London close: Stocks finish choppy session in the red

London’s stock markets presented a downbeat picture at the close of Wednesday’s trading session.

Investor sentiment swayed between gains and losses throughout the day, with concerns over prolonged higher interest rates influencing market mood.

The FTSE 100 slipped 0.43%, concluding the day at 7,593.22 points, while the FTSE 250 lost 0.63% to 18,220.23.

Foreign exchange markets were in a mixed state, with sterling last down 0.06% on the dollar, trading at $1.2151, while it managed a 0.19% increase against the euro to change hands at €1.1521.

“US lawmakers seem to be on course to avoid a government shutdown, but solid durable goods orders in the US have spooked investors,” said IG chief market analyst Chris Beauchamp.

“Good data is very much ‘bad news’ for stocks right now, as it means there is no pressure on the Fed or other central banks to think about loosening policy.

“September’s current swoon has been driven by the realisation that high rates are going to be a feature well into 2024, absent a recession which, as yet, refuses to appear on the horizon.”

German consumer confidence dips; US durable goods orders show promise

In economic news, German consumer confidence took a hit, reflecting concerns stemming from heightened interest rates.

Market research firm GfK's recent findings showed a sharper-than-anticipated decline in consumer confidence for October, dropping to -26.5 from September's revised -25.6.

Market analysts had projected a minor drop to -26.

The shift towards caution, GfK suggested, was driven by an increased inclination towards saving, which spiked by 0.5 points to eight - a zenith not seen since April 2011.

That came in the wake of the European Central Bank's recent decision to hike interest rates to a record 4.5%, a measure taken in response to the persistent 5.2% inflation rate reported in the eurozone in August.

Despite the drop in the headline consumer confidence index, GfK highlighted some silver linings, noting that sub-indices related to economic prospects, income predictions, and purchasing inclinations saw marginal upticks.

GfK's consumer expert Rolf Bürkl said Wednesday's data showed that “the chances of a recovery in consumer sentiment this year have probably fallen to zero”.

“The reasons for this are a persistently high inflation rate due to sharply rising food and energy prices,” he said.

“Private consumption will, therefore, not positively contribute to overall economic development this year.”

Across the Atlantic, the US economic scenario painted a somewhat brighter picture in the durable goods sector.

Contrary to economists' forecasts for a 0.5% reduction, the Department of Commerce announced a 0.2% monthly increment in durable goods orders, settling at $284.7bn when adjusted for seasonality.

Orders, when transportation was excluded, climbed by 0.4%.

Additionally, orders for electrical equipment and appliances experienced a 1.1% growth, while those for fabricated metal products and machinery surged by 0.5%.

Motor vehicles and parts saw a 0.3% increment.

Crucially, orders for core capital goods meant to last beyond three years, excluding defence and aircraft-related orders, saw a notable 0.9% increase from the prior month.

“Despite the improvement to underlying capital goods shipments, which feed directly into the BEA’s estimates, business equipment investment still looks set to slow sharply from the 7.7% annualised gain in the second quarter,” said Olivia Cross at Capital Economics.

“Moreover, headwinds to the sector are likely to grow over the rest of the year as tighter credit conditions weigh more heavily on investment and economic growth weakens.”

Commercial property firms in the red, Ithaca jumps on Rosebank decision

British Gas owner Centrica fell 4.91% on the back of a double blow for the firm - a rating downgrade at Morgan Stanley and a recommendation to 'sell' by Liberum.

Land Securities Group also faced headwinds, dropping 3.77% despite an uptick in lettings during the first five months of the financial year.

The property developer reported sustained demand for office space, an impressive feat in the face of escalating interest rates.

Property stocks in general faced a challenging day, with British Land, Derwent London, and Great Portland Estates declining by 2.65%, 2.88%, and 4.91%, respectively.

All three companies grappled with rating downgrades at Jefferies.

On the upside, IMI emerged as a frontrunner with a 4.74% surge, following JPMorgan's research note on the European capital goods sector, where it touted IMI as one of the must-have stocks for the remainder of the year.

Meanwhile, Ithaca Energy rode a wave of good news, jumping 8.46% after the UK oil and gas regulator approved the Rosebank oil and gas field development in the North Sea, where Ithaca holds a 20% working interest.

Finally, the aviation sector saw a bit of a lift as Wizz Air Holdings rose 1.24% in the wake of an upgraded recommendation from Liberum, which changed its stance to 'hold' from its previous 'sell' rating.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,593.22 -0.43%
FTSE 250 (MCX) 18,220.23 -0.63%
techMARK (TASX) 4,326.27 -0.34%

FTSE 100 - Risers

IMI (IMI) 1,575.00p 5.14%
BP (BP.) 538.50p 1.43%
Shell (SHEL) 2,629.50p 1.15%
Hikma Pharmaceuticals (HIK) 2,093.00p 0.63%
Halma (HLMA) 1,916.00p 0.60%
Spirax-Sarco Engineering (SPX) 9,296.00p 0.58%
Prudential (PRU) 890.00p 0.45%
Marks & Spencer Group (MKS) 236.90p 0.42%
International Consolidated Airlines Group SA (CDI) (IAG) 148.65p 0.41%
Glencore (GLEN) 453.55p 0.40%

FTSE 100 - Fallers

Ocado Group (OCDO) 615.00p -9.77%
Centrica (CNA) 157.75p -5.06%
Land Securities Group (LAND) 579.20p -4.30%
Sainsbury (J) (SBRY) 252.60p -3.48%
Unite Group (UTG) 891.00p -3.15%
RS Group (RS1) 725.40p -3.15%
Smith & Nephew (SN.) 1,008.50p -3.12%
CRH (CDI) (CRH) 4,494.00p -2.77%
Croda International (CRDA) 4,691.00p -2.66%
SSE (SSE) 1,618.50p -2.47%

FTSE 250 - Risers

Ithaca Energy (ITH) 177.60p 8.82%
Close Brothers Group (CBG) 892.50p 6.69%
Harbour Energy (HBR) 263.60p 4.31%
Ceres Power Holdings (CWR) 329.40p 3.39%
Vesuvius (VSVS) 430.00p 3.02%
Future (FUTR) 732.50p 2.88%
TUI AG Reg Shs (DI) (TUI) 449.20p 2.84%
Babcock International Group (BAB) 388.40p 2.75%
Ferrexpo (FXPO) 78.15p 2.63%
NCC Group (NCC) 103.00p 2.59%

FTSE 250 - Fallers

Syncona Limited NPV (SYNC) 106.60p -4.99%
Great Portland Estates (GPE) 410.40p -4.96%
Coats Group (COA) 70.60p -4.47%
Big Yellow Group (BYG) 939.00p -4.13%
British Land Company (BLND) 315.80p -3.37%
Derwent London (DLN) 1,845.00p -3.35%
Safestore Holdings (SAFE) 735.50p -3.16%
Quilter (QLT) 85.25p -3.13%
Pennon Group (PNN) 592.50p -3.11%
IP Group (IPO) 54.30p -3.04%