The FTSE 100 eased slightly on Tuesday as a strong session in the US failed to inspire a meaningful rally in European shares.

London’s leading index was finely poised for most of the session with weakness in Beazley, RS Group and Intermediate Capital offset by a recovery in commodity stocks.

As the session progressed, early gains turned to losses and the FTSE 100 was trading down 0.15% at 7,683 at the time of writing.

“The FTSE 100 benefitted from a small waft of the feelgood factor emanating from Wall Street in early trade, as investors hopes remain high that inflation will keep heading in the right direction,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The speculation has fuelled the value of tech stocks once again, with Nvidia given another boost, sending it to an all-time high. Investors cheered as the chip maker revealed new desktop graphics processors, aimed at the video game market, which will be capable of exploiting AI innovations.”

However, the benefits of a stronger session in the US faded through the session as investors looked forward to key inflation for further direction in markets.

“European markets didn’t share the excitement as all of the major indices were either flat or down on Tuesday morning, suggesting investors are in a holding pattern until we get the next round of inflation and jobs figures which provide the all-important clues as to central bank interest rate decisions,” said Russ Mould, investment director at AJ Bell.

US inflation data is due to be released on Thursday with economists predicting US core CPI inflation will tick marginally higher year-on-year while CPI is forecast to drop to 0.1% month-on-month.

Should these forecasts be met, it would fuel the view the US economy is heading for a soft landing. This would be supportive of equities.

The first full trading week is set to be a cracker for London’s largest companies as a raft of economic data accompanies a flurry of corporate updates.

Ahead of Marks & Spencer, Tesco and Sainsbury’s reporting later this week, B&M European Value said group revenue grew 5.0% year-on-year to £1,645m in the key Q3 festive trading period on Tuesday.

B&M shares were 0.6% higher at the time of writing.

Premier African Minerals shares revisited 52-week closing lows on Tuesday after the group issued an update on its Zulu lithium operations in Zimbabwe.

The company released assay data from trench and drill hole surveys which revealed the presence of potentially economically viable mineralisations, but nothing that alters the current investment case materially.

Premier African Minerals shares were trading down 8.5% to 0.215p at the time of writing.

Although Premier released a raft of assay data, investors will be more concerned about the progress of existing mining operations at Zulu and the progress of installing a new mill.

The company is subject to production targets and penalties should these targets not be met. The first of these targets has been missed and meeting future targets is reliant on the successful installation of a new mill, and the production of lithium at the required 6% grade.

Premier has recently said the mine can produce lithium at the required grade, but substantial uncertainties remain around when the plant will be up and running to process ore.

Today’s announcement did little to address these concerns and the drop in the share price can be attributed to uncertainty around mining facilities and how much more Premier African Minerals shareholders will be diluted by funding rounds before production ramps up.

The Premier African Minerals CEO, George Roach, provided a longer than usual comment on the current state of affairs at the Zulu project and when the company expects the mine to start generating revenues:

“Those surface trench and drill hole results originating from the Southeast pegmatite, represent very good potential for this pegmatite that is adjacent but discrete from the main mining and pit developments underway at present. More important is that geological logging indicates that the lithium mineralisation in this pegmatite is almost exclusively spodumene. For reference purposes, a grade of 1% Li2O when the mineralisation is all spodumene, is the equivalent of 12.5% of the ore body being made up of the mineral spodumene. Test work in our laboratory at Zulu has consistently confirmed that Zulu is able to produce SC6 at acceptable grades from a contained spodumene content in the ore body as low as 4%, representing a potential economic cut-off grade as low as 0.37% Li2O when the contained mineral is spodumene.

By way of general update, civils associated with the thickener and new mill installation are substantially complete and first materials are now at site with further loads on route. The new mill is expected to be the last component to be positioned at Zulu late in January 2024 with anticipated restart of operations as early in February as possible and the Board believes as previously reported that the Company is still on track to target revenue generating production by late-February 2024.

“Mining operations are now well developed, and we anticipate no issues associated with ore delivery to Run of Mine pad in future. Whilst mining operations are a major cash cost at present, the future benefit when operations are underway at much reduced stripping ratios will more than offset this cost in the future.

“Preliminary indications from the Company’s internal budget (which has not been independently verified) at this time model an average mine gate cost of the order of $800 per ton for SC6 for the first 12 months, and which discounts any technical grade spodumene produced and sold and any sale of any lepidolite and other mica-rich concentrates or future tantalum production.”

If these costs are achieved, the mine will operate profitably. However, the question is whether these cost forecasts will be met and how much more cash Premier needs to get there.

