London close: Stocks finish weaker after earlier gains

London markets closed the day weaker on Wednesday, reversing earlier gains as Wall Street stocks opened lower, although mining stocks remained above the waterline.

The FTSE 100 closed down 0.06% at 8,040.38 points, while the FTSE 250 declined 0.41% to 19,719.37 points.

In currency markets, sterling was last down 0.14% on the dollar to trade at $1.2432, while it strengthened 0.01% against the euro, changing hands at €1.1634.

“Even though the FTSE 100 made yet another record high, the recovery in the pound sterling following Tuesday's hawkish remarks by the BoE's chief economist Huw Pill, weighs on the index which is beginning to lose upside momentum,” said IG senior market analyst Axel Rudolph.

“European stock indices which, after a mostly positive session in Asia and German business confidence hitting an eleven-month high, began the day on a positive footing, ended the day mostly flat ahead of key US first quarter earnings and as US mortgage rates hit a five-month high at 7.24%.

“US Treasury yields approaching their November highs also cooled demand for stocks.”

Rudolph said a slightly weaker dollar following Tuesday's disappointing PMI data accompanied “hardly changed” gold, silver and oil prices, as investors looked ahead to Friday's US PCE inflation release.

“USD-JPY continues to push higher and has broken through the psychological JPY 155 barrier, around which the Bank of Japan may intervene around Friday's monetary policy meeting.”

UK manufacturing sector showing signs of improvement

In economic news, the UK manufacturing sector showed signs of improvement in April, according to the latest industrial trends survey from the Confederation of British Industry (CBI).

The survey revealed that output steadied during the three months through April, contrasting with declines earlier in the year.

Specifically, the weighted balance rose to 3, up from January's -10, indicating a more optimistic outlook.

Output increased in 10 out of the 17 sub-sectors, with notable growth seen in aerospace and the food, drink, and tobacco industries.

While total new orders slightly decreased, the decline in domestic orders slowed, contributing to a rise in business sentiment to 9 from -3 in January.

Looking ahead, optimism for export prospects strengthened, reaching 6, the highest level since April 2021.

“Conditions facing manufacturers have taken a turn for the better, with sentiment improving and expectations for the future output growth their strongest in six months,” said Anna Leach, CBI deputy chief economist.

“A softer labour market has eased concerns that skills and labour could constrain output and orders. Concerns about access to materials and components are also at their lowest since January 2020.

“These brighter conditions are supporting a more stable picture for investment over the year ahead.”

On the continent, German business sentiment showed improvement in April, according to the Ifo Institute.

The business climate index climbed to 89.4 from 87.9 in March, surpassing consensus expectations.

The current situation index also rose, reaching 88.9 from 88.1, while the expectations index stood at 89.9 in April compared to 87.7 previously.

“The Ifo current conditions index, which has a better relationship with GDP than the BCI, still points to GDP contracting sharply,” noted Capital Economics.

“But other data released in the past few weeks suggest Germany may be coming out of recession.

“The composite PMI is now in expansionary territory and monthly activity data are consistent with a small rise in GDP in the first quarter.”

Across the Atlantic, durable goods orders in the United States increased slightly more than anticipated last month, according to the Department of Commerce.

Durable goods orders grew 2.6% in March on a month-on-month basis, slightly above the consensus forecast of 2.5%.

However, the prior month's gains were revised lower, and the majority of March's increase was attributed to a substantial jump in orders for Boeing aircraft.

Meanwhile, US mortgage applications experienced a sharp decline, falling by 2.7% week-on-week in the seven days ended April 19th, according to the Mortgage Bankers Association of America.

The decline offset the previous week's 3.3% increase, marking the steepest weekly drop since early February.

The decrease in mortgage applications coincided with a notable increase in mortgage rates to 7.24%, the highest level since November, driven by strong economic data and persistent inflation concerns.

Reckitt and Lloyds rise, Croda slides as sales decline

On London’s equity markets, Reckitt Benckiser Group added 2.92% after releasing first-quarter results.

The consumer goods giant reported a rise in like-for-like revenues, driven by improving price/mix despite a drop in volumes in the first half of the year.

Lloyds Banking Group climbed 0.86% after maintaining its full-year guidance despite a 28% decrease in first-quarter profits amid lower net interest income and higher operating expenses.

Distribution and services provider Bunzl managed 1.11% gains despite a drop in first-quarter revenues.

Mining stocks, including Rio Tinto, Glencore, and Anglo American, performed well, following a surge in iron ore prices to a seven-week high, prompted by supply disruptions reported by Australian producer Fortescue.

Blue-chip silver miner Fresnillo reversed earlier losses to close ahead 0.35%.

PZ Cussons jumped 5.9% on plans to sell the St Tropez tanning brand and amid ongoing operational reviews, while wealth manager Quilter rose 3.61% following a strong first-quarter performance driven by improving equity markets.

On the downside, Croda International declined 4.79% despite backing its full-year profit guidance.

The speciality chemicals company reported a decrease in first-quarter sales, citing challenging comparators from the prior year.

Mitie Group also faced a downturn, with shares dropping by 3.33% after investment fund Alchemy sold 40 million shares in the outsourcing and energy services company.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,040.38 -0.06%
FTSE 250 (MCX) 19,719.37 -0.41%
techMARK (TASX) 4,499.23 -0.03%

FTSE 100 - Risers

Anglo American (AAL) 2,205.00p 4.45%
Reckitt Benckiser Group (RKT) 4,390.00p 2.92%
Rio Tinto (RIO) 5,450.00p 2.50%
BAE Systems (BA.) 1,363.50p 1.75%
InterContinental Hotels Group (IHG) 8,100.00p 1.53%
Glencore (GLEN) 474.10p 1.20%
Bunzl (BNZL) 3,092.00p 1.11%
Mondi (MNDI) 1,516.50p 1.10%
WPP (WPP) 803.80p 0.90%
Lloyds Banking Group (LLOY) 51.78p 0.86%

FTSE 100 - Fallers

Croda International (CRDA) 4,654.00p -4.79%
Ocado Group (OCDO) 367.90p -3.49%
Entain (ENT) 818.80p -3.31%
Persimmon (PSN) 1,300.00p -3.18%
JD Sports Fashion (JD.) 119.15p -3.05%
Burberry Group (BRBY) 1,134.50p -2.58%
SEGRO (SGRO) 846.40p -2.30%
London Stock Exchange Group (LSEG) 8,808.00p -2.11%
Spirax-Sarco Engineering (SPX) 9,205.00p -2.09%
Marks & Spencer Group (MKS) 257.80p -1.94%

FTSE 250 - Risers

PZ Cussons (PZC) 101.00p 6.77%
Darktrace (DARK) 518.60p 5.84%
RHI Magnesita N.V. (DI) (RHIM) 3,630.00p 4.76%
Dunelm Group (DNLM) 1,008.00p 3.97%
Quilter (QLT) 105.60p 3.61%
Hochschild Mining (HOC) 156.00p 3.57%
Bakkavor Group (BAKK) 124.00p 2.93%
Fidelity China Special Situations (FCSS) 213.00p 2.91%
Morgan Advanced Materials (MGAM) 307.00p 2.85%
Oxford Instruments (OXIG) 2,175.00p 2.59%

FTSE 250 - Fallers

Breedon Group (BREE) 365.00p -4.08%
Hammerson (HMSO) 26.72p -3.95%
Crest Nicholson Holdings (CRST) 184.20p -3.76%
Marshalls (MSLH) 256.50p -3.39%
Workspace Group (WKP) 481.00p -3.32%
Elementis (ELM) 139.00p -3.23%
Future (FUTR) 618.00p -3.21%
Mitie Group (MTO) 116.20p -3.17%
Genus (GNS) 1,700.00p -2.86%
Primary Health Properties (PHP) 90.55p -2.63%