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London share prices were flat to lower at midday on Wednesday, despite encouraging economic data and some well-received updates from UK companies.
The FTSE 100 index was down 4.92 points, 0.1%, at 7,752.44. The FTSE 250 was flat at 19,850.17, and the AIM All-Share was down 2.59 points, 2.6%, at 860.88.
The Cboe UK 100 was down 0.2% at 775.16. The Cboe UK 250 was down 0.1% at 17,330.00. The Cboe Small Companies was up 0.3% at 14,044.07.
UK producer input prices rose by 16.5% annually in December, slowing from the 18.0% annual rise seen in November, according to the Office for National Statistics. On a monthly basis, input prices fell 1.1% in December, compared to a revised monthly fall of 0.2% in November.
Wednesday’s PPI reading did not add much optimism for investors, following a gloomy set of UK economic data on Tuesday.
UK public sector borrowing - excluding public sector banks - in the final month of 2022 reached its highest December figure since monthly records began in 1993. Borrowing hit £27.4 billion, which was £16.7 billion higher than the previous year, and £9.8 billion higher than the latest official forecast from the Office for Budget Responsibility.
Also out on Tuesday, the UK composite purchasing managers’ index fell deeper into contraction territory in January to 47.8 points from 49.0 in December, according to the flash reading. The manufacturing PMI rose to 46.7 in January from 45.3 in December, but the services PMI fell to 48.0 from 49.9.
In European equities on Wednesday, both the CAC 40 in Paris and the DAX 40 in Frankfurt were down 0.5%.
Business sentiment in Germany improved at the beginning of the year, according to survey results released on Wednesday.
The ifo business climate index rose to 90.2 points in January from 88.6 in December. ‘This is due to considerably less pessimistic expectations. Companies were, however, somewhat less satisfied with their current situation,’ ifo explained.
The German government said it expects the country to narrowly escape a recession this year, as Europe’s biggest economy weathers the fallout from the Ukraine war better than expected. Germany is forecast to eke out growth of 0.2% in 2023, the economy ministry said in its latest projections.
Back in October, when fears were running high about soaring energy costs in the wake of Russia’s war in Ukraine, Berlin was bracing for a contraction in the German economy of 0.4%.
‘The further increase in the Ifo business climate index in January confirms that the recovery in German business sentiment that started at the end of 2022 has continued this year,’ commented Capital Economics.
‘But the fall in its current conditions index is a reminder that the economy is not out of the woods yet. We think GDP will at best stagnate in the first half of the year.’
The pound was quoted at $1.2312 at midday on Wednesday in London, down compared to $1.2323 at the close on Tuesday. The euro stood at $1.0862, down against $1.0881. Against the yen, the dollar was trading at JP¥129.74, down compared to JP¥129.89.
In the FTSE 100, Aviva shares were 3.0% higher in midday trade.
The London-based insurer left its returns guidance unchanged, as it put the cost of a UK cold snap late last year at £50 million.
Claims stemming from a UK freeze event in December amounted to £50 million, Aviva said, though it added that its ‘weather experience’ for 2022 was largely in line with its long-term average. It was only ‘marginally’ above the long-term average in the fourth quarter.
Aviva also maintained returns guidance. It said in November that it expects a 31.0 pence per share payout for 2022 and 32.5p for 2023. In addition, it said at the time that it intends to ‘return further capital to shareholders’ next year.
In the FTSE 250, Ascential surged 22%.
The business-to-business media and events firm said it is proposing to separate its worldwide digital commerce assets into an independent US-listed company. It also proposed to sell WGSN, with its UK listing continuing as an events company.
In its trading update, Ascential reported double-digit revenue growth across all four of its segments in 2022.
Ascential now expects revenue to be at least £520 million, ahead of the top end of the current consensus range of £479 million to £516 million. Adjusted earnings before interest, tax, depreciation and amortisation is now expected at £118 million, which is also ahead of the top end of the current consensus range.
In 2021, Ascential brought in revenue £349 million and adjusted Ebitda of £89 million.
Shore Capital said: ‘We are pleased to note the strong trading performance [of Ascential] and regard the group’s decision to unbundle/create greater structural clarity as a bold, if not entirely unexpected, move to realise the latent shareholder value that we have previously identified. The extent to which this succeeds will clearly depend on a range of factors including prevailing conditions in financial markets and whether today‘