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Global stocks hit record high amid interest rate cut hopes

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Published Time: 15.05.2024 - 10:40:31 Modified Time: 15.05.2024 - 10:40:31

Spencer Platt/Getty Images Chosen by us to get you up to speed at a glanceGlobal stock have risen to a record high amid hopes that the US is on track to start cutting interest rates later this year

: Spencer Platt/Getty Images

Chosen by us to get you up to speed at a glance

Global stock have risen to a record high amid hopes that the US is on track to start cutting interest rates later this year.

The MSCI All Country World Indexa measure of stock prices around the globerose 0.1pc after closing at a record on Tuesday.

It has rallied nearly 6pc since April as central banks gear up for interest rate cuts, including the Bank of England and the European Central Bank.

On Tuesday, US Federal Reserve chairman Jerome Powell said he did not expect interest rates to be increased again, ahead of inflation figures which are expected to show prices rose at a slightly slower pace in April, down to 3.4pc from 3.5pc.

Mr Powell’s comments helped the Nasdaq Composite to another record close on Tuesday and left the S&P 500 sitting just shy of its own all-time high.

This morning, the FTSE 100 has already pushed to a fresh record high in early trading of 8,474.41.

Read the latest updates below.

The FTSE 100 scaled to a new record high as investors await the next US consumer price index data which could indicate when the Federal Reserve can make its first interest rate cut.

The blue-chip FTSE 100 was up 0.5pc after hitting a record high of 8,474.41 points in opening minutes of trade, while the mid-cap FTSE 250 rose 0.4pc.

Credit data company Experian was the top gainer on the FTSE 100 with a 8.3pc jump after it forecast annual organic revenue growth of between 6pc and 8pc for fiscal year 2025.

Burberry was the biggest loser on the UK’s flagship stock index with a 3.8pc drop after the luxury brand reported a 34pc drop in annual operating profit.

Compass Group fell 2.3pc despite the catering firm first-half profit slightly ahead of market view.

Investors will be waiting for the latest US inflation data this afternoon, which markets already moving higher after Fed chairman Jerome Powell reiterated on Tuesday that the US central bank is unlikely to hike rates.

Tokyo’s Nikkei index closed slightly higher as Sony Group soared after a US media report said it was rethinking its bid for TV and film giant Paramount.

The benchmark Nikkei 225 index gained 0.1pc, or 29.67 points, to end at 38,385.73, while the broader Topix index was flat, losing just 0.07 points to 2,730.88.

During an earnings press conference on Tuesday, Sony Group did not comment on rumours of a joint $26 billion bid for Paramount Global with Apollo Global Management.

But CNBC reported that Sony was “rethinking” its bid for the US owner of CBS, Comedy Central and MTV.

In Tokyo trading, Sony Group jumped 8.2pc to 12,950 yen.

: AP Photo/Eugene Hoshiko

The FTSE 100 has opened higher ahead of data expected to show that US inflation eased slightly in April.

The UK’s blue chip index has gained 0.5pc to 8,471.02 while the midcap FTSE 250 has risen 0.2pc to 20,659.18.

Global stock have risen to a record high amid hopes that the US is on track to start cutting interest rates later this year.

The MSCI All Country World Indexa measure of stock prices around the globerose 0.1pc after closing at a record on Tuesday.

It has rallied nearly 6pc since April as central banks gear up for interest rate cuts, including the Bank of England and the European Central Bank.

On Tuesday, US Federal Reserve chairman Jerome Powell said he did not expect interest rates to be increased again, ahead of inflation figures which are expected to show prices rose at a slightly slower pace in April, down to 3.4pc from 3.5pc.

: REUTERS/Amanda Andrade-Rhoades

Cigarette maker Imperial Brands said higher prices for its tobacco products offset a decline in the number being sold.

The company revealed a slight fall in operating profit in the first half of its financial year, which slipped below £1.5bn.

It said its next generation products, which include vapes, increased net revenue by 16.8pc.

