Stocks down ahead of US Fed minutes

(Alliance News) - Stock prices in London closed lower on Wednesday, as investors nervously look ahead to the latest US Federal Reserve meeting minutes.

The FTSE 100 index closed down 39.19 points, 0.5%, at 7,682.33. The FTSE 250 ended down 185.40 points, 1.0%, at 19,326.40, and the AIM All-Share closed down 7.40 points, down 1.0%, at 754.15.

The Cboe UK 100 ended down 0.4% at 766.89, the Cboe UK 250 closed down 1.1% at 16,780.39, and the Cboe Small Companies ended down 0.6% at 14,860.40.

"The FTSE 100 marked its 40th birthday with a celebration more akin to a quiet pint in an empty pub than anything more befitting of a major landmark," said AJ Bell analyst Russ Mould.

There was little to celebrate on Wednesday, with investors cautiously eyeing the US Federal Reserve minutes. They are out at 1900 GMT.

Analysts are hoping to find some context around the Federal Reserve's dovish pivot in December.

There was also some US manufacturing data, as well as the latest jobs opening reading to digest on Wednesday afternoon.

The US manufacturing sector continued to contract, but at a slightly slower rate. The Institute for Supply Management's manufacturing purchasing managers index rose to 47.4 in December, from 46.7 in November. According to FXStreet, the figure was expected to be slightly lower at 47.1.

"The overall economy continued in contraction for a third month after one month of weak expansion preceded by nine months of contraction and a 30-month period of expansion before that," noted Timothy Fiore, chair of the ISM.

Also on Wednesday, the US Bureau of Labor Statistics published the number of job openings in November.

The number of job openings decreased to 8.790 million on the last business day in November from 8.852 million a month earlier. This was below FXStreet consensus of 8.85 million.

Stocks in New York were lower at the London equities close, with the DJIA down 0.7%, the S&P 500 index down 0.6%, and the Nasdaq Composite down 0.8%.

In European equities on Wednesday, the CAC 40 in Paris ended down 1.8%, while the DAX 40 in Frankfurt ended down 1.5%.

The pound was quoted at USD1.2646 at the London equities close Wednesday, higher compared to USD1.2620 at the close on Tuesday. The euro stood at USD1.0915 at the European equities close Wednesday, down against USD1.0955 at the same time on Tuesday. Against the yen, the dollar was trading at JPY143.50, higher compared to JPY141.74 late Tuesday.

In London, Tesco and Sainsbury's both added 1.6%. Meanwhile, Marks & Spencer rose 2.2%

The UK grocery sector had its busiest festive period since the onset of the Covid-19 pandemic four years ago, numbers from Kantar showed, while price inflation worries for consumers abated.

Kantar said grocery sales in the 12 weeks to December 24 rose 6.9% to GBP36.45 billion from GBP34.10 billion a year before. In the final four weeks of that period alone, sales totalled GBP13.7 billion.

Annual grocery price inflation in December eased to 6.7% from 9.1% in the four weeks to November 26. December's figure was the tamest level since April 2022, and Kantar said it was the sharpest monthly slowdown it has ever recorded.

This has prompted interest rate talk in the UK. AJ Bell's Mould said that the latest data "will add grist to the mill on calls for the Bank of England to consider interest rate cuts."

However, in the past few weeks, there has also been tension in the Red Sea which has prompted inflation worries as oil prices continue to push higher.

Brent oil was quoted at USD78.13 a barrel at the London equities close Wednesday, up from USD77.75 late Tuesday.

On Wednesday, oil firms BP and Shell were up 0.3% and 0.9%, respectively.

Elsewhere on London's FTSE 100, GSK rose 2.7%

Jefferies raised GSK to 'buy' from 'hold'.

In the FTSE 250, Wizz Air lost 4.2%, after the Budapest-based airline said it carried 5.0 million passengers in December, up 19% from 4.2 million the year prior. Capacity for the month was 22% higher at 6.0 million seats, compared to 4.9 million seats in December 2022.

Its load factor fell year-on-year, however, to 82.1% from 84.5%.

Ryanair, meanwhile, said it carried 12.5 million passengers in December, up 8.7% from 11.5 million in the corresponding month last year. Its load factor fell by one point to 91% from 92% the year before.

Ryanair added that it operated 72,500 flights in December, but noted that over 900 flights were cancelled due to the Israel-Gaza conflict.

Shares were down 4.8% in Dublin.

On AIM, C4X Discovery surged 29%, after the drug discovery company said it received a USD11.0 million milestone payment from FTSE 100-listed pharmaceutical firm AstraZeneca, following trials of the C4X respiratory disease therapy treatment.

The payment stems from preclinical progress of C4X's NRF2 Activator programme, an oral therapy for the treatment of inflammatory and respiratory diseases which AstraZeneca is developing following a agreement between the two in November.

In addition to a USD2.0 million upfront payment, the global licencing agreement for the NRF2 Activator entitles C4X to receive up to USD400.0 million in payments following preclinical, clinical development and commercial milestones. The deal also will grant C4X tiered mid-single digit royalties on future sales of the NRF2.

AstraZeneca shares closed down 0.6%.

Gold was quoted at USD2,038.89 an ounce at the London equities close Wednesday, down against USD2,064.66 at the close on Tuesday.

In Thursday's UK corporate calendar, there are trading statements from M&C Saatchi, Mattioli Woods, and Next.

The economic calendar for Thursday has there are a slew of service PMI readings from China, the eurozone, the UK and the US.

By Sophie Rose, Alliance News senior reporter

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