London close: Stocks finish higher ahead of Spring Budget

London's stock markets had edged into positive territory by the close on Tuesday, as investors reacted to speculation about the looming Budget, along with the latest services and retail sales figures, and a slew of corporate news announcements.

The FTSE 100 rose 0.08% to close at 7,646.16, while the FTSE 250 saw a slightly larger increase of 0.11%, ending the day at 19,271.03.

In currency markets, sterling was last up 0.17% on the dollar to trade at $1.2713, while it increased 0.13% against the euro, changing hands at €1.1707.

“The mantle of this year's equity rally has been passed to gold and Bitcoin which have both hit record highs on Tuesday,” said IG senior market analyst Axel Rudolph.

“The rally in both the precious metal and cryptocurrency, which kicked off last week when Federal Reserve governor [Christopher] Waller talked of a strategy shift towards reducing the central bank's mortgage-backed securities (MBS) holdings to zero, gathered momentum as investors bought gold and US-listed Bitcoin ETFs.

“The rally in US stock indices is taking a breather, though, with the Nasdaq 100 slipping by around 1.75%.”

Rudolph noted that the National People's Congress set China's growth target for 2024 at 5%, and decided to increase defence spending by 7.2%, the same amount as last year, while leaving a 'peaceful reunification' reference to Taiwan out of its communication, leading to flight-to-safety purchases of gold.

“The Chinese yuan, US dollar and oil price were little changed on the day, though, despite US factory orders and the ISM services PMI falling by more than expected.

“In the eurozone, producer price deflation cooled in January, ahead of Wednesday's UK Budget and Thursday's ECB meeting.”

Budget in focus as growth in UK services slows

Wednesday’s Budget was in focus, with chancellor Jeremy Hunt poised to make changes to national insurance.

Reports earlier suggested he would slash national insurance by a further two percentage points, a move that could save the average worker £450 annually.

In economic headlines, the UK's services sector’s growth slowed in February.

The S&P Global/CIPS services purchasing managers’ index (PMI) declined to 53.8, remaining above the 50.0 mark that indicates expansion, but weaker than January's readings.

Similarly, the composite PMI, measuring both manufacturing and service sectors, fell slightly to 53.0.

“Another solid expansion of business activity across the service sector in February adds to signs that the UK economy has turned a corner after entering a technical recession during the second half of 2023,” said Tim Moore, economics director at S&P Global Market Intelligence.

“New business intakes were a particularly bright spot as service providers reported the fastest order book growth since May 2023.

“Survey respondents cited rising business and consumer spending, linked to improved optimism towards the broader economic outlook.”

Retail sales figures meanwhile painted a mixed picture.

While total sales increased 1.1% year-on-year, that growth was dampened by adverse weather and falls below the 12-month average.

Notably, non-food sales dropped 2.5%, according to the British Retail Consortium-KPMG Retail Sales Monitor for February.

“Not even Valentine’s Day lifted customers out of the gloom, and gifting products that typically sell well, like jewellery and watches, failed to deliver,” said Helen Dickinson, chief executive of the BRC.

“On the sunnier side, rainy weather did brighten sales of toys, as parents looked for ways to occupy their children indoors.”

Elsewhere, the automotive sector saw a significant rebound, with new car registrations surging 14% in February to their highest level since 2004.

The increase was primarily driven by business and fleet sales, according to the Society of Motor Manufacturers and Traders.

“Private car sales are stagnant; they were 18.9% below their average February level in the second half of the 2010s,” said Pantheon Macroeconomics' Rob Wood.

“That's a smaller shortfall than January's 29.8% and the average across 2023, 21.5%, but February is the quietest month of the year for private car sales so we can't read much into this month’s data alone.

“The 12-month average of monthly private registrations remained at 67,000 in February, some 29% below the average in the second half of the 2010s.”

On the continent, the eurozone services sector showed a pickup in activity during February, rising to a seven-month high.

However, overall business activity remains in contraction territory.

Producer-price deflation across the eurozone eased in January, largely due to slowing energy price decreases.

Finally on data, China’s services sector also experienced a slowdown in growth during February, although the Caixin business services activity index remained in expansion territory for the 14th consecutive month.