It is delivering the £1.1bn share buyback this year and increasing its interim dividend by 4pc to 44.9p per share.

Chief executive Stefan Bomhard said: 

In tobacco, stronger brands and improved sales execution have enabled us both to consolidate the market share gains in our priority markets achieved in recent years and to deliver a strong price mix of 8.6pc.

Burberry has blamed a year-long global slowdown in demand for luxury goods for a sharp dip in profits, as inflation hit wealthy customers.

Pre-tax profit plummeted 40pc at the fashion brand last year to £383m for the year ending March 30, while underlying earnings were 34pc down year-on-year.

The luxury fashion giant warned that the “challenging” environment would continue over the coming months, and that it had picked out cost saving measures to help it combat the impact of inflation.

 Yanmei Tang, analyst at Third Bridge, said:

Burberry is among the brands that have been affected by a slowdown observed across the wider luxury industry. High-end customers become pickier about what they buy.

Our experts say Burberry is struggling to clearly define and elevate its brand identity, resulting in confusing messaging and poor sales growth. There is too much reliance on a new creative direction rather than making operational changes.

UK computer company Raspberry Pi has confirmed plans to list on the London stock market in a move that could value the firm at a reported £500m.

The Cambridge-based tech outfitknown for credit card-sized computers designed to boost coding skills among childrenhas said it is considering an initial public offering (IPO) on the London Stock Exchange’s main market.

It has hired advisers ahead of a possible float.

If the IPO goes ahead, it would be a boost to London’s flagging stock market, which has been hit by a swathe of UK-listed firms being bought out or ditching Britain for the US.

Eben Upton, founder and chief executive of Raspberry Pi, said: 

Raspberry Pi enthusiasts will see the next phase of our development offer unprecedented opportunities for creativity and innovation.

Our commitment to low-cost computing, a fundamental part of what is special about Raspberry Pi, is unchanged.

In an ever more connected world, the market for Raspberry Pi’s high-performance, low-cost computing platforms continues to expand.

: David Rose

Burberry profits plunged as Chinese consumers turned away from the luxury retail industry at the start of this year.

The British fashion brand warned it expects the first half of its current financial year to “remain challenging” after a drop off in demand.

Sales in its important Asia Pacific region were down 17pc in its financial fourth quarter, while its number of Chinese customers was down 12pc compared to the same period a year earlier.

As many retailers complain about the impact of the tourism tax on the sectorin which overseas shoppers are charged VATBurberry added that tourism accounted for almost a quarter of sales from Chinese customers globally.

In the year to the end of March, its operating profit dropped by 36pc to £418m.

Chief executive Jonathan Akeroyd said: “Executing our plan against a backdrop of slowing luxury demand has been challenging. 

“While our FY24 financial results underperformed our original expectations, we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements. 

“We are using what we have learned over the past year to finetune our approach, while adapting to the external environment.”

Comparable sales in the Americas dropped by 12pc in the first three months of this year versus the same period a year ago, while in China that figure was down 19pc.

Burberry also warned that it expects wholesale revenue to drop by about a quarter in the first half of this year.

Shares in the company have dropped by about 16pc so far in 2024.

: HENRY NICHOLLS/AFP via Getty Images

Thanks for joining me. Burberry has revealed a sharp drop in profits as shoppers from China turned away from the luxury sector.

In the year to the end of March, its operating profit dropped by 36pc to £418m, as the number of shoppers from China dropped by 12pc in the final three months of last year.

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What happened overnight 

Asian stocks were mostly higher after a rally on Wall Street that took the Nasdaq Composite to a record high.

Traders were reassured by comments from Federal Reserve chairman Jerome Powell said policymakers will not likely raise interest rates to respond to stubborn inflation. US consumer prices data is out later.

In Asian trading, Tokyo’s Nikkei 225 index climbed 0.4pc to 38,491.15 and Australia’s S&P/ASX 200 advanced 0.4pc to 7,760.40.

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