London close: Stocks finish red after choppy session

London stocks had turned back into the red by the close on Tuesday, with recruitment firms and asset managers pacing the declines after some disappointing corporate updates.

The FTSE 100 was 0.13% lower at 7,683.96 points, while the FTSE 250 recorded a more substantial decrease of 0.51% to end the session at 19,294.02 points.

In currency markets, sterling was last down 0.24% on the dollar at $1.2717, while it weakened 0.09% against the euro, changing hands at €1.1632.

"Most major global stock indices couldn't capitalise on Monday's tech-driven rally and instead consolidated ahead of Thursday's US CPI release and the start of the US fourth-quarter earnings season on Friday," said IG senior market analyst Axel Rudolph.

"Real estate, materials, industrials and utilities were the worst performing sectors amid ongoing sector rotation despite the US small business and economic optimism indices edging higher.

"Eurozone unemployment hitting a record low also couldn't prevent European indices from slipping into the red."

Rudolph noted that oil prices regained some of Monday's losses, provoked by Saudi Arabia cutting its official selling price for Asia in February amid heightened tensions in the Middle East.

"Meanwhile, natural gas prices extended their rally amid frigid weather forecasts while the gold price was little changed amid an appreciating US dollar."

Financial sector contracts in December quarter

In economic news, the UK's financial services sector experienced its first contraction in nearly four years in December, according to the CBI financial services survey.

Business volumes sharply declined with a weighted balance of -23, marking the first contraction since June 2020, in contrast to the previous quarter's balance of 27.

Profitability also dipped to -3 from September's 13, and optimism weakened.

Forecasts for the first quarter of 2024 indicated flat volumes, and the future profitability balance fell to -19.

Nonetheless, firms anticipated slower headcount growth but increased investment in IT, vehicles, plant, and machinery over the next year.

Louise Hellem, chief economist at the Confederation of British Industry, said 2023 ended flatly for financial services firms.

"However, it is encouraging to see that many businesses are still looking to grow their workforce and increase investment going forward," Hellem added.

"With the chancellor having answered the call to make full expensing permanent…it is pleasing to see greater confidence among prospective investors in these areas.

"At the spring budget the government should provide an update on the green finance strategy so that the financial services sector can continue to play its part on the road to net zero."

On the continent, German industrial production faced an unexpected setback in November, marking six consecutive months of decline, as manufacturing continued to struggle in Europe's largest economy.

Monthly production fell by 0.7%, well below the anticipated 0.2% increase, while the annual decrease stood at 4.8%, reported the Federal Statistics Office.

Construction activity declined by 2.9% month-on-month, with October's data revised to show a 0.3% output decline instead of the previously reported 0.4% drop.

Across the Atlantic, the US trade deficit in goods expanded to $90.3bn in November, up from a revised figure of $89.6bn the prior month.

Exports declined by 3.6% month-on-month to $165.1 billion, driven by reduced sales in various categories.

Imports also decreased, albeit at a softer rate of 2.1%, totalling $255.4 billion, mainly due to consumer goods and industrial supply declines.

Jupiter Fund Management tumbles, GSK manages gains

On London's equity markets, B&M European Value Retail was back in the red by the close, finishing down 0.43%.

Earlier, the company reiterated its full-year guidance, declared a special dividend, and reported a 5% increase in third-quarter sales.

B&M maintained its expectations for group adjusted EBITDA for the 2024 financial year between £620m and £630m, representing an increase from the prior year's £573m.

Recruitment firm Hays slid 7.61% after it issued a profit warning, citing a slowdown in hiring activities during December.

In its update for the December quarter, Hays reported a 10% decrease in group net fees, with December seeing a 15% decline.

As a result, the company revised its first-half pre-exceptional operating profit estimate to around £60m, falling short of consensus expectations of approximately £73m.

Sector peers PageGroup and SThree also experienced declines of 3.66% and 4.84%, respectively.

Jupiter Fund Management tumbled 14.29% after it announced higher-than-expected net outflows for 2023 and disclosed the departure of veteran portfolio manager Ben Whitmore.

Fellow wealth manager St James's Place fared similarly, closing down 2.28%.

Games Workshop Group registered a modest decline of 0.77% despite reporting an impressive increase in half-year profits on the back of a successful launch of new products.

On the upside, GSK was ahead 1.67% after announcing the acquisition of Aiolos, a clinical-stage biopharmaceutical company specialising in respiratory and inflammatory condition treatments.

The acquisition was valued at up to $1.4bn.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,683.96 -0.13%
FTSE 250 (MCX) 19,294.02 -0.51%
techMARK (TASX) 4,311.51 0.30%

FTSE 100 - Risers

Severn Trent (SVT) 2,617.00p 1.99%
GSK (GSK) 1,576.20p 1.76%
Hikma Pharmaceuticals (HIK) 1,894.50p 1.75%
Scottish Mortgage Inv Trust (SMT) 774.60p 1.60%
Airtel Africa (AAF) 129.90p 1.41%
F&C Investment Trust (FCIT) 943.00p 1.29%
SSE (SSE) 1,883.50p 1.26%
Smith & Nephew (SN.) 1,083.50p 1.21%
AstraZeneca (AZN) 10,902.00p 1.21%
Rolls-Royce Holdings (RR.) 308.80p 1.18%

FTSE 100 - Fallers

Beazley (BEZ) 528.00p -4.35%
JD Sports Fashion (JD.) 114.35p -4.19%
Ocado Group (OCDO) 708.00p -3.59%
RS Group (RS1) 767.00p -2.49%
St James's Place (STJ) 633.20p -2.25%
Kingfisher (KGF) 226.10p -2.16%
WPP (WPP) 754.80p -2.13%
Standard Chartered (STAN) 637.00p -2.00%
Rio Tinto (RIO) 5,572.00p -1.99%
Endeavour Mining (EDV) 1,511.00p -1.88%

FTSE 250 - Risers

Harbour Energy (HBR) 304.00p 3.12%
HGCapital Trust (HGT) 440.00p 2.92%
Trustpilot Group (TRST) 141.80p 2.68%
Bellevue Healthcare Trust (Red) (BBH) 154.00p 2.53%
Oxford Instruments (OXIG) 2,275.00p 2.48%
Edinburgh Worldwide Inv Trust (EWI) 152.60p 2.42%
Ithaca Energy (ITH) 142.60p 2.30%
Baillie Gifford Japan Trust (BGFD) 707.00p 2.17%
Scottish American Inv Company (SAIN) 524.00p 2.14%
Auction Technology Group (ATG) 481.50p 2.01%

FTSE 250 - Fallers

Jupiter Fund Management (JUP) 75.55p -14.63%
Hays (HAS) 100.00p -7.15%
Crest Nicholson Holdings (CRST) 214.60p -6.33%
SThree (STEM) 391.00p -5.33%
Persimmon (PSN) 1,391.50p -4.30%
Tullow Oil (TLW) 33.12p -4.22%
FDM Group (Holdings) (FDM) 435.00p -3.97%
PZ Cussons (PZC) 147.00p -3.92%
Dr. Martens (DOCS) 81.50p -3.78%
Lancashire Holdings Limited (LRE) 606.00p -3.73%