London close: Stocks finish mixed after US inflation reading

London’s stock market had a mixed performance on Thursday, as investors carefully evaluated a crucial inflation report from the United States amidst an otherwise data-heavy trading day.

The FTSE 100 finished down 0.46% at 7,439.13, while the FTSE 250 managed gains of 0.22% to end the trading day at 18,605.70.

In currency markets, sterling was last down 0.48% on the dollar, trading at $1.2660, while it managed to appreciate 0.29% against the euro to change hands at €1.1680.

“It’s been a subdued end to what has been a negative month for European markets, with the FTSE 100 once again finding a base just above the 7,210 level - the third time this year the UK blue-chip has bounced off this key level,” said CMC Markets chief market analyst Michael Hewson.

“Amongst the biggest fallers today Glencore is lower as it goes ex-dividend, along with Endeavour Mining, Antofagasta and IHG.”

Diverse economic trends across UK, eurozone and US

In economic news, the UK automotive industry showcased a strong performance in July, posting a sixth straight month of production growth.

According to the Society of Motor Manufacturers and Traders (SMMT), car production spiked by 31.6% in July, resulting in 76,451 units coming off the assembly lines.

However, despite the encouraging signs, current production still lagged behind pre-pandemic figures, being 29.4% lower than the numbers recorded in July 2019.

“Six months of growth shows that British car production is recovering and, with electrified models increasingly driving volumes, the future is more positive,” said SMMT chief executive Mike Hawes.

“Recent investment announcements have undoubtedly bolstered the sector but global competition remains tough.

“If we are to attract further investment and produce the next generation of zero emission models and technologies, we need a coherent strategy that builds on our strengths and supports all aspects of advanced automotive manufacturing.”

On the continent, unemployment rates in the eurozone remained stable, holding at 6.4% for July, according to Eurostat.

The figures were consistent with economist predictions, and showed a marginal improvement from last year's 6.7% rate in the same month.

However, the number of unemployed individuals in the euro area edged up by 73,000, bringing the total to approximately 10.944 million.

A significant chunk of that demographic - 2.206 million - was under the age of 25, sustaining a youth unemployment rate of 13.8%.

The broader European Union followed suit, with a steady unemployment rate of 5.9%, translating to nearly 12.928 million people out of work.

Across the pond, US consumer spending in July outperformed expectations, increasing by 0.8%, as per the Bureau of Economic Analysis.

That rise followed a revised 0.6% spending growth in June and contradicted economists who had projected a 0.6% growth rate for July.

Meanwhile, inflationary pressures continued to build, with the Personal Consumption Expenditures (PCE) price index - favoured by the Federal Reserve - increasing by 3.3% year-on-year, up from 3% in June.

Notably, the core PCE price index, which excludes volatile categories like food and energy, ticked up to 4.2%.

Finally on data, the US job market showed modest improvement with a decline in initial jobless claims.

Data from the Labor Department revealed that claims fell by 4,000 to 228,000, outperforming economists' expectations of 235,000.

However, the four-week moving average, a more stable measure, saw a slight increase to 237,500.

Grafton Group climbs despite profit dip, others trade lower

On London’s equity markets, Glencore, Croda International, Endeavour Mining, and Redde Northgate all saw their stocks decline as they traded without the entitlement to dividends.

Glencore was hit the hardest with a 3.91% drop, followed by Redde Northgate which dipped by 4.44%.

Endeavour Mining fell by 2.48%, and Croda International saw a less severe reduction of 0.5%.

Kainos Group, the Belfast-based IT services firm, also experienced a downturn, falling 0.65% by the close.

The company had earlier posted gains following its announcement that it still expected to meet full-year results despite an "uncertain" trading environment, but those gains were ultimately reversed.

Financial services firm Quilter saw its stock drop by 2.9% after Citi lowered its price target for the company to 68p from 70p, while maintaining a 'sell' rating.

Citi noted that although Quilter has outperformed the UK market by approximately 25%, larger-than-expected cost cuts have led to 10% upgrades in consensus earnings per share since its first-half results.

"Yet a third major cost-cutting programme in four years may imply low confidence in the revenue outlook, which our analysis suggests is the main profit driver," it said.

"Our cost benchmarking analysis indicates that revenues, not costs, are Quilter’s key issue."

On the upside, building materials supplier Grafton Group climbed 1.15%, even after it reported a 29% fall in its half-year profits.

The company announced pre-tax profits of £93.6m for the six months ended 30 June, compared to £132m the prior year.

Despite the dip in profits, Grafton lifted its dividend by 8.1% to 10p a share and announced a new £50m share buyback programme.

The company said it expected its full-year adjusted operating profit to be around £202.6m, within the range of its own compiled forecasts.

Asia-focussed insurer Prudential meanwhile slid 3.12%, off the back of gains the previous day.

The company had reported a better-than-expected 6% increase in its first-half operating profits, primarily due to heightened activity by Chinese investors in Hong Kong following the lifting of Covid restrictions.

It also laid out a new investment strategy with a focus on Asia.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,439.13 -0.46%
FTSE 250 (MCX) 18,605.70 0.22%
techMARK (TASX) 4,301.38 0.18%

FTSE 100 - Risers

Ocado Group (OCDO) 871.60p 9.86%
Rolls-Royce Holdings (RR.) 222.30p 2.54%
Flutter Entertainment (CDI) (FLTR) 14,410.00p 1.41%
JD Sports Fashion (JD.) 145.25p 1.40%
Phoenix Group Holdings (PHNX) 521.00p 1.36%
Kingfisher (KGF) 234.00p 1.30%
BT Group (BT.A) 115.60p 1.27%
Frasers Group (FRAS) 806.50p 1.26%
Centrica (CNA) 151.75p 1.17%
RS Group (RS1) 760.20p 0.96%

FTSE 100 - Fallers

Glencore (GLEN) 421.45p -3.92%
Prudential (PRU) 966.20p -3.36%
Endeavour Mining (EDV) 1,613.00p -2.48%
Diageo (DGE) 3,243.50p -2.32%
NATWEST GROUP (NWG) 230.40p -2.04%
Melrose Industries (MRO) 512.60p -1.80%
Burberry Group (BRBY) 2,184.00p -1.75%
Compass Group (CPG) 1,993.00p -1.39%
Coca-Cola HBC AG (CDI) (CCH) 2,278.00p -1.34%
Fresnillo (FRES) 575.40p -1.34%

FTSE 250 - Risers

QinetiQ Group (QQ.) 333.40p 3.99%
Digital 9 Infrastructure NPV (DGI9) 59.20p 3.86%
Just Group (JUST) 75.40p 3.43%
GCP Infrastructure Investments Ltd (GCP) 75.30p 3.29%
Darktrace (DARK) 359.70p 2.57%
NextEnergy Solar Fund Limited Red (NESF) 88.80p 2.54%
CLS Holdings (CLI) 126.80p 2.42%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 447.50p 2.40%
Direct Line Insurance Group (DLG) 162.15p 2.24%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 83.20p 2.21%

FTSE 250 - Fallers

CMC Markets (CMCX) 106.00p -7.67%
Redde Northgate (REDD) 321.00p -5.03%
Diversified Energy Company (DEC) 91.55p -4.64%
Pagegroup (PAGE) 418.80p -3.81%
Ithaca Energy (ITH) 141.80p -3.27%
Quilter (QLT) 85.60p -3.17%
PZ Cussons (PZC) 158.60p -3.06%
Centamin (DI) (CEY) 87.75p -2.82%
Hilton Food Group (HFG) 674.00p -2.60%
Baltic Classifieds Group (BCG) 210.50p -2.55%