London close: Stocks finish mixed on quiet trading day

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Sharecast News | 04 Jul, 2023

London’s stock markets closed on a mixed note on Tuesday, in what was a relatively quiet trading day amidst a lack of economic news, and as the US markets remained closed for Independence Day.

The FTSE 100 ended the day with a marginal decline of 0.1% at 7,519.72 points, while the FTSE 250 managed gains of 0.14% to finish at 18,533.79 points.

In currency markets, sterling was last up 0.24% on the dollar to trade at $1.2724, as it advanced 0.42% against the euro to change hands at €1.1678.

“European equity indices did not benefit for long from a slightly positive Asian session as Australia kept its cash rate steady at 4.1%,” said IG senior market analyst Axel Rudolph.

“European stock indices spent the day drifting lower in low volume as US markets were shut for Independence Day and as Germany's trade surplus narrowed to a five-month low.”

Australian central bank pauses rate hikes; Germany's trade surplus contracts in May

In economic news, the Reserve Bank of Australia (RBA) elected to pause its rate hikes earlier in the global day, marking only the second instance in its last 14 policy meetings.

The decision left the official cash rate at a standing 11-year high of 4.1%.

Governor Philip Lowe put the decision down to a need for understanding the ramifications of recent hikes on the economy, especially in the face of persistent inflationary pressures.

“The increases in interest rates have begun to promote a more sustainable equilibrium between the economy's supply and demand, and they will continue to do so,” said Governor Lowe.

He cited prevailing uncertainties regarding the economic forecast as a key factor in the board's decision to hold interest rates steady this month.

The Governor also raised the possibility of additional monetary policy tightening in the future, which would hinge on economic and inflation trajectories.

“The board remains firmly committed to guiding inflation back to its target and will undertake necessary measures to attain this,” Lowe added.

Elsewhere, Germany reported a shrinking seasonally-adjusted trade surplus of €14.4bn for May, significantly below market expectations of €17.5bn and a downward revision from April's €16.5bn.

In May, German exports saw a marginal monthly increase of 0.1%, but declined by 0.7% year-on-year.

On the other hand, imports experienced a 1.7% rise from the previous month, which contributed to the diminishing trade surplus.

Sainsbury's and Dunelm drop, housebuilders climb despite JPMorgan caution

On London’s equity markets, supermarket chain J Sainsbury fell 1.82% despite reporting a rise in grocery sales.

Sainsbury's announced an 11% increase in grocery sales for the four months ended 24 June, even as it maintained its annual guidance.

Total like-for-like sales increased by 9.8% during the same period, as the company put in efforts to lower prices.

Amid accusations of supermarkets exacerbating inflation by increasing profit margins during the ongoing cost-of-living crisis, Sainsbury's said it spent £60m on price cuts.

The company maintained its forecast of underlying pre-tax profits for 2023-2024 to be within the range of £640m to £700m, compared to £690min in the prior year.

Meanwhile, Dunelm Group's shares took a hit, declining 4.29% after RBC Capital Markets downgraded the homeware retailer's rating to 'underperform'.

On the upside, housebuilding companies Persimmon and Taylor Wimpey saw slight increases in their share prices, despite a cautious note from JPMorgan Cazenove.

The investment bank warned that the sector's valuations remained above October 2022 levels and predicted "incremental downside risks to estimates."

Despite that, Persimmon's shares closed 0.19% higher, and Taylor Wimpey's shares were up 0.29%.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,519.72 -0.10%
FTSE 250 (MCX) 18,533.79 0.14%
techMARK (TASX) 4,414.12 0.25%

FTSE 100 - Risers

Ocado Group (OCDO) 615.20p 2.23%
AstraZeneca (AZN) 10,580.00p 1.99%
SEGRO (SGRO) 740.60p 1.95%
Land Securities Group (LAND) 597.00p 1.53%
Rightmove (RMV) 526.60p 1.27%
Unite Group (UTG) 889.00p 1.25%
JD Sports Fashion (JD.) 147.70p 1.16%
Mondi (MNDI) 1,237.50p 1.14%
Pershing Square Holdings Ltd NPV (PSH) 2,910.00p 0.90%
Smith (DS) (SMDS) 280.90p 0.90%

FTSE 100 - Fallers

IMI (IMI) 1,593.00p -2.21%
Barclays (BARC) 152.56p -1.97%
Sainsbury (J) (SBRY) 269.60p -1.82%
Tesco (TSCO) 247.80p -1.67%
NATWEST GROUP (NWG) 241.90p -1.55%
CRH (CDI) (CRH) 4,313.00p -1.44%
Severn Trent (SVT) 2,539.00p -1.40%
3i Group (III) 1,899.50p -1.38%
Compass Group (CPG) 2,152.00p -1.06%
BAE Systems (BA.) 909.00p -0.98%

FTSE 250 - Risers

Synthomer (SYNT) 78.50p 4.81%
FDM Group (Holdings) (FDM) 592.00p 4.59%
Future (FUTR) 718.00p 3.98%
Target Healthcare Reit Ltd (THRL) 75.00p 3.31%
TUI AG Reg Shs (DI) (TUI) 602.00p 3.16%
Elementis (ELM) 107.40p 2.87%
Empiric Student Property (ESP) 86.30p 2.74%
Warehouse Reit (WHR) 84.20p 2.68%
Safestore Holdings (SAFE) 876.00p 2.51%
Tritax Eurobox (GBP) (EBOX) 53.00p 2.51%

FTSE 250 - Fallers

Bank of Georgia Group (BGEO) 2,780.00p -5.44%
Dunelm Group (DNLM) 1,072.00p -4.29%
TBC Bank Group (TBCG) 2,340.00p -3.90%
Senior (SNR) 169.00p -3.43%
Liontrust Asset Management (LIO) 688.00p -2.20%
HICL Infrastructure (HICL) 132.00p -1.93%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 266.00p -1.85%
Babcock International Group (BAB) 279.20p -1.83%
Pennon Group (PNN) 700.00p -1.82%
Marks & Spencer Group (MKS) 192.20p -1.81%

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