London close: FTSE lags global peers after lacklustre afternoon

London stocks were in a mixed state by the close on Monday, with the top-flight index dipping below the waterline in afternoon trading as miners remained under pressure.

The FTSE 100 ended the session down 0.02% at 7,464.37, while the FTSE 250 was 1.31% firmer at 21,926.62.

Sterling was also moving in different directions, last trading 0.27% stronger on the dollar at $1.3427, while losing 0.3% against the euro to change hands at €1.1981.

“It certainly does look like a return to normality after January’s volatility,” said IG chief market analyst Chris Beauchamp.

“Tech stocks are leading the way, followed by the DAX, while the FTSE 100 is once again one of the weaker performers.

“While we have got quite a bit of ground to make up, the drop in markets since the beginning of the year has once again cleared out much of the speculative froth across markets, driving down valuations to a level more comfortable for dip buyers.”

There wasn’t much in the way of economic data points in the UK on Monday, but a fresh reading from across the pond showed economic activity in the Chicago area picking up in January.

The MNI Chicago business barometer rose to 65.2 from a revised 64.3 in December, coming in ahead of expectations for a reading of 61.7, while the previous month’s level was revised up from 63.1.

Among the main five indicators, order backlogs, employment and supplier deliveries all increased, while production and orders fell across the month.

“This is a better result than we expected, so we’re raising our forecast for tomorrow’s national ISM manufacturing index by a point to 57, down from 58.8 in December,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“The first January survey to be released- the Empire State report - appeared to point to a rollover in manufacturing activity, but other regional surveys have been less weak, and the Chicago numbers move the needle up a bit further.”

China’s manufacturing sector, meanwhile, stalled in January according to data released earlier, hit by a resurgence in Covid-19 cases and the re-introduction of stringent lockdown measures.

According to the National Bureau of Statistics, the official manufacturing purchasing manager’s index (PMI) for January was 50.1, down on December’s 50.3 although it was marginally ahead of consensus, for 50.0.

“From December to January, the resurgence of Covid-19 in several regions forced local governments to tighten epidemic control measures, which restricted production, transportation and sales of manufactured goods,” said Wang Zhe, senior economist at Caixin Insight Group.

“It became more evident that China’s economy is straining under the triple pressures of contracting demand, supply shocks and weakening expectations.”

Closer to home, official data showed economic growth across the eurozone slowing at the end of 2021, as the Covid Omicron variant hindered the recovery from the pandemic.

GDP across the single currency area rose by 0.3% in the October-December quarter, a marked slowdown from the 2.3% expansion recorded in the preceding three months.

Germany recorded a 0.7% contraction, acting as an anchor, as renewed restrictions were imposed in some European countries, as Omicron cases surged – hitting the service sector.

Analysts at Pantheon Macroeconomics said the overall figure was in line with expectations and the recovery was “unlikely to gain steam at the start of this year”.

“While this advance report does not contain details, we are confident that domestic demand drove the increase in GDP last quarter.

“Net trade probably boosted growth too, but by less than domestic demand,” they said.

In London’s equity markets, Vodafone Group managed gains of 1.88% after reports the telecoms company was being targeted by the activist investor Cevian, putting management under pressure to revamp its struggling performance.

The Sweden-based investment firm had reportedly built up holdings in the communications giant in recent months, whose share price had almost halved in value since 2018.

Educational publisher Pearson rose 1.48% after saying it had bought the remaining 80% of skills verification operator Credly it did not already own, for an undisclosed sum.

Barratt Developments was 0.99% higher after announcing the acquisition of Gladman Developments in a £250m deal.

Airtel Africa jumped 5.9% by the end of the day, after being promoted to the FTSE 100 at the end of last week, replacing mining company BHP.

XP Power surged 8.36% after announcing the acquisition of German firms FuG Elektronik and Guth High Voltage from Dr Simon Consulting for €39m (£32.8m) in cash.

The deal was funded using existing debt facilities and remained subject to customary post-completion working capital adjustments.

Manufacturing company Morgan Advanced Materials was also a high riser, gaining 5.61% by end-of-play.

On the downside, miners were among the worst performers as copper prices fell, with Rio Tinto down 3.73%, Anglo American losing 2.81%, and Glencore 2.61% weaker.

BT Group was off 0.74% after it emerged that rival Virgin Media O2 was looking to expand its fibre network through a joint venture.

Supermarkets were in the red, with J Sainsbury down 2.81% and Tesco on the back foot by 2.11%.

Cybersecurity firm NCC Group was also a big loser, falling 5.24%, closely followed on the FTSE 250 by gambling software maker Playtech, which was 4.96% weaker.

Market Movers

FTSE 100 (UKX) 7,464.37 -0.02%
FTSE 250 (MCX) 21,926.62 1.31%
techMARK (TASX) 4,429.38 0.66%

FTSE 100 - Risers

Airtel Africa (AAF) 152.50p 5.90%
Scottish Mortgage Inv Trust (SMT) 1,079.00p 4.96%
Ocado Group (OCDO) 1,504.00p 4.30%
Pershing Square Holdings Ltd NPV (PSH) 2,770.00p 3.94%
Spirax-Sarco Engineering (SPX) 13,255.00p 3.64%
London Stock Exchange Group (LSEG) 7,220.00p 3.47%
3i Group (III) 1,369.50p 3.24%
Rightmove (RMV) 649.80p 2.82%
InterContinental Hotels Group (IHG) 4,861.00p 2.81%
St James's Place (STJ) 1,518.00p 2.81%

FTSE 100 - Fallers

Rio Tinto (RIO) 5,185.00p -3.73%
Anglo American (AAL) 3,219.00p -2.81%
Sainsbury (J) (SBRY) 290.70p -2.81%
Glencore (GLEN) 383.00p -2.61%
BAE Systems (BA.) 577.20p -2.53%
Tesco (TSCO) 297.00p -2.11%
AstraZeneca (AZN) 8,617.00p -1.71%
National Grid (NG.) 1,079.00p -1.14%
Fresnillo (FRES) 624.80p -1.11%
GlaxoSmithKline (GSK) 1,643.00p -1.08%

FTSE 250 - Risers

XP Power Ltd. (DI) (XPP) 4,900.00p 8.36%
Baillie Gifford US Growth Trust (USA) 234.00p 8.08%
Oxford Instruments (OXIG) 2,190.00p 5.87%
Trainline (TRN) 224.00p 5.76%
Morgan Advanced Materials (MGAM) 320.00p 5.61%
Allianz Technology Trust (ATT) 286.00p 5.54%
Syncona Limited NPV (SYNC) 190.00p 5.44%
Spire Healthcare Group (SPI) 237.50p 5.32%
Moonpig Group (MOON) 312.20p 4.69%
Bridgepoint Group (Reg S) (BPT) 381.50p 4.66%

FTSE 250 - Fallers

Hipgnosis Songs Fund Limited C Shs NPV (SONC) 112.50p -100.00%
NCC Group (NCC) 189.80p -5.24%
Playtech (PTEC) 582.50p -4.96%
Wood Group (John) (WG.) 222.40p -3.81%
Tate & Lyle (TATE) 706.40p -2.86%
Energean (ENOG) 943.50p -2.83%
Wizz Air Holdings (WIZZ) 4,036.00p -2.77%
QinetiQ Group (QQ.) 267.80p -2.76%
Synthomer (SYNT) 364.60p -2.36%
Babcock International Group (BAB) 301.90p -2.14%