London close: Stocks finish lower on global stability concerns

London stocks ended on a downbeat note on Friday after a hotter-than-expected US inflation print overnight, and escalating oil and gas prices fuelled anxiety across the board.

The FTSE 100 closed down 0.59% at 7,599.60, and the FTSE 250 was 2.14% weaker, settling at 17,454.22 points.

In equities, sterling was last down 0.34% on the dollar, trading at $1.2134, while it dipped 0.06% against the euro to change hands at €1.1556.

“With the weekend approaching and the events of the last few days very much front of mind, European equity markets have slipped back at the end of a week that has seen stock markets prove to be remarkably resilient, despite surging oil prices and concern over a possible Israeli incursion into Gaza,” said CMC Markets chief market analyst Michael Hewson.

“Nonetheless, while stock markets haven’t lost much ground this week, investors appear to be adopting a safety-first approach ahead of the weekend over concerns we could see the current ongoing build-up of tensions flare up into an escalation that involves Hezbollah or Iran if Israel follows through on its threat to enter Gaza.

“With that in mind, the energy sector is helping to limit the downside on the FTSE 100 with BP and Shell leading the gainers, while a sharp rise in the gold price has helped to push gold miners Endeavour Mining and Fresnillo higher as well.”

BoE governor speaks of cautious optimism; China on brink of deflation

In economic news, Bank of England governor Andrew Bailey exuded cautious optimism on interest rates on Friday at an event hosted by the Institute of International Finance in Marrakech, coinciding with the International Monetary Fund and World Bank meetings.

Bailey recognised “solid progress” on inflation in recent months, as higher interest rates appeared to quell demand and inflation chilling to an 18-month nadir of 6.7%.

Still, with inflation still towering above its 2% target, and after a halt at 5.25% in the cost of borrowing after 14 sequential hikes in September, Bailey emphasised the imperativeness of maintaining a prudent approach.

“Our last meeting was such a tight one,” the governor said.

“As my colleague, [BoE chief economist] Huw Pill said this week, they’re going to go on being tight ones.”

The Monetary Policy Committee is next due to meet on 2 November, with most economists forecasting no change.

Elsewhere, China found itself teetering on the edge of deflation as data from the National Bureau of Statistics showed a stagnation in inflation in September, subverting most analysts’ expectations for a modest 0.2% rise.

The headline consumer price index (CPI) recorded a minuscule softening, easing from 0.1% in August to a flat 0.0% year-on-year last month.

Core inflation maintained stability at 0.8%, sidelining the oscillations of food and energy prices, while a conspicuous 0.9% decline was seen in goods prices.

A stark 3.2% downturn in food prices, exacerbated by a pronounced 22% plunge in the cost of pork, exerted notable downward pressure.

Furthermore, September’s producer price index recorded a 2.5% regression, marginally surpassing the anticipated 2.4% decline.

“The divergence between goods and services inflation reflects the tepid, uneven consumer recovery, favouring services over big-ticket goods,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics.

“China’s consumer rebound is likely to pick up only gradually, as household incomes took a hit during the pandemic and people are worried about the shaky jobs market.

“Policy makers are unlikely to shift their approach of deploying meaningful stimulus through infrastructure and manufacturing investment, rather than via big consumption handouts.”

St James’s Place plunges, oil giants rise alongside prices

On London’s equity markets, St James’s Place plummeted 18.51% following an announcement that the wealth management firm was scrutinising its fees and charges structure.

This decision came after a report by the Financial Times indicating that regulatory pressures could be steering the company’s decision-making process.

Hargreaves Lansdown also found itself on the descent, closing down 3.82%.

British American Tobacco was off 3.51% after the US Food and Drug Administration decided to restrict the sale of six flavours of its chief vape brand, Vuse Alto.

Elsewhere, Ashmore Group slid 7.61% following its disclosure of an 8% dip in assets under management in its fiscal first quarter.

On the upside, BP and Shell enjoyed boosts of 2.11% and 1.61%, respectively, rallying congruently with an upward movement in oil prices.

Mobico Group, formerly National Express, gained 2.51% as it recovered from a decline on Thursday after revising its full-year earnings outlook downward, announcing a potential sale of its North American school bus business, and pausing its final dividend.

Oxford Instruments also regained some lost territory with a 2.23% uplift after a recent warning that its full-year trading performance could veer “towards the lower end of expectations”.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,599.60 -0.59%
FTSE 250 (MCX) 17,454.22 -2.14%
techMARK (TASX) 4,152.34 -1.17%

FTSE 100 - Risers

Endeavour Mining (EDV) 1,659.00p 4.54%
Fresnillo (FRES) 552.00p 4.39%
BP (BP.) 547.70p 2.16%
United Utilities Group (UU.) 999.80p 1.96%
National Grid (NG.) 979.40p 1.53%
Shell (SHEL) 2,722.00p 1.53%
BAE Systems (BA.) 1,079.50p 1.03%
Severn Trent (SVT) 2,447.00p 0.99%
Rolls-Royce Holdings (RR.) 213.20p 0.66%
Admiral Group (ADM) 2,415.00p 0.54%

FTSE 100 - Fallers

St James's Place (STJ) 640.20p -21.79%
Ocado Group (OCDO) 530.80p -7.24%
JD Sports Fashion (JD.) 130.85p -4.80%
Spirax-Sarco Engineering (SPX) 8,478.00p -4.68%
Hargreaves Lansdown (HL.) 739.80p -3.85%
British American Tobacco (BATS) 2,447.00p -3.55%
WPP (WPP) 713.00p -3.07%
Flutter Entertainment (CDI) (FLTR) 13,180.00p -2.98%
Schroders (SDR) 391.30p -2.95%
Prudential (PRU) 884.00p -2.77%

FTSE 250 - Risers

Centamin (DI) (CEY) 88.05p 6.34%
Mobico Group (MCG) 63.15p 3.08%
Oxford Instruments (OXIG) 1,920.00p 2.02%
Watches of Switzerland Group (WOSG) 495.60p 1.98%
Harbour Energy (HBR) 263.30p 1.70%
PZ Cussons (PZC) 141.40p 1.58%
W.A.G Payment Solutions (WPS) 94.00p 0.86%
Vietnam Enterprise Investments (DI) (VEIL) 582.00p 0.69%
International Public Partnerships Ltd. (INPP) 121.80p 0.66%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 126.00p 0.48%

FTSE 250 - Fallers

Ashmore Group (ASHM) 170.20p -7.80%
TBC Bank Group (TBCG) 2,750.00p -7.25%
PureTech Health (PRTC) 171.60p -6.13%
Wizz Air Holdings (WIZZ) 1,656.50p -6.04%
Digital 9 Infrastructure NPV (DGI9) 36.40p -5.97%
IntegraFin Holding (IHP) 215.80p -5.85%
4Imprint Group (FOUR) 4,850.00p -5.64%
IP Group (IPO) 49.10p -5.58%
Discoverie Group (DSCV) 611.00p -5.27%
JTC (JTC) 670.00p -5.23%