London open: Stocks edge lower as Fed signals just one rate cut this year

13th Jun 2024 07:57

(Sharecast News) - London stocks edged lower in early trade on Thursday as investors mulled the latest policy announcement from the US Federal Reserve, which signalled there would be just one rate cut this year.

At 0825 BST, the FTSE 100 was down 0.2% at 8,199.64.

The Fed held interest rates on Wednesday at between 5.25% and 5.5% and marked down its forecast for the number of rate cuts this year to just one from three in March.

Oxford Economics said: "The FOMC's updated projections won't change our forecast for two rate cuts this year, however, with the first to come in September.

"We expect a string of more favourable inflation releases - on the heels of Wednesday's softer-than-expected May CPI report - will clear the way for the Fed to lower rates in September."

On home shores, a survey released earlier by the Royal Institution of Chartered Surveyors (RICS) showed the recovery in the housing market "slipped into reverse" after Prime Minister Rishi Sunak called a general election.

The monthly net balance of house prices fell to -17 in May from a downwardly revised -7 in April, marking the lowest reading since January.

Meanwhile, the RICS new buyer enquiries gauge fell to -8 from -1, marking the lowest reading since November.

RICS senior economist Tarrant Parsons said: "The recent recovery across the UK housing market appears to have slipped into reverse of late, with buyer demand losing momentum slightly on the back of the upward moves seen in mortgage rates over the past couple of months.

"Nevertheless, expectations point to this delaying, rather than derailing, a modest improvement going forward."

In equity markets, Intermediate Capital, Land Securities, JD Sports, Compass and LondonMetric all fell as they traded without entitlement to the dividend.

St James's Place was in the red as it appointed the chief financial officer of Credit Suisse's UK operations - Caroline Waddington - as its new CFO, replacing Craig Gentle who will be retiring from the business after six years leading the finance function.

On the upside, BT Group rallied after Mexican billionaire Carlos Slim took a 3.2% stake in the telecoms firm. According to a regulatory filing late on Wednesday, the stake - worth around £400m - was taken by Slim's family business Inbursa.

Halma gained after it reported another year of record profit and revenue as it hailed a solid performance in the safety and the environment & analysis sectors. In the year to the end of March 2024, adjusted pre-tax profit rose 10% to £396.4m on revenue of £2.03bn, up 10% on the previous year.

Virgin Money was little changed after it posted an 18% jump in interim profit as it continued to benefit from higher interest rates and a lower bad debt charge, but said it expected headwinds in the second half of the year with the Bank of England expected to cut its benchmark base rate.

Pre-tax profit for the six months to March 31 came in at £279m from £236m a year earlier. Net interest income rose 2% to £868m, while net interest margin - the difference between the bank's lending and savings rates - was up three basis points to 1.94%.

Market Movers

FTSE 100 (UKX) 8,199.64 -0.19%

FTSE 250 (MCX) 20,477.06 -0.10%

techMARK (TASX) 4,816.02 0.01%

FTSE 100 - Risers

BT Group (BT.A) 131.20p 1.39%

Legal & General Group (LGEN) 231.30p 0.65%

Halma (HLMA) 2,362.00p 0.51%

Smith (DS) (SMDS) 360.40p 0.50%

Relx plc (REL) 3,587.00p 0.42%

Haleon (HLN) 322.10p 0.41%

GSK (GSK) 1,611.50p 0.40%

British American Tobacco (BATS) 2,387.00p 0.25%

Shell (SHEL) 2,751.00p 0.24%

Beazley (BEZ) 674.50p 0.22%

FTSE 100 - Fallers

Intermediate Capital Group (ICG) 2,256.00p -4.08%

Land Securities Group (LAND) 625.00p -2.72%

Ashtead Group (AHT) 5,670.00p -1.56%

Prudential (PRU) 715.20p -1.41%

Anglo American (AAL) 2,342.00p -1.37%

St James's Place (STJ) 526.50p -1.22%

JD Sports Fashion (JD.) 122.95p -1.17%

B&M European Value Retail S.A. (DI) (BME) 468.00p -1.12%

Compass Group (CPG) 2,217.00p -0.98%

International Consolidated Airlines Group SA (CDI) (IAG) 168.35p -0.85%

FTSE 250 - Risers

IP Group (IPO) 48.95p 4.48%

Wetherspoon (J.D.) (JDW) 772.00p 3.49%

AJ Bell (AJB) 391.00p 2.76%

Primary Health Properties (PHP) 94.35p 2.67%

Telecom Plus (TEP) 1,928.00p 2.55%

Supermarket Income Reit (SUPR) 74.60p 2.33%

Auction Technology Group (ATG) 576.00p 2.31%

Spire Healthcare Group (SPI) 249.50p 2.25%

Domino's Pizza Group (DOM) 328.80p 2.24%

Jupiter Fund Management (JUP) 79.00p 2.20%

FTSE 250 - Fallers

LondonMetric Property (LMP) 195.40p -3.36%

Mobico Group (MCG) 49.46p -3.02%

Coats Group (COA) 81.40p -2.86%

Essentra (ESNT) 164.20p -2.49%

Discoverie Group (DSCV) 700.00p -2.37%

3i Infrastructure (3IN) 320.00p -2.14%

Vesuvius (VSVS) 469.00p -1.99%

OSB Group (OSB) 461.40p -1.87%

Me Group International (MEGP) 165.00p -1.79%

SThree (STEM) 420.00p -1.64%