One may argue Games Workshop’s lofty valuation has been justified by the news of the British miniature wargames manufacturer’s record profit and dividend in the last six months.

The manufacturer announced raising the dividend to 120 pence per share, bringing the total dividends declared in 2023–24 to £3.15 per share. Comparatively, in 2022–23, it was £2.95 per share.

Furthermore, the company’s pre-tax profits soared to £95.2 million in the last six months.

Earnings per share (EPS) have also seen an uptick, rising from 202.4p to 216.9p. In a show of confidence, the dividend has been raised to 195p from the previous 165p for this period.

The Games Workshop’s shares were down 1% at the time of writing on Tuesday, but have been recovering all morning. The company’s shares are 205% higher over the past five years.

“2023 could mark another significant turning point for Games Workshop,” said Mark Crouch, analyst at eToro, “as the fantasy miniatures maker has finalised an agreement with Amazon granting exclusive rights to films and television series set within the Warhammer 40,000 universe.”

“And while there are some further details to be agreed upon, this could be the key to unlocking yet more growth in a company whose share price has risen twentyfold in the last seven years but has recently been unable to breach the highs of late 2022,” he added.

“The company does have an above-average PE, but many will argue that IPs like this really have no bounds, and for now at least North America, Europe, and the UK make up the majority of the company’s stores and coverage, so Games Workshop will now aim to expand to the rest of the world, which is, as the company themselves put it, “green field territory”,” further said Crouch.

Tekcapital shares jumped on Tuesday after the technology-focused investment company announced MicroSalt has introduced its low-sodium shakers on the Amazon UK platform.

Tekcapital shares were 5.8% higher at the time of writing.

In addition, and in support of its UK expansion, MicroSalt has forged a strategic local distribution partnership with Reliable Express in Southampton.

The agreement provides the storage and distribution of MicroSalt’s bulk-packed products, catering to the growing B2B market demand within the food distribution and manufacturing sectors in both the UK and EU markets.

MicroSalt is supplying some of the world’s largest snack foods businesses with large quantities of low-sodium salt requiring substantial storage and distribution capabilities.

In their admission document released last year, MicroSalt described demand from a large multinational for their Latin American businesses in the form of a 9.5mt order. Today’s announcement suggests MicroSalt is gearing up for large orders from European businesses.

“Inclusion of our low sodium solutions on the Amazon shopping platform is key to our efforts to make MicroSalt readily available to meet the demand of our B2C customers,” said Rick Guiney, CEO of MicroSalt®.

“Additionally, our partnership with Reliable Express in the UK is a vital piece of our growing distribution network as it will allow us to reliably and efficiently service food manufacturing channels in both the UK and EU. Excess sodium consumption is one of the leading contributors to hypertension and heart disease. Now MicroSalt will be available to help consumers in the UK and Europe enjoy great tasting, healthy products with less sodium.”

The FTSE 100 was weaker on Monday as miners and oil majors dragged on the index after Saudi Arabia cut its oil prices and enthusiasm around interest rate cuts began to ebb.

Global equities had a stellar end to 2023 on hopes central banks would start to cut rates early in the new year. However, since then, economic data points and central bank comments suggest the first cuts won’t come as soon as some market participants hope.

Indeed, market pricing of rate cuts has reversed slightly since the turn of the year, which continued in equities and fixed income on Monday. London’s leading index had been sharply lower earlier in the session, but dip buyers stepped in to provide support as trade progressed.

The FTSE 100 was down 0.15% at the time of writing.

“The FTSE 100 dipped on Monday as weak commodity prices hit the big resources stocks which populate the index,” said AJ Bell investment director Russ Mould.

“In general, the momentum which stocks built up in the latter part of 2023 seems to have been lost for now as some of the excitement over interest rates has dissipated and doubt has crept in about a soft landing for the economy.

“US inflation figures scheduled for Thursday could either help get markets out of their mild New Year funk or put shares under renewed pressure, so this release will be closely monitored. Disruption to shipping routes in the Red Sea are hinting at renewed inflationary pressures coming down the pipe.”

FTSE 100 movers

The FTSE 100’s commodity companies were the main detractors of the index’s performance with Glencore, BP, Shell and Anglo American down between 1.3% – 2.4%.

However, after last week’s shock profit warning, JD Sports was the top faller as the sell-off continued. JD Sports shares are now worth 29.9% less than they were at the end of 2023 and are by far the FTSE 100’s worst performer so far in 2024.

Melrose was the top gainer amid fluctuations in the aerospace caused by Boeing’s malfunction over the weekend. Those in Boeing’s supply chain are suffering while competitor supply chains are benefiting.