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Energy firms lifted the UK’s primary stock index on Wednesday as investors analysed important inflation data for insights into future domestic policy and eagerly anticipated the U.S. Federal Reserve’s interest rate decision later in the day. The FTSE 100 index rose by 0.17%. Energy emerged as one of the leading sectors, increasing by 0.7%, likely due to rising crude oil prices. In contrast, telecom stocks experienced the most significant decline, falling by 1.2%. Just one day before the Bank of England’s rate decision, data indicated that British inflation reached an eight-month peak in November. However, a steady underlying measure of price growth provided some relief, negatively impacting the sterling and simultaneously supporting stock prices. Following the unexpectedly strong rebound in wage growth reported yesterday, it seems highly unlikely that the BoE will surprise us with an early Christmas gift in the form of another interest rate cut tomorrow. Traders anticipate that the Bank of England will reduce rates by approximately 58 basis points in 2025, compared to the 53 basis points projected before the data was released, according to LSEG data. The key event this week is the Federal Reserve’s policy announcement later today, where a 25-basis point cut is anticipated. Attention will be focused on the summary of economic projections and remarks from Chair Jerome Powell for any indications regarding next year’s policy adjustments.Single Stock Stories:
Home improvement retailer Kingfisher saw its shares increase by as much as 2%, making it one of the top percentage gainers on the FTSE 100 index. The company has agreed to sell its Brico Depot Romania business to Altex Romania for an enterprise value of 70 million euros ($73.6 million). The transaction, which includes a network of 31 stores across 24 cities, distribution operations, and the head office in Bucharest, is expected to be finalized in the first half of FY26. Investec noted that the deal was anticipated since Kingfisher has never turned a profit in Romania, and the sale will allow the group to concentrate on its operations in the UK, France, Poland, and Spain. The stock is down approximately 22% as of the last closing.
Shares of Shoe Zone Plc have plummeted by as much as 49.5% to 70p, marking their lowest point since October 2021. The discount footwear retailer now projects an adjusted pre-tax profit of at least 5 million pounds ($6.3 million) for FY25, a decrease from previous estimates of 10 million pounds. Shoe Zone has announced that it will not be paying a final dividend for the financial year ending September 28, 2024. The Leicester-based company has reported very difficult trading conditions in the first two months of the current financial year and in early December, attributed to declining consumer confidence and unseasonable weather. Currently, the stock is down 38.6%, bringing year-to-date losses to approximately 64%.
Broker Updates:
Shares of OSB Group, a British lender, dropped 7.6% to 397.8 pence. The stock is the biggest loser on the FTSE mid-cap index, which is up 0.14%. Peel Hunt has downgraded the stock from ‘add’ to ‘hold’ and raised the price target to 414p from 395p. They stated, “Due to ongoing weak conditions in the mortgage market and a recent £1.25 billion securitization issue, we now anticipate negative loan growth in 2024 and lower growth than previously expected for both 2025 and 2026.” However, the brokerage believes that its outlook for OSB’s medium-term returns has been slightly improved. Including today’s losses, the stock has declined 16.5% year-to-date.
Technical & Trade ViewFTSE Bias: Bullish Above Bearish below 8225
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