London close: Stocks end choppy trading day in the green

London stocks closed on a positive note at the end of a volatile trading session on Friday, as investors eyed ongoing discussions concerning the potential of further interest rate hikes from the Federal Reserve.

The FTSE 100 recorded a gain of 0.49% to finish at 7,478.19 points, while the FTSE 250 ended the session up 0.43% at 18,463.19.

Currency markets showed subdued movements, with sterling last down 0.01% on the dollar to trade at $1.2471, while it retreated 0.11% against the euro to change hands at €1.1647.

“Despite regaining some of this week's lost ground on short-covering trades, most global stock indices end the week in negative territory as the odds of further monetary tightening are increasing,” said IG senior market analyst Axel Rudolph.

“Next week's US CPI and the European Central Bank's rate decision are likely to give investors further clues as to the future path of monetary policy.”

UK recruitment declines while German inflation stabilises

In economic news, the UK's recruitment landscape saw a notable decline, with fresh survey results released on Friday morning painting a sombre picture for the employment sector.

As per the Recruitment and Employment Confederation in collaboration with KPMG, there was a marked drop in the hiring of permanent staff through agencies - the steepest such decline in more than three years.

The index detailing permanent staff placements stood at 38.9, a downturn from 42.4 in the prior month, and considerably lower than the 2022 average of 55.3.

Temporary worker recruitment also saw a dip for the first time since July 2020.

The pattern of diminished vacancy growth persisted for the sixth consecutive month, and although the pool of available candidates had grown for half a year straight, its rate had recently decelerated.

Increased candidate availability was put down to layoffs and an overarching hiring reduction.

As competition heightened for prime candidates in tandem with the rising cost of living, employers were said to be offering higher starting salaries and wages, although the inflation rate for those salaries recently dipped to levels not seen since March 2021.

“The economic outlook is keeping businesses cautious,” said KPMG partner Claire Warnes.

“Many employers aren’t ready to commit to permanent roles, and those who are indicate that they cannot find candidates with the right skills, causing these placements to fall at a rapid pace.

“Temporary billings slipped for the first time since July 2020, as squeezed budgets mean there is little room to bring on short-term staff.”

Across the channel, Germany's inflation dynamics provided some stability, as data released earlier confirmed that inflation in August stood firm at 6.1%, mirroring the figure from July.

A distinct element contributing to the steady rate was consistently high food and energy prices.

The harmonised consumer price index (CPI) indicated a 6.4% year-on-year rise, which was in line with initial expectations.

Stripping away the oft-fluctuating food and energy sectors, core inflation maintained its pace at 5.5%.

JD Sports, Next, and Computacenter shine; Petershill Partners faces setback

On London’s equity markets, JD Sports Fashion saw an uptick of 2.76% after Berenberg revised its price target upwards, moving from 210p to 225p.

Berenberg cited the often-underestimated strength of JD Sports' business model, its strategic market positioning, and the expansive international opportunities as reasons behind the optimistic valuation.

Next enjoyed a boost of 1.49%, on the back of Societe Generale's decision to upgrade its recommendation for the retailer from 'hold' to 'buy'.

Computacenter emerged as one of the big winners of the day, rocketing 14.94%.

The sharp rise was backed by the firm's first-half revenues and pre-tax profits, which exceeded market expectations.

Hipgnosis Songs Fund saw a considerable surge of 12.78%, following the announcement that Round Hill Music Royalty Fund had agreed to a buyout deal by Alchemy Copyrights for an estimated $468.8m.

Housebuilder Berkeley Group managed to claw back from earlier losses, ending with a minor rise of 0.05%.

The movements came after the company reaffirmed its full-year earnings guidance.

However, it noted a 35% decrease in private sales reservations, a trend attributed to increasing interest rates and political instability.

Spirax-Sarco Engineering also saw gains of 0.95%, after JPMorgan raised its share target price from 11,300p to 11,500p, reinforcing its 'overweight' stance on the stock.

The banking giant emphasised that the recent decline in the engineering group's share price was not justified.

On the downside, Petershill Partners plummeted 14.48% after the investment firm revised part of its annual guidance downwards.

Melrose Industries ended in the red with a drop of 4.36%, having surged a day earlier on an upbeat annual outlook backed by trading figures that surpassed expectations.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,478.19 0.49%
FTSE 250 (MCX) 18,463.19 0.43%
techMARK (TASX) 4,323.94 1.45%

FTSE 100 - Risers

GSK (GSK) 1,444.20p 4.03%
Entain (ENT) 1,173.00p 3.76%
JD Sports Fashion (JD.) 137.85p 2.68%
Compass Group (CPG) 2,049.00p 2.40%
Hiscox Limited (DI) (HSX) 1,006.00p 2.13%
Beazley (BEZ) 549.00p 1.95%
Pearson (PSON) 881.80p 1.94%
Flutter Entertainment (CDI) (FLTR) 14,205.00p 1.86%
Next (NXT) 7,108.00p 1.66%
Intertek Group (ITRK) 4,205.00p 1.64%

FTSE 100 - Fallers

Melrose Industries (MRO) 510.80p -4.91%
Smurfit Kappa Group (CDI) (SKG) 2,998.00p -3.17%
Convatec Group (CTEC) 224.80p -2.60%
BT Group (BT.A) 112.15p -1.62%
Rolls-Royce Holdings (RR.) 220.20p -1.61%
Smith (DS) (SMDS) 289.90p -1.39%
Mondi (MNDI) 1,291.50p -1.26%
Johnson Matthey (JMAT) 1,750.00p -0.99%
Vodafone Group (VOD) 73.22p -0.95%
Prudential (PRU) 896.60p -0.75%

FTSE 250 - Risers

Hipgnosis Songs Fund Limited NPV (SONG) 92.30p 15.66%
Computacenter (CCC) 2,486.00p 15.31%
Vanquis Banking Group 20 (VANQ) 117.00p 6.95%
Digital 9 Infrastructure NPV (DGI9) 59.10p 6.49%
Synthomer (SYNT) 47.52p 5.60%
Ferrexpo (FXPO) 78.30p 5.53%
Darktrace (DARK) 403.50p 5.24%
Direct Line Insurance Group (DLG) 181.50p 4.40%
Hilton Food Group (HFG) 710.00p 3.35%
Watches of Switzerland Group (WOSG) 604.00p 2.90%

FTSE 250 - Fallers

Petershill Partners (PHLL) 150.00p -14.48%
Babcock International Group (BAB) 383.80p -2.84%
Jupiter Fund Management (JUP) 93.50p -2.76%
North Atlantic Smaller Companies Inv Trust (NAS) 3,460.00p -1.98%
IWG (IWG) 169.20p -1.97%
Molten Ventures (GROW) 241.00p -1.95%
Trainline (TRN) 238.40p -1.89%
Wood Group (John) (WG.) 160.60p -1.84%
Ashmore Group (ASHM) 188.50p -1.82%
Vesuvius (VSVS) 437.00p -1.80%