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LIVE: FTSE 100 stays lower, above its worst; UK manufacturing slowing

Published Jun 21, 2023 15:26
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© Reuters. LIVE: FTSE 100 stays lower, above its worst; UK manufacturing slowing
 
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Proactive Investors -

  • FTSE 100 above session high of 7,577.60
  • US stocks sink as Fed chair delivers testimony
  • UK May inflation steady at 8.7%

Manufacturing cautious

UK manufacturers expect to raise prices by the smallest amount since February 2021 over the next three months although price increases will still be much faster than their long-run average, according to a Confederation of British Industry (CBI) survey.

The CBI monthly index of manufacturers' average selling price expectations slowed to +19 in June from +21 in May, its lowest in more than two years but well above its long-run average of +7.

The CBI's monthly order book balance rose to a six-month high of -15 from -17 in May and were back close to their average levels, but the export order balance fell again to -29 from -26, the weakest since February 2021.

CBI deputy chief economist Anna Leach said manufacturing activity was likely to have shrunk a little during the second quarter due to weak demand.

"Total order books have improved a touch in recent months, but they remain fairly soft. And although output expectations have turned positive again, growth is expected to be quite weak in the three months to September," she noted.

The CBI's measure of output over the next three months improved to +4 from -5.

Powell talk eyed

The FTSE 100 remained weak, but held off session lows mid-afternoon, weighed by stubborn UK inflation and as US stocks started lower as investors eye the first day of Federal Reserve chair Jerome Powell’s semi-annual report to Congress.

Around 15 minutes after the New York open, the Dow Jones Industrial Average was down 145 points, or 0.4% at 33,908, while the broader S&P 500 index and the Nasdaq Composite also both lost 0.4%.

Powell intends to tell lawmakers that nearly all members of the Federal Open Market Committee (FOMC) expect to raise interest rates further in their bid to return inflation to their 2% target.

“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” he said in his prepared remarks.

“But at last week’s meeting, considering how far and how fast we have moved, we judged it prudent to hold the target range steady to allow the Committee to assess additional information and its implications for monetary policy.”

Powell is also expected to address the state of the US banking sector.

“The recent bank failures, including the failure of Silicon Valley Bank, and the resulting banking stress have highlighted the importance of ensuring we have the appropriate rules and supervisory practices for banks of this size,” he said in his remarks.

“We are committed to addressing these vulnerabilities to make for a stronger and more resilient banking system.”

A look at some of today’s movers

Risers

i-nexus Global - up 24% to 4.65p: Cloud-based software company i-nexus Global rallied on Wednesday following news of a proposal to raise £500,000 through a debt issuance to shareholders. Net proceeds will be applied entirely toward meeting the company's ongoing working capital requirements.

Avacta - up 8% to 114p: Shares jumped 8% as the AIM-listed life sciences firm reported the successful completion of the fifth dose escalation in its AVA6000 clinical trial. Data continues to show “a very favourable safety profile for the tumour-targeted chemotherapy,” Avacta said.

THG (LON:THG) - up 6% to 77.2p: The online retailer announced that its founder and boss, Matt Moulding, has given up his much-criticised right to veto hostile bid approaches. That in turn put the business, which recently was in bid talks with private equity group Apollo, firmly in play.

Halfords (LON:HFD) - up 5% to 201p: The UK's leading retailer of motoring and cycling products saw its shares rise by 5% on Wednesday following its projection of a modest 3% profit growth in the current financial year, even as consumers grapple with a cost-of-living crisis.

Chill Brands - up 6% to 8.8p: Shares surged higher as the company announced the expansion of its Chill.com product marketplace with a new agreement. The CBD group said it has signed a deal with Valet Seller, an e-commerce accelerator supporting over 500 direct-to-consumer brands. The partnership is intended to make it easier to add many more brands to the Chill.com website.

Fallers

Haydale Graphene - down 5% to 1p: Haydale Graphene saw its shares fall after the advanced materials company cautioned that project delays will impact its results for the year to 30 June 2023. The company said a number of projects which had been expected to start this month have been delayed until the first quarter next year.

Read more on Proactive Investors UK

Disclaimer

LIVE: FTSE 100 stays lower, above its worst; UK manufacturing slowing
 

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