By Sruthi Shankar
-London’s main stock indexes edged higher on Thursday, tracking an upbeat mood on Wall Street following quarterly numbers from U.S. electric carmaker Tesla, while investors weighed mixed UK earnings ahead of key central bank decisions next week.
The blue-chip FTSE 100 rose 0.2%, while the midcap FTSE 250 index added 0.4%.
Futures tipped Wall Street indexes to open higher after Tesla slightly beat Wall Street targets for fourth-quarter revenue and profit.
“There is increased risk appetite this morning, partly thanks to strong results from Tesla which is lifting U.S. futures and European equities,” said Victoria Scholar, head of investment at Interactive Investor.
Investors will also focus on a slew of central bank decisions next week for clues on the rate-hike trajectory. Signs of cooling inflation have recently spurred hopes that the U.S. Federal Reserve will switch to smaller rate hikes.
“The rhetoric around rate hikes – whether for the Fed, the ECB or the BoE – is that 2022 was a year of aggressive rate hikes and while there is more to be done, we are entering a new phase that could bring about some less aggressive moves, starting with the Fed,” said Scholar.
Investors are betting on a 50-basis-point rate hike by the Bank of England (BoE) next week as inflation remains in double-digit territory. Traders, however, have almost fully priced in a 25 bps rate hike by the Fed.
Among companies that reported, Diageo fell 5.7% after the world’s largest spirits maker beat first-half sales forecasts, but traders appeared to focus on the U.S. sales miss.
Wizz Air fell 7% from eight-month highs hit in the prior session, after the Hungarian budget airline was upbeat on summer demand for travel but more cautious than its competitors.
Shares of Fevertree tumbled 7.1% after the tonic maker warned that inflationary pressures are expected to remain in 2023 with further double-digit percentage hikes across its key input costs.