors’ and writers’ strikes.

Shares of consumer goods companies Unilever and Reckitt, which closed down 0.4% and 1.3% on Monday, both hit 52-week lows. The two companies, both of which generate significant profits outside the UK, have suffered from the appreciation of the pound.

Insurer Admiral and homebuilder Berkeley Group shined, hitting 12-month highs. These two companies, which operate in sectors sensitive to strong interest rates, rose 0.9% and 0.7% on Monday.

Shell and BP also supported the FTSE 100, rising 1.3% and 0.6%. The duo followed the rise in Brent prices.

The barrel of Brent reached 82.78 USD at the end of the day on Monday, against 79.74 USD at the end of the day on Friday. Speculation is rife that Saudi Arabia could extend its production cuts to boost oil prices as the 13 members of OPEC and 10 other oil-producing countries, including Russia, or OPEC+, prepare to meet on Sunday.

Gold was trading at $1,974.08 an ounce late Monday afternoon, down from Friday’s $1,981.88.

Back in London, Capita rose 4.7% after announcing a 10-year contract to manage the UK civil service pension scheme for the cabinet office, starting in September 2025.

The London-based consultancy, transformation and digital services firm said the £239 million contract aims to modernize pension administration systems through improved system design and implementation. digital innovation.

Tuesday’s local business calendar includes half-year results from electronics seller AO World and flexible workspace provider Workspace Group.

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Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.