London close: Stocks finish below the line ahead of big week

London markets closed almost unchanged on Monday, with stocks finishing just below the waterline.

Investors were adopting a cautious stance ahead of a series of key earnings reports from UK blue-chip companies and US tech giants later in the week.

The FTSE 100 ended the day 0.02% lower at 7,912.20 points, while the FTSE 250 dropped 0.22% to 19,226.94 points.

Sterling meanwhile had mixed fortunes on the day, last rising 0.27% on the dollar to trade at $1.2465, while it declined 0.2% against the euro to change hands at €1.1299.

“Monday’s session seems to provide the template for most of the week - tentative gains that then slip away,” said IG chief market analyst Chris Beauchamp.

“With such an action-packed week investors are best described as ‘skittish’, fretting that data will prompt a reversal in markets but at the same time hoping for just enough good news to give stocks a reason to move out of their recent narrow range.”

House prices show signs of slower growth in April

In economic news, UK house prices showed signs of slowing growth in April according to Rightmove's latest house price index.

The index showed that average asking prices increased by just 0.2% on a monthly basis to £366,247, which was lower than the average 1.2% growth seen at the time of year, and a significant drop from the 0.8% increase in March.

Rightmove noted that the slowdown could be due to economic headwinds and the transition of the housing market to a slower pace, similar to pre-pandemic market activity in 2019.

However, first-time buyers saw an increase in the average asking price of 0.2% in April and a 2% rise on a year-over-year basis, with a record high of £224,963.

“Agents are reporting that many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt Spring buyers with a competitive price,” said Tim Bannister, Rightmove’s director of property science.

“The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace.

“Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choice available.”

In Germany, the Ifo Institute reported a slight improvement in business sentiment in April, with its business climate index rising to 93.6 from 93.2 in March, although that was weaker than the expected 94.0.

The expectations index increased to 92.2 in April from 91.0 the previous month, while the current situation index fell to 95.0 from 95.4.

The manufacturing index rose to 6.7 in April from 6.5 in March, but the service sector gauge fell to 6.8 from 8.8.

The trade gauge deteriorated to -10.7 from -10.1, and the construction sector gauge came in at -17.6 compared to -17.5.

“German business’s worries are abating, but the economy is still lacking dynamism,” said Ifo Institute president Clemens Fuest.

Asos slides on short-seller position, retailers and travel stocks jump

On London’s equity markets, online fashion retailer Asos was down 4.49%, after reports that ShadowFall had built a £4m short position in the company.

Precious metals miner Fresnillo was down by 1.6%, and Anglo American retreated by 1.59%, as iron prices fell.

Standard Chartered was also weaker, down by 0.97%, ahead of the release of its first-quarter results this week.

On the upside, retailers JD Sports, Burberry, and Next saw gains, rising by 1.42%, 0.96%, and 1.15%, respectively.

Dowlais Group, which was recently demerged from Melrose, was among the standout gainers on the FTSE 100, up by 5.76%.

Homeware retailer Dunelm was also lifted by an upgrade at Stifel, rising by 1.49%.

Travel stocks were boosted by positive news, with Wizz Air Holdings up 3.02% following a rating upgrade by Citi.

Trainline was meanwhile ahead 5.58% and National Express Group saw gains of 3.3% amid the boosted sentiment around the travel sector.

Reporting by Josh White for Sharecast.com.