Spirent skyrockets on takeover deal, Ashtead Group slumps

On London’s equity markets, Intertek Group surged 6.15% after reporting strong 2023 profits and a positive outlook for 2024.

Spirent Communications skyrocketed 63.28% following news of a £1bn takeover by Viavi, and Trustpilot Group saw gains of 8.38% after JP Morgan Cazenove increased its price target on the stock.

Insurer Hiscox rose 5.35% on the back of record annual profits and the announcement of a $150m share buyback.

High-street bakery favourite Greggs added 2.14% after maintaining guidance and reporting strong early 2024 results, rewarding shareholders with a special dividend.

Precious metal miners Fresnillo and Endeavour Mining climbed 3.7% and 4.24% respectively, boosted by record-high gold prices, while Keller Group performed well, up 7.31% on the back of doubled annual earnings and a dividend increase.

On the downside, equipment rental firm Ashtead Group slumped 9.31% after indicating that full-year revenues would be at the low end of guidance.

Car retailer Inchcape fell 8.23% despite positive 2023 results, as its 2024 outlook was more cautious.

Office provider IWG was down 2.6% and building materials supplier Travis Perkins lost 2.6%, with the latter’s plans to exit its French operations contributing to its decline.

Major miners Antofagasta and Rio Tinto slid 3.29% and 1.26%, respectively, as investors reacted to the lack of additional Chinese stimulus measures, with Asia-focused insurer Prudential closing 2.02% lower as well.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,646.16 0.08%
FTSE 250 (MCX) 19,271.03 0.11%
techMARK (TASX) 4,476.83 2.78%

FTSE 100 - Risers

Intertek Group (ITRK) 4,905.00p 6.15%
Endeavour Mining (EDV) 1,426.00p 4.24%
Marks & Spencer Group (MKS) 239.00p 3.82%
Fresnillo (FRES) 493.70p 3.70%
SSE (SSE) 1,658.50p 2.09%
National Grid (NG.) 1,059.50p 1.92%
Centrica (CNA) 127.75p 1.91%
BAE Systems (BA.) 1,280.00p 1.59%
Weir Group (WEIR) 1,880.00p 1.51%
Next (NXT) 8,300.00p 1.42%

FTSE 100 - Fallers

Ashtead Group (AHT) 5,192.00p -9.36%
RS Group (RS1) 726.40p -3.51%
Antofagasta (ANTO) 1,777.50p -3.29%
Hikma Pharmaceuticals (HIK) 1,898.50p -2.69%
Croda International (CRDA) 4,671.00p -2.53%
CRH (CDI) (CRH) 6,486.00p -2.23%
Scottish Mortgage Inv Trust (SMT) 784.20p -2.22%
Rentokil Initial (RTO) 421.00p -2.05%
International Consolidated Airlines Group SA (CDI) (IAG) 141.85p -2.04%
Prudential (PRU) 757.20p -2.02%

FTSE 250 - Risers

Spirent Communications (SPT) 177.00p 63.28%
Trustpilot Group (TRST) 197.80p 8.38%
Keller Group (KLR) 939.00p 7.31%
Hochschild Mining (HOC) 105.40p 5.40%
Hiscox Limited (DI) (HSX) 1,181.00p 5.35%
Centamin (DI) (CEY) 100.80p 5.22%
TP Icap Group (TCAP) 189.90p 4.74%
Plus500 Ltd (DI) (PLUS) 1,806.00p 4.63%
Hipgnosis Songs Fund Limited NPV (SONG) 60.30p 4.15%
Rotork (ROR) 327.80p 3.67%

FTSE 250 - Fallers

Inchcape (INCH) 624.50p -8.23%
Aston Martin Lagonda Global Holdings (AML) 155.00p -6.06%
PureTech Health (PRTC) 188.20p -5.14%
Dr. Martens (DOCS) 90.95p -4.26%
Watches of Switzerland Group (WOSG) 393.20p -4.19%
Oxford Instruments (OXIG) 2,100.00p -4.11%
IntegraFin Holding (IHP) 271.00p -3.01%
Carnival (CCL) 1,122.00p -2.82%
Travis Perkins (TPK) 725.20p -2.71%
Allianz Technology Trust (ATT) 348.00p -2.66%