Stock prices in London were largely muted as investors maintained a cautious outlook amid the ongoing Middle East tensions and the impending interest rate decision by the European Central Bank tomorrow.
In a mixed trading session, the FTSE 100 index ended with a gain of 24.64 points, or 0.3%, at 7,414.34. The FTSE 250 saw a decline of 123.39 points, or 0.7%, finishing at 16,870.71, while the AIM All-Share index slipped by 4.63 points, or 0.7%, closing at 673.82.
Despite the optimism generated in Asian markets overnight by China’s announcement of a $137 billion infrastructure stimulus package, London stocks were not as enthusiastic. China’s plan to issue ¥1 trillion in sovereign bonds to bolster disaster prevention and recovery heightened concerns regarding the troubled property sector.
Stephen Innes, an analyst at SPI Asset Management, commented on the situation, noting, “Chinese stocks initially surged on the back of Beijing’s new stimulus measures and President Xi Jinping’s visit to the central bank, but the gains were short-lived. Scepticism and concerns over the troubled property sector weighed on investor sentiment, causing stocks to pare back their earlier advances.”
In the FTSE 100, Lloyds managed to gain 2.2% as it maintained annual net interest margin guidance and reported a third-quarter profit exceeding expectations, despite slightly missing top-line growth estimates. The lender’s net income for Q3 2023 rose to £4.51 billion from £4.48 billion, though it fell short of the consensus figure of £4.56 billion. Net interest income increased by 1.5% to £3.44 billion, marginally below the consensus of £3.45 billion. Looking ahead, Lloyds reaffirmed its goal of achieving a banking net interest margin ‘greater than’ 3.10%.
Danni Hewson, an analyst at AJ Bell, remarked, “The confidence in the full-year forecast came despite the net interest margin coming in a touch below expectations for the three-month period to September 30, which may explain why there is some lingering scepticism reflected in the reaction to today’s statement.”
Reckitt Benckiser saw a 4.0% decline as it reported a 3.4% increase in like-for-like sales in Q3 2023 to £2.60 billion. This growth was primarily driven by its Hygiene and Health segments, while its Nutrition division saw a 12% drop. Reckitt also initiated a £1 billion share buyback programme, set to commence soon and extend over the next year.
Mining companies enjoyed a more positive day, benefiting from the firming prices of oil and gold. Rio Tinto was among the top-performing FTSE 100 stocks, rising 1.9%, while Antofagasta closed up 1.4%, and Glencore gained 1.2%.
In the FTSE 250, Bytes Technology jumped by 6.3%. The computer software firm announced a 23% increase in pre-tax profit to £33.3 million for the six months ending August 31, up from £27.0 million the previous year. Revenue also saw a 16% rise to £108.7 million. In light of these robust earnings, Bytes Technology increased its interim dividend by 13% to 2.7 pence.
Essentra saw a 2.7% loss as it cited a “softer trading environment.” The company, which supplies components to various industries, reported a 7.1% decline in like-for-like and trading day-adjusted group revenue for Q3 2023.
On the AIM, Ethernity Networks shares surged to 1.75 pence as investors reacted to the news that the company no longer considers 5G Innovation’s $90,000 settlement notice as valid, related to a subscription agreement. Ethernity Networks is now seeking to reach an agreement on the treatment of the subscription while proceedings remain suspended.
