Thursday Sep 14 2023 13:53
5 min
On Thursday, the FTSE 100 in the UK saw an increase following the release of U.S. inflation data, which strengthened expectations that the Federal Reserve would maintain stable interest rates in the upcoming week. Additionally, Trainline, a rail ticketing company, experienced a notable surge in its stock price after reporting higher ticket sales for the first half of the fiscal year.
The FTSE 100, which is heavily influenced by exporters, advanced by 1% as of 11:30 a.m. BST, hovering above the 7,600 mark, according to Marketwatch data.
Data from Wednesday indicated that the annual increase in underlying U.S. inflation was the smallest it had been in nearly two years, despite consumer prices registering their most significant rise in 14 months during August.
Investor attention will now shift to Europe, where the European Central Bank (ECB) will decide on Thursday whether to elevate its key lending rate to a record high in its final move against inflation or opt for a pause as economic conditions deteriorate.
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The FTSE 100’s top stock performers were Rio Tinto (RIO) and Anglo American (AGLJ), which saw their stock prices increase by 3.0% each after J.P. Morgan raised the price targets for both mining companies.
The broader industrial metal miners sector climbed by 2.3%, further bolstering the benchmark index and leading sectoral gains.
In the broader FTSE 250 index, the firm that saw the largest increase was Trainline, whose shares surged by 11.2% following the company's announcement of increased ticket sales for the first half of the 2024 fiscal year and a share buyback program worth up to £50 million ($62.4 million).
During the period from February 1 to August 31, the online rail ticket retailer experienced a substantial 23% year-on-year increase in total net ticket sales, reaching £2.65 billion. This growth drove revenue up by 19% to £197 million.
Conversely, shares of real estate firm Unite Group, product testing company Intertek Group, and aerospace supplier Melrose declined between 1.3% to 1.8%, as they traded ex-dividend.
The FTSE 100’s top performers as of Thursday, September 14, were mining giants Rio Tinto and Anglo American, both of which were upgraded by U.S. bank J.P. Morgan.
A TipRanks consensus forecast for Rio Tinto, based on 13 Wall Street analysts offering one-year price targets for the firm in the last 3 months, had an average price target of 4,916.93p with a high forecast of 7,400.00p and a low forecast of 64.00p. The average Rio Tinto stock price forecast represented a -5.61% change from the last price of 5,209.00p — although multiple analysts cited in the forecast are yet to be update their projections.
A week earlier, Argus assigned Rio Tinto a "Buy" rating along with a price target of $72, classifying the stock as a "value opportunity." The analyst found the company's current yield of approximately 6.3% appealing, indicating its potential value proposition. Additionally, the stock's current price-to-earnings ratio of 8 times was deemed low, despite the company's consistent history of outperforming the industry. This suggests that the stock should command a higher valuation, according to the analyst's research note to investors.
As for the Anglo American stock price forecast, TipRanks cited an average price target of 2,763.59p (high forecast of 3,364.50p, low forecast of 2,496.24p), which indicated a potential 25.30% change from the last price of 2,205.50p.
Contrary to J.P. Morgan’s take, Barclays analyst Ian Rossouw lowered the firm’s price target on Anglo American to 2,900p from 3,000p on September 12. Barclays maintains an Overweight rating on the shares.
According to a broader FTSE 100 forecast outlined by economic data aggregator TradingEconomics, the index could show a potential reading of 7327.88 points by the end of this quarter, indicating a bearish trajectory. Looking forward, the platform saw the UK’s top market index dropping to trade at 6894.89 in 12 months' time.
When considering shares and indices for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
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