Balfour Beatty Pops, GBPUSD Wavers Before US Retail Sales

Equities

On Wednesday, the FTSE 100 saw a modest increase of 0.3%, reaching a new nine-month high. This uplift came after data showed the UK economy began 2024 on a positive note, with a growth of 0.2% month-on-month in January. This growth, spurred by a rebound in retail and housebuilding, offered encouragement to Prime Minister Rishi Sunak ahead of an anticipated election this year.

Shell gained 1.2% following news of a planned job cut in its deals team by at least 20%. The broader energy sector also advanced by 1.4%, echoing an increase in crude prices. Meanwhile, the nonlife insurance sector saw a decrease of 2.0%, influenced by Direct Line's 4.3% drop after rejecting a revised buyout offer, claiming it undervalued the company.

Balfour Beatty enjoyed a surge of approximately 9.5% after announcing positive annual revenue and share buyback plans. Additionally, Man Group and Glencore saw increases of 2.4% and 4.8% respectively, with the latter benefiting from an upgrade to "buy" from Deutsche Bank.

The S&P 500 and Nasdaq closed the day lower, with the S&P 500 down by 0.2% and the Nasdaq by 0.5%. This shift came as investors took profits in chipmaker stocks amidst anticipation of producer price data and further insights on inflation trends ahead of the Federal Reserve's next meeting. The semiconductor index fell by 2.5% despite being up 17% year to date.

Intel's shares dropped by 4.4% following a report that the Pentagon had cancelled a planned $2.5 billion chip grant. Dollar Tree's shares took a significant hit, plummeting by 14.2% after announcing the closure of hundreds of stores and posting a net loss due to a substantial goodwill impairment charge. Furthermore, McDonald's shares fell by 3.9% with the CFO indicating a potential sequential fall in international sales for the current quarter.

Forex & Commodities

The US dollar saw a slight decline on Wednesday, moving down 0.1% to 102.85 against a basket of six currencies, despite recent gains of 1.5% this year. This followed a rise in the dollar after hotter-than-expected US inflation data was released. However, with economic data pending that could influence the Federal Reserve's interest rate decisions, investors appear to be consolidating gains. The British pound remained steady at $1.2795, even as the UK economy showed signs of growth in January. The euro experienced a slight uplift of 0.2% against the dollar, trading at $1.0951.

Gold prices dipped slightly by 0.2% to $2,171.05 per ounce, amidst a firmer dollar. Oil prices edged higher, with Brent futures for May increasing by 0.13% to $84.14 a barrel and April West Texas Intermediate crude also up by 0.13% to $79.82 per barrel. This rise is supported by strong demand in the US, highlighted by a significant drop in gasoline stocks and unexpected declines in crude stockpiles.