London close: Prudential, Frasers Group lead stocks higher

London stocks closed on a positive note on Monday, driven by robust performances from Prudential and Frasers Group.

The FTSE 100 rose 0.53%, ending the day at 8,281.55 points, while the FTSE 250 gained 0.59%, reaching 20,562.57 by the close.

In currency markets, sterling was last up 0.31% on the dollar, trading at $1.2684, while it experienced a slight decline of 0.03% against the euro to change hands at €1.1821.

“Just as worries about poor market breadth hit the mainstream, breadth begins to recover,” said IG chief market analyst Chris Beauchamp.

“Last week saw Nvidia soar and the Nasdaq 100 hit 20,000, but the new week has continued where Friday left off, with old economy stocks rallying and tech continuing to drop back.”

Beauchamp said that kind of rotation was “very healthy” for a continuation of the rally into July.

“Fresh inflows are driving the FTSE 100 higher too, and the gains are not confined to the UK.

“Political risk is off the agenda today it seems, as the CAC 40 shrugs off impending French elections and the DAX makes gains too.

“Despite a lack of news today it seems that investors remain content to buy the dip.”

UK manufacturing output stable, first-time mortgage payments rise

In economic news, UK manufacturers reported stable output volumes in the three months leading to June, according to a fresh survey from the Confederation of British Industry (CBI).

The stability followed a rise in output in the previous quarter, marking the first increase in 18 months.

Looking ahead, manufacturers were expecting a modest output increase in the next quarter.

Despite improvements in total order books in May, export orders saw a significant decline, remaining below normal levels.

Manufacturers reported sufficient stocks of finished goods to meet demand, while expectations for selling price inflation rose, with prices projected to increase at an above-average rate in the coming months.

“We’ve seen a stop-start recovery in manufacturing output in recent months, with higher activity over the last quarter concentrated in a relatively small number of manufacturing sub-sectors,” said the CBI’s lead economist, Ben Jones.

“But it’s encouraging to see that manufacturers remain confident the economy is heading in the right direction and our June survey suggests that the recovery should broaden out over the summer.

“One note of caution is that order books remain soft - the sharp deterioration in export order books is particularly striking and is something to keep an eye on in the coming months.”

The survey, which included responses from 248 manufacturers, indicated that only four out of 17 sub-sectors experienced output growth in the three months to June.

Notable growth was observed in the food, drink, and tobacco, motor vehicle and transport, and plastics and furniture sub-sectors.

Total order books, although improved from May, remained below long-run averages, while export orders fell to their lowest since February 2021.

The expectation for average selling price inflation increased significantly in June, suggesting higher prices in the near future.

In the housing market, first-time buyers faced significantly higher mortgage payments, with monthly payments rising by nearly two-thirds since the last general election, according to data from lender Rightmove.

The typical monthly payment for a first-time buyer was now £1,075, up from £667 in 2019, which was attributed to the rise in the average five-year fixed 80% loan-to-value mortgage rate from 2.24% to 5.09%.

In contrast, average wages had risen by only 27% over the same period.

The average price of a typical first home has also increased by 19% to £227,757, with regional variations showing the north west experiencing a 33% rise, while London saw a 6% increase.

In Germany, business sentiment declined in June, as reported by the Ifo Institute.

The business climate index dropped to 88.6 from 89.3 in May, while the current situation index remained steady at 88.3, while the expectations index fell to 89.0 from 90.3.

Prudential and Frasers in the green, SIG falls back

On London’s equity markets, Prudential surged 7.41% following the company's announcement of a $2bn share buyback programme, set to be completed by mid-2026.

Frasers Group rose 3.35% after announcing a multi-year partnership with e-commerce group THG, which itself saw a 1.55% increase.

The collaboration would include integrating Frasers Plus, a customer credit and loyalty proposition, into THG's Ingenuity platform, alongside Frasers acquiring THG's luxury brand portfolio.

Britvic jumped 7.13%, continuing its upward momentum.

The rise came after Carlsberg confirmed that PepsiCo would waive the change of control clause in its bottling arrangements with Britvic.

That removed a potential obstacle for Carlsberg's pursuit of Britvic, following Britvic's rejection of a £3.1bn takeover proposal from Carlsberg last Friday.

On the downside, SIG dropped 5.3% after the insulation and building products group issued a profit warning due to a challenging first half, with ongoing softness in the building and construction sector across Europe leading to subdued demand in most of its markets.

Smurfit Kappa Group fell 2% after a rise last week, when it was confirmed that Smurfit WestRock would be included in the S&P Dow Jones Indices starting 9 July.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,281.55 0.53%
FTSE 250 (MCX) 20,562.57 0.59%
techMARK (TASX) 4,819.15 -0.05%

FTSE 100 - Risers

Prudential (PRU) 759.00p 7.32%
Frasers Group (FRAS) 903.50p 3.85%
Burberry Group (BRBY) 1,018.00p 3.35%
Antofagasta (ANTO) 2,121.00p 3.06%
JD Sports Fashion (JD.) 129.95p 3.05%
BT Group (BT.A) 145.05p 2.44%
WPP (WPP) 765.20p 2.35%
Associated British Foods (ABF) 2,519.00p 2.07%
IMI (IMI) 1,820.00p 1.90%
British American Tobacco (BATS) 2,535.00p 1.89%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 14,600.00p -3.09%
Berkeley Group Holdings (The) (BKG) 4,668.00p -2.07%
Sage Group (SGE) 1,066.50p -1.34%
National Grid (NG.) 888.80p -1.11%
Smurfit Kappa Group (CDI) (SKG) 3,620.00p -1.04%
Auto Trader Group (AUTO) 809.80p -0.91%
Smith & Nephew (SN.) 996.20p -0.88%
Sainsbury (J) (SBRY) 260.20p -0.84%
B&M European Value Retail S.A. (DI) (BME) 465.20p -0.81%
3i Group (III) 3,128.00p -0.70%

FTSE 250 - Risers

Britvic (BVIC) 1,172.00p 7.13%
Victrex plc (VCT) 1,214.00p 5.17%
Watches of Switzerland Group (WOSG) 410.20p 4.59%
Bank of Georgia Group (BGEO) 4,080.00p 4.48%
Ithaca Energy (ITH) 131.20p 3.96%
PZ Cussons (PZC) 104.60p 3.77%
Johnson Matthey (JMAT) 1,618.00p 3.51%
Pets at Home Group (PETS) 311.00p 3.32%
Elementis (ELM) 148.60p 3.19%
4Imprint Group (FOUR) 6,140.00p 3.18%

FTSE 250 - Fallers

Foresight Group Holdings Limited NPV (FSG) 467.00p -6.22%
PureTech Health (PRTC) 198.40p -5.07%
Allianz Technology Trust (ATT) 388.50p -3.24%
Polar Capital Technology Trust (PCT) 3,305.00p -2.79%
Moonpig Group (MOON) 155.40p -2.75%
Ninety One (N91) 169.70p -2.64%
Renewi (RWI) 677.00p -2.59%
Alpha Group International (ALPH) 2,420.00p -2.42%
Keller Group (KLR) 1,250.00p -2.34%
Mitchells & Butlers (MAB) 295.00p -2.33%