London close: Stocks flat as recession fears continue to weigh

London stocks ended a choppy session flat on Friday, as recessionary fears continued to weigh on sentiment.

The FTSE 100 closed flat at 7,168.65, while sterling was down 1.1% against the dollar at 1.2050.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Fears rattling financial markets show little sign of subsiding, with investors spooked about signs of looming recessions, while inflation stays stubbornly high.

"There are concerns that, just like in the seventies era, demand and inflation won’t fall back easily, and that the Federal Reserve and other central banks will have to step on the accelerator of interest rate hikes to bring red hot prices under control. The risk is that could see economies slam into a brick wall of recession, with ripple effects around the world."

Meanwhile, IG market analyst Chris Beauchamp said: "The losses of the first half do not seem to have created any immediate desire to buy the dip it seems. An initial recovery for US markets from the lows of the morning has given way to more losses, and even the prospect of a long weekend in the US hasn’t tempted the dip buyers in.

"There is a growing unease about the summer, especially with a potentially very gloomy Q2 earnings season nearly upon us. It really does look like we have another big leg lower before this bear market is done."

On home shores , a survey showed growth in the manufacturing sector slowed to a two-year low in June. The S&P Global/CIPS manufacturing purchasing managers’ index fell to 52.8 from 54.6 in May, coming in below consensus expectations and the flash estimate of 53.4 A reading above 50.0 indicates expansion, while a reading below signals contraction.

New orders contracted for the first time in 17 months and business optimism hit its lowest since May 2020, as the number of firms expecting production to rise over the coming year fell to 47% in June from 55% a month earlier.

The new orders index declined from 51.1 in May to 48.3 in June - its lowest level for two years.

Companies said a weaker economic outlook, reduced new export order intakes, slower growth of domestic demand, the war in Ukraine, raw material shortages and the slowdown in China all contributed to the reduction in new work received.

There wasn’t a whole lot going on in equity markets. Miners were among the worst performers, with Glencore, Anglo American, Antofagasta and Rio Tinto all lower.

Abrdn and Jupiter Fund Management were both knocked lower by a rating downgrade at Citi. The bank cut its stance on both asset managers to ‘sell’. "We see downside risks for almost all names, but see the biggest risk of disappointment at Abrdn and Jupiter," Citi said in a note on the sector.

Elsewhere, Chemring rose as it said the UK's Serious Fraud Office had closed its investigation into the activities of the Technology Solutions subsidiary and associated persons.

Oxford Biomedica gained as it signed a new three-year deal which would facilitate potential future manufacturing opportunities for the AstraZeneca Covid-19 vaccine.

Market Movers

FTSE 100 (UKX) 7,168.65 -0.01%
FTSE 250 (MCX) 18,636.98 -0.16%
techMARK (TASX) 4,295.19 0.45%

FTSE 100 - Risers

Ocado Group (OCDO) 814.00p 4.20%
SSE (SSE) 1,677.50p 3.81%
Rolls-Royce Holdings (RR.) 85.78p 3.41%
Melrose Industries (MRO) 154.20p 3.01%
Compass Group (CPG) 1,728.00p 2.86%
Ashtead Group (AHT) 3,537.00p 2.85%
Coca-Cola HBC AG (CDI) (CCH) 1,868.50p 2.55%
Unilever (ULVR) 3,800.00p 2.12%
Next (NXT) 5,984.00p 2.12%
National Grid (NG.) 1,073.00p 2.00%

FTSE 100 - Fallers

Harbour Energy (HBR) 332.60p -8.58%
Glencore (GLEN) 426.35p -4.21%
Anglo American (AAL) 2,821.50p -3.93%
Endeavour Mining (EDV) 1,639.00p -3.70%
Abrdn (ABDN) 154.50p -3.35%
Antofagasta (ANTO) 1,121.50p -2.90%
Auto Trader Group (AUTO) 539.60p -2.77%
SEGRO (SGRO) 956.00p -2.13%
Rio Tinto (RIO) 4,834.50p -1.67%
Land Securities Group (LAND) 653.20p -1.63%

FTSE 250 - Risers

Discoverie Group (DSCV) 660.00p 6.45%
Carnival (CCL) 656.80p 6.00%
Wizz