Stocks in Europe ended mixed and off early highs on Thursday after the European Central Bank signalled it was nearing the end of its rate-cutting cycle.
The FTSE 100 index closed up 9.75 points, 0.1%, at 8,811.04. It had earlier traded as high as 8,838.84.
The FTSE 250 ended 49.63 points lower, 0.2%, at 21,069.38, and the AIM All-Share closed up just 0.11 of a point at 754.46.
In European equities on Thursday, the CAC 40 in Paris fell 0.1%, while the DAX 40 in Frankfurt firmed 0.2%. Both indices had traded higher earlier in the trading session.
The ECB lowered its three key interest rates by 25 basis points on Thursday, bringing the rate on the deposit facility to 2.00%, the main refinancing operations to 2.15%, and the marginal lending facility to 2.40%.
At the press conference, ECB president Christine Lagarde said the bank is getting to the end of the monetary policy cycle but refused to declare victory on inflation.
“Victory laps are always nice, but there is always another battle,” Ms Lagarde told reporters.
But, she added: “I think we are getting to the end of a monetary policy cycle that was responding to compounded shocks, including Covid, the war in Ukraine … and the energy crisis.”
“This was a hawkish surprise that the market was not expecting,” Kathleen Brooks at XTB Research said.
“Although the ECB is still expected to cut rates one more time, the market is pricing in a 45% chance of a cut in September, which is down from a 55% chance of a cut earlier this week,” she added.
The pound was quoted up at 1.3596 US dollars late on Thursday afternoon in London, compared to 1.3566 dollars at the equities close on Wednesday. The euro stood higher at 1.1456 dollars against 1.1425 dollars.
ING still expects the ECB to cut rates in September.
“Unless trade tensions escalate again, the often mentioned direction of travel for the ECB over the summer is clear: vacation, before cutting rates once more in September,” the broker said.
Against the yen, the dollar was trading higher at 143.57 yen compared to 142.98 yen.
In New York, the Dow Jones Industrial Average was up 0.3% at the time of the London equities close on Thursday, the S&P 500 was up 0.4% and the Nasdaq Composite was 0.7% higher.
Chinese state media reported that President Xi Jinping had held a widely anticipated call with US President Donald Trump, with investors hoping it could ease trade tensions – but no details were provided.
The call follows officials from the world’s two biggest economies accusing each other of jeopardising a trade war truce agreed last month in Geneva.
The yield on the US 10-year Treasury widened slightly to 4.39% from 4.38% on Wednesday. The yield on the US 30-year Treasury narrowed to 4.89% from 4.90%.
In London, results, M&A activity and another potential lost listing prompted some dramatic share price moves.
Fintech Wise jumped 6.6% as it announced plans to transfer its primary equity listing to “a US stock exchange” in a further blow to the London stock market.
“We believe the addition of a primary US listing would help us accelerate our mission and bring substantial strategic and capital market benefits to Wise and our owners,” Wise chief executive Kristo Kaarmann said.
The London-based financial technology company which provides global money transfers said it will maintain a secondary listing on the London Stock Exchange.
AJ Bell’s Russ Mould said the UK stock market is “like a boxer determined to keep going in a gruelling fight”.
“While the FTSE 100’s share price performance might have beaten the main US indices this year, the broader UK stock market continues to take a succession of blows to the head from a reputational perspective,” he remarked.
“Takeovers are coming thick and fast, IPOs remain scarce, and more companies are looking Stateside for their main stock listing in hope of a higher valuation,” he added.
Faring better, boots maker Dr Martens strode ahead by 24% as it signalled a return to growth in the year ahead and a refreshed strategy.
Dr Martens said it is “shifting the business from a channel-first to a consumer-first mindset”, aiming to give “more people more reasons to buy more of our products”.
Dr Martens’ products are sold in more than 60 countries, with 239 stores across the world with revenue split between boots (57%), shoes (26%), sandals (12%) and bags & other (5%).
But Wizz Air plunged 27% after the Eastern Europe-focused budget airline reported a more than 90% fall in annual profit.
The Budapest-based carrier posted pre-tax profit of 19.7 million euros for the financial year that ended March 31, down 94% from 341.1 million euros, despite a 3.8% rise in revenue to 5.27 billion euros from 5.07 billion euros, amid higher costs.
Wizz also suffered from having 42 aircraft grounded as of the end of March due to GTF engine issues. This was since reduced to 37 in May and is expected to be reduced to 34 by the end of the first half of the current financial year.
Wizz declined to give detailed guidance for the current year due to “the lack of visibility across our trading seasons” although it said it expects higher revenue.
Marlowe rose 6.7% after it accepted a £366 million takeover from Mitie, which fell 13%.
Mitie, the Glasgow-based engineering, security, cleaning and hygiene services provider said the cash and shares offer values each share in Marlowe at 466 pence each.
Mitie chief executive Phil Bentley said the deal will “generate significant revenue growth opportunities as well as immediate cost efficiencies”.
Marlowe interim non-executive chair Lord Ashcroft said the terms represent “excellent value” for shareholders.
Mitie believes the enlarged group can deliver £30 million of pre-tax recurring operating cost synergies which will be achieved in the second full financial year following completion.
Brent oil was higher at 65.51 dollars a barrel at the time of the London equities close on Thursday, compared to 64.65 dollars on Wednesday.
The price of gold eased to 3,364.84 dollars an ounce on Thursday against 3,374.32 dollars on Wednesday.
The biggest risers on the FTSE 100 were Antofagasta, up 97.50 pence at 1,947.50p, Fresnillo, up 63.00 pence at 1,325.00p, Babcock International, up 39.00p at 1,105.00p, Smith & Nephew, up 34.50p at 1,117.00p and British American Tobacco, up 106.00p at 3,497.00p.
The biggest fallers on the FTSE 100 were Diageo, down 85.50p at 1,953.50p, WPP, down 23.80p at 557.60p, J Sainsbury, down 10.00p at 274.20p, Vodafone, down 2.38p at 73.50p, and Pershing Square Holdings, down 94.00p, at 3,846.00p.
Friday’s UK corporate calendar has full-year results from Bango.
The global economic calendar on Friday has the US jobs report including nonfarm payrolls, eurozone GDP and retail sales figures and Canadian jobless data.
Contributed by Alliance News.
