Stocks mixed as FTSE 250 gives back ground ahead of budget

Stocks mixed as FTSE 250 gives back ground ahead of budget

Updated: 2 months, 14 days, 2 hours, 7 minutes, 36 seconds ago

London shares prices were mixed on Monday at midday, with UK domestic-oriented stock measures lower ahead of the autumn budget statement set for Thursday.

The pound was slightly lower but remained relatively strong.

The highly international FTSE 100 index was up 20.79 points, 0.3%, at 7,338.72. But the mid-cap FTSE 250 was down 176.50 points, or 0.9%, at 19,439.71, and the AIM All-Share was down 4.85 points, 0.6%, at 849.99.

"UK large cap underperformed small and mid cap substantially last week," explained Rupert Thompson, chief economist at wealth manager Kingswood.

"The FTSE 100 was unchanged while the FTSE 250 gained as much as 7.7%. The divergence was down both to the stronger pound, which hits large cap due to their bigger overseas exposure, and also the rebound in risk appetite which allowed small and mid cap to shrug off the depressing domestic economic news."

On Monday, the UK-focused FTSE 250 slipped ahead of a pivotal week for politics and economic data.

On Tuesday, UK unemployment figures will be released at 0700 GMT and Chancellor Jeremy Hunt will take questions from members of Parliament ahead of the autumn budget on Thursday. On Wednesday, producer price and consumer price index figures will be published, alongside the UK house price index. A retail sales print is due on Friday.

The Cboe UK 100 was up 0.2% at 734.01. The Cboe UK 250 was down 1.0% at 16,761.19, while the Cboe Small Companies was flat at 12,917.37.

The pound was quoted at $1.1762 on Monday afternoon in London, down slightly from $1.1781 late Friday. It had been quoted just above $1.18 earlier in the morning on Monday.

Stocks on the continent were higher. The CAC 40 index in Paris and the DAX 40 in Frankfurt were both up 0.4% in the early afternoon, as data from Eurostat showed that industrial production continued to increase across the eurozone in September.

Industrial production was up 0.9% in the euro area compared to August. Production had returned to growth in August, increasing by 1.5% after a 2.3% decline in July.

"The solid print is likely due to the easing of supply bottlenecks, which are cushioning the impact of lower demand, allowing for industry to work through its still-elevated backlogs," explained analysts at Oxford Economics.

Analysts at ING dubbed the figures a "dead cat bounce", however, saying there is "little hope" that this will be the start of a strong recovery.

"For the winter months we...continue to expect weaker production as the catch-up effect for production is unlikely to last much longer," ING added.

The euro traded at $1.0284 midday on Monday, down from $1.0326 on Friday.

Stocks in New York were called lower on Monday. The Dow Jones Industrial Average was pointed down 0.2%, the S&P 500 down 0.4%, and the Nasdaq Composite down 0.6%.

In London, Informa remained the best performer in the FTSE 100 at midday, up 6.5%.

The London-based business publisher and events organiser upgraded its full-year outlook on the back of strong underlying revenue growth in the first 10 months of the year.

In the 10-months to October, it reported underlying revenue growth of 41% in its continuing business against the previous year. For 2021, Informa had posted an underlying revenue of £1.80 billion.

"Growth has been consistent across all specialist markets and all geographic regions where Covid restrictions have been removed and are fully open. In the US, customer demand has been particularly strong as business to business activity has returned at pace," Informa said.

In the FTSE 250, Kainos was up 4.2%. The Belfast-based software firm reported a rise interim profit and revenue amid robust demand, which Chief Executive Brendan Mooney boasted has "never been higher".

In the six months that ended September 30, Kainos's pretax profit increased 11% to £27.5 million from £24.8 million in the same period last year. Its revenue increased 26% to £179.8 million from £142.3 million.

Commercial revenue increased 46% to £86.3 million from £59.3 million, representing 48% of total revenue, while Public Sector revenue increased 21% to £63.3 million from £52.3 million.

Ferrexpo was down 7.5% after Credit Suisse cut the Ukraine iron ore exporter to 'neutral' from 'outperform'.

In the small-caps, ME Group was up 8.4%, after it upgraded its full-year outlook thanks to a first-half performance which came in ahead of expectations.

The instant-service equipment firm noted a strong recovery across continental Europe and robust consumer demand for all its services, leading it to up its guidance for the year.

Revenue is now expected to be between £256 million and £262 million for the full-year ended October 31, up from £257 million previously. Earnings before interest, taxation, depreciation, and amortisation is now expected between £82 million and £85 million, up from between £79 million and £84 million previously.

On AIM, trading in the shares of Joules was suspended on Monday, as the cash-strapped retailer said refinancing discussions have failed, and it will call in administrators.

On Monday last week, the British lifestyles brand warned that trading underperformance had left its finances in a precarious state. Today, its board decided to file a notice of intention to appoint administrators.

Gold was priced at $1,756.11 an ounce midday Monday, down sharply from $1,763.60 late Friday. Brent oil fetched $94.98 a barrel, down from $96.32. Against the yen, the dollar was quoted at JP¥140.60, up from JP¥139.07 on Friday.

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Issue Date: 14 Nov 2022