UK's FTSE 100 Index Trades Higher, European Markets Closed for May Day Holiday

Bridgette Randall
01 May, 2024
Frankfurt

The benchmark index in London edged slightly higher as financial markets in Continental Europe were closed for the May Day holiday. 

The FTSE 100 index opened higher and bond yields held firm in thin trading as most traders were away in Zurich, Paris, Milan, and Frankfurt.

In April, benchmark indexes in London rose about 2.5%, but the DAX CAC-40 indexes dropped about 2% as investors adjusted rate-cut expectations and reacted to local corporate earnings. 

In the absence of local and regional economic news, investors awaited the release of the U.S. Fed's monetary policy announcements later in the day after the close. 

Fed policymakers are widely expected to hold the interest rate range between 5.25% and 5.50%, and investors are awaiting the Fed's direction on the level of interest rates. 

Investors had bid up stocks in the first quarter in the hopes that policymakers were ready to begin rate cuts as early as June, followed by as many as three additional cuts later in the year. 

However, those expectations have been lowered after several economic reports suggested that the U.S. economy and labor market conditions are more resilient than previously expected. 

Moreover, several inflation indicators have stayed above the expectations set by economists, with service inflation staying above 3%, indicating that policymakers may await cooler inflation before lowering rates. 

The lowered rate cut expectations had a direct and negative effect on investor sentiment, driving the U.S. benchmark indexes lower by 4% in April. 

 

Europe Indexes and Yields

Financial markets in Frankfurt and Paris were close for the May Day holiday, and the FTSE 100 index in London inched higher by 0.1% to 8,150.17.

The yield on 10-year German bonds edged up to 2.58%; French bonds inched higher to 3.07%; the UK gilts edged higher to 4.38%; and Italian bonds inched lower to 3.87%.

The euro edged higher to $1.066; the British pound inched higher to $1.249; and the U.S. dollar edged higher to 92.06 Swiss cents.

Brent crude decreased $1.50 to $84.82 a barrel, and the Dutch TTF natural gas fell by €0.69 to €28.70 per MWh.

 

Europe Stock Movers

Aston Martin Lagonda Global declined 4.6% to 141.43 pence after the luxury automaker reported a wider-than-expected loss in the first quarter. 

Revenue in the first quarter declined by 26% to £945 million from £1.3 billion; pre-tax losses expanded to £138.8 million from £74.2 million; and net debt increased by 20% to £1.04 billion from £868.1 million a year ago. 

The company said vehicle sales declined in the quarter after it introduced new products, ended production of several core products, and ramped up production of the new Vantage, upgraded DBX 707, and V12 sports car. 

Vehicle sales in the first quarter dropped 26% to 945 from 1,269 units in the corresponding period a year ago. 

Next plc increased 0.1% to 9,020.49 pence after the apparel retailer reiterated its full-year outlook. 

Revenue in the first quarter increased 5.7% from a year ago, driven by an 8.8% rise in online sales and flat in-store sales. 

The retailer projected a full-year 2024 consolidated sales increase of 6% to £6.2 billion, a pre-tax profit rise of 4.6% to £960 million, and an after-tax earnings per share gain of 4.8% to 606.3 pence. 

GSK plc increased 2.2% to 1,706.75 pence after the pharmaceutical company reported a better-than-expected 27% increase in its core operating profit in the first quarter. 

Revenue in the first quarter increased 10% to 7.4 billion, core operating profit soared 27% to 2.4 billion, and earnings per share declined 19% to 25.7 pence. 

The company announced a 15-pence per share cash dividend. 

The pharmaceutical company's full-year sales are likely towards the upper end of its previously announced sales growth range of between 5% and 7%, with core operating profit rising between 9% and 11% and core earnings per share rising between 8% and 10%. 

Domino's Pizza Group PLC decreased 0.7% to 323.40 pence after the company reported weaker-than-expected quarterly results. 

Comparable sales in the first quarter declined by 0.5%, and total orders fell by 0.8% from the previous year, but on a two-year basis, comparable sales rose by 8.4%. 

Total system sales in the first quarter declined 0.4% to £385.1 million from £386.6 million, and total orders on a comparable basis fell 0.8% to 17.7 million from 17.8 million a year ago. 

Total orders fell 1.8% to 17.7 million from 18.0 million.