Blue-chip precious metals miner Fresnillo (LON:FRES) has been one of today’s noteworthy UK share prices, finding support in central bank action as the Federal Reserve hinted at the possibility of a rate cut down the road. In smaller London-listed shares, Dixons Carphone (LON:DC) has slumped deep into the red after updating investors on its performance this morning.
Fresnillo up, Carnival in the red
With both the Federal Reserve and Bank of England updating on their policy, investor attention has been focused on fundamentals rather than on corporate updates. Shares in Fresnillo have advanced with the Fed’s comments that rate cuts could start next month fuelling demand for gold.
“This marks a u-turn of its 2015-18 hiking cycle, and its patience since March 2019, and provides investors with more certainty about the outlook for the price of money,” Accendo Markets analyst Michael van Dulken said, as quoted by Reuters. Fresnillo’s shares have aged more than five percent in early afternoon trade in London, lending support to the blue-chip FTSE 100 index which is about 0.3 percent up.
At home, the Bank of England’s Monetary Policy Committee voted unanimously to maintain the Bank Rate at 0.75 percent, and the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion.
In other news, the Office for National Statistics reported today that UK retail sales had dropped 0.5 percent last month, with a strong decline of 4.5 percent in clothing sales, while the year-on-year growth rate in the average store price for clothing fell for the ninth consecutive month. Shares in Marks & Spencer Group (LON:MKS) are trading about 0.2 percent lower, while Burberry (LON:BRBY) is rallying nearly one percent.
Elsewhere on the FTSE 100 index, Russian steelmaker Evraz (LON:EVR) has slumped after a discounted share sale. Shares in the company are trading more than four percent in the red.
Carnival (LON:CCL) has slumped after lowering its earnings guidance amid voyage disruptions related to Carnival Vista, the US government’s policy change on travel to Cuba, as well as lower net revenue yields in the second half of the year.
“Recent booking trends have been impacted by ongoing geopolitical and macroeconomic headwinds affecting our Continental European brands. We continue to expect higher yields in our North America and Australia brands offset by lower yields in our Europe and Asia brands for the remainder of the year,” President and CEO Arnold Donald said in a statement.
Carnival’s shares are down by more than eight percent.
Whitbread (LON:WTB) is also in the doldrums in the wake of its trading update yesterday. Citywire quoted Richard Hunter, Head of Markets at interactive investor, as commenting that the Premier Inn owner had provided a cautious short-term outlook “and it is not easy to gauge where the next fillip for the share price may come from”.
“The current market consensus of the shares as a ‘hold’ is unlikely to come under upward pressure until its strategy begins to bear fruit,” he pointed out. Whitbread’s shares are 2.7 percent worse off.
In smaller London-listed companies, Dixons Carphone (LON:DC) has tumbled into the red as it reported a one-percent rise in group like-for-like revenue and a four-percent fall in UK & Ireland mobile like-for-like revenue for the 12 months ended April 27.
“It feels like the trend for switching phones to the latest model every year is truly a thing of the past. The latest phones are perfectly adequate to keep for a much longer time and consumers are finding better value by going for SIM-only deals rather than locking into a long-term contract with a specific network,” Russ Mould at AJ Bell commented, as quoted by Proactive Investors. The newswire also quoted George Salmon at Hargreaves Lansdown as noting that ‘some green shoots,’ with online and international operations growing, while the percentage of sales made on credit is rising as hoped. Dixons Carphone’s share price is more than 10 percent down in early afternoon trade.
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UK share prices to watch on Friday
Tomorrow’s UK share prices to watch will likely include Boohoo Group (LON:BOO), which is scheduled to hold its annual general meeting on Friday, after reporting earlier this month that its revenue had increased 39 percent in the three months ended May 31. The company further said that it continues to expect revenue growth to be between 25 percent and 30 percent, with an adjusted EBITDA margin of around 10 percent for FY20.
With little happening on the corporate front tomorrow, investors are also likely to focus on manufacturing and services data out of Germany, the eurozone and the US.
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