London close: Stocks finish turbulent Tuesday in the red

London markets experienced a bumpy ride on a turbulent trading day, ending Tuesday's session in the red despite cautious optimism in earlier hours.

The FTSE 100 closed down 0.54% at 7,470.16, while the FTSE 250 experienced a more substantial decline, concluding 1.67% lower at 17,677.76.

Currency markets saw a mixed performance, with sterling last down 0.1% against the dollar at $1.2075, while it managed a slender gain of 0.07% on the euro, changing hands at €1.1543.

“We’ve had another day where rising US yields have continued to exert downward pressure on stock markets, with the DAX sinking to a new six-month low, while the FTSE 250 has fallen below its July lows to its lowest levels this year after the latest US JOLTS data prompted another spike in yields,” said CMC Markets chief analyst Michael Hewson.

”The FTSE 100 is faring slightly better, although it is also under pressure, slipping to three-week lows over similar growth and interest rate concerns, while speculation is abounding that the Bank of Japan intervened to push USD-JPY back below 150.00 after US yields moved higher on the August JOLTS numbers.”

Respite in UK shop-price inflation, US job market displays mixed signals

In economic news, the UK saw a dip in shop-price inflation last month, reaching a year-long nadir.

The decline was underscored by an unexpected dip in food prices - the first in over 24 months - according to the BRC-Nielsen shop price index (SPI).

The SPI, which tracks the pricing trends of 500 prominently purchased items in the UK, registered an annual rate drop to 6.2% in September, a decrease of 70 basis points from August's figure and notably beneath the preceding three-month rolling average of 6.8%.

That drop was attributed to a notable contraction in food-price inflation, which plummeted to 9.9% from a previously recorded 11.5%.

The British Retail Consortium ascribed this unexpected dip to a stiff competitive climate among retailers, providing a brief yet tangible relief to consumers.

"Customers who bought dairy, margarine, fish and vegetables - all typically own-brand lines - will have found lower prices compared to last month,” said Helen Dickinson, the BRC's chief executive.

“Households also benefited from price cuts for school uniforms and other back-to-school essentials.”

Looking ahead, Dickinson expects shop price inflation to continue to fall over the rest of 2023 but remains cautious due to several risk factors, including high interest rates, climbing oil prices, global shortages of sugar, and the supply chain disruption from the war in Ukraine.

“Retailers will continue to do all they can to support their customers and bring prices down, especially as households face being squeezed by higher energy and mortgage bills.”

Across the Atlantic, the US job market in August painted a mixed picture, with job openings seeing an upswing of 7.7% on a month-on-month basis, totalling 9.610 million and significantly eclipsing the consensus prediction of 8.83 million, according to data from the Department of Labor.

Meanwhile, new hires experienced a more modest ascent, rising by 0.6% from July to 5.857 million.

Voluntary job separations, or 'quits', increased from July’s 3.619 million to 3.638 million in August, maintaining the quits rate steadfast at 2.3%.

London equities a sea of red by the end of trading

On London’s equity markets, Burberry Group experienced a slump of 3.54% following a downgrade to ‘sell’ by UBS.

The investment bank’s assessment visibly dented investor confidence in the British luxury fashion house despite its resilient reputation in varied market conditions.

Greggs, a staple on the high street with its renowned bakery offerings, also saw its shares diminish by 3.38%.

The decline came despite the company reporting a robust third quarter and maintaining its assertion that yearly targets would be met.

“The CEO Roisin Currie told Reuters the company is not planning to increase prices pre-Christmas, and there is still significant inflation in the market, such as staff wages,” said Victoria Scholar, head of investment at Interactive Investor.

“The comments appear to be weighing on its share price.”

Commodities, too, faced a downturn as miners found themselves cornered by a surging dollar, adversely impacting commodity prices and, consequently, related equities.

Anglo American, Antofagasta, and Glencore experienced falls of 3.16%, 3.5%, and 2.45%, respectively.

Utility firms United Utilities Group and Severn Trent did not escape the downtrend, recording falls of 3.37% and 2.68%.

An explosion at one of Severn Trent’s recycling plants, instigated by a lightning strike, also emerged as a potential factor weighing on its share price.

On a relatively sparse upside, recruitment firm PageGroup ascended 1.45%, continuing its upward trajectory after Jefferies' upgrade to 'hold' from 'underperform' on Monday.

Outside the FTSE 350, fast fashion firm Boohoo Group was down 2.28% on the heels of an announcement of a swing to a first-half loss and a subsequent trimming of its full-year revenue outlook.

Citing a slower-than-anticipated volume recovery and a strategic focus on more profitable sales across its labels, the retailer grappled with diminished investor sentiment.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,470.16 -0.54%
FTSE 250 (MCX) 17,677.76 -1.67%
techMARK (TASX) 4,178.66 -0.99%

FTSE 100 - Risers

Pearson (PSON) 868.00p 1.24%
Smiths Group (SMIN) 1,618.00p 1.06%
Intertek Group (ITRK) 4,125.00p 0.98%
WPP (WPP) 716.60p 0.93%
Haleon (HLN) 341.05p 0.89%
HSBC Holdings (HSBA) 645.20p 0.84%
Unilever (ULVR) 4,053.50p 0.72%
Rightmove (RMV) 558.20p 0.69%
Bunzl (BNZL) 2,924.00p 0.65%
BAE Systems (BA.) 1,015.00p 0.59%

FTSE 100 - Fallers

Ocado Group (OCDO) 561.00p -4.40%
United Utilities Group (UU.) 913.00p -3.96%
Burberry Group (BRBY) 1,826.00p -3.56%
Anglo American (AAL) 2,157.50p -3.53%
Severn Trent (SVT) 2,272.00p -3.28%
Antofagasta (ANTO) 1,369.50p -3.22%
Melrose Industries (MRO) 451.80p -2.50%
JD Sports Fashion (JD.) 145.60p -2.35%
BT Group (BT.A) 113.00p -2.33%
Glencore (GLEN) 453.25p -2.30%

FTSE 250 - Risers

Close Brothers Group (CBG) 865.00p 2.37%
North Atlantic Smaller Companies Inv Trust (NAS) 3,510.00p 2.34%
Syncona Limited NPV (SYNC) 121.00p 1.68%
HGCapital Trust (HGT) 381.00p 1.46%
Essentra (ESNT) 169.20p 1.44%
Pagegroup (PAGE) 427.20p 1.38%
Hays (HAS) 109.50p 1.20%
Rotork (ROR) 307.80p 0.98%
Currys (CURY) 48.04p 0.76%
Quilter (QLT) 84.90p 0.71%

FTSE 250 - Fallers

Diversified Energy Company (DEC) 71.80p -8.71%
Ceres Power Holdings (CWR) 288.80p -6.84%
Vistry Group (VTY) 831.50p -6.10%
Carnival (CCL) 936.80p -5.94%
Auction Technology Group (ATG) 608.00p -5.59%
Mobico Group (MCG) 85.85p -5.35%
PureTech Health (PRTC) 167.00p -5.11%
Drax Group (DRX) 408.90p -5.04%
Liontrust Asset Management (LIO) 557.50p -4.86%
Ithaca Energy (ITH) 166.40p -4.81%