FTSE 100 up as US inflation cools in June

(Alliance News) - Stock prices in London opened mixed on Friday, after data showed that US inflation cooled in June.

The FTSE 100 index opened up 33.51 points, 0.4%, at 8,256.85. The FTSE 250 was down 14.25 points, 0.1%, at 21,174.66, and the AIM All-Share was up 1.04 points, 0.1%, at 782.57.

The Cboe UK 100 was up 0.4% at 824.03, the Cboe UK 250 was up slightly at 18,438.38, and the Cboe Small Companies was down slightly at 17,306.82.

In European equities on Friday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.1%.

In the US on Thursday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.1%, the S&P 500 down 0.9% and the Nasdaq Composite down 2.0%.

"I don't know for the Federal Reserve (Fed) but investors definitely got to the evidence that inflation is on a right path to justify a Fed rate cut sooner rather than later yesterday after the latest CPI report printed a slower-than-expected figures both for headline and core inflation, both on a monthly and on a yearly basis," said Ipek Ozkardeskaya at Swissquote Bank.

The Bureau of Labor Statistics reported that the year-on-year consumer price inflation rate was 3.0% in June, cooling from a 3.3% rise in May. According to FXStreet, markets were expecting CPI to come in at 3.1% for June.

On a monthly basis, consumer prices declined 0.1% in June, after being unchanged in May from April. Prices had been expected to register a 0.1% increase this time around, so the latest reading undershot the consensus.

The US is making "significant progress fighting inflation," President Joe Biden said Thursday, after consumer inflation figures for June came in cooler than anticipated.

"Prices are falling for cars, appliances, and airfares, and grocery prices have fallen since the beginning of the year," Biden added, though conceding that overall costs are "still too high" as he battles to win reelection this year.

Friday's economic calendar has US producer price data at 1330 BST.

Also on Thursday, Biden insisted that he will run for another term as US president and beat Donald Trump, as a string of verbal gaffes at a major summit threw a harsh new spotlight on his fitness.

In a high stakes press conference at the end of the NATO summit in Washington, the 81-year-old acknowledged the need to "allay fears" among Democrats but said he was determined not to step aside.

His bid to portray himself as in command was undermined by introducing Ukraine's President Volodymyr Zelensky as his Russian foe Vladimir Putin earlier in the day, and then referring to Vice President Kamala Harris as "Vice President Trump" at the news conference.

The pound was quoted at USD1.2924 early on Friday in London, higher compared to USD1.2920 at the equities close on Thursday. The euro stood at USD1.0873, virtually unchanged against USD1.0872. Against the yen, the dollar was trading at JPY159.30, higher compared to JPY158.57.

In the FTSE 100, International Consolidated Airlines lost 1.4%, placing it at the bottom of the index.

HSBC cut the Aer Lingus, Iberia and British Airways-owner to 'buy' from 'hold'.

In the FTSE 250, Ashmore lost 3.4%.

The London-based emerging markets-focused investment manager said assets under management in the quarter ended June 30 fell by 5% to USD49.5 billion from USD51.9 billion in the quarter ended March 31.

"Emerging Markets returns have been positive over the past year and Ashmore has delivered outperformance across a broad range of strategies, but in contrast to this point in previous cycles, investor risk appetite remains subdued and institutional decisions to reduce emerging markets exposure continue to drive net outflows. This trend was notable in the blended debt theme this quarter, which, combined with small net outflows from corporate debt and equities, exceeded the net inflows into the local currency and external debt themes," Ashmore explained.

On London's AIM, System1 jumped 9.1%.

The London-based owner of a marketing decision-making platform updated markets on the first quarter of its financial year, ending March 31. It noted that revenue of GBP9.5 million was 53% higher annually.

CEO James Gregory said: "Customer demand was exceptionally strong in the first quarter, somewhat ahead of our own expectation. It's early in the year but this strong first quarter performance puts us firmly on track for sustainable growth and to achieve our full year expectation."

In Asia on Friday, the Nikkei 225 index in Tokyo was down 2.5%. In China, the Shanghai Composite was up slightly, while the Hang Seng index in Hong Kong was up 2.7%. The S&P/ASX 200 in Sydney closed up 0.9%.

Brent oil was quoted at USD85.93 a barrel early in London on Friday, up from USD85.47 late Thursday. Gold was quoted at USD2,400.50 an ounce, lower against USD2,422.61.

By Sophie Rose, Alliance News senior reporter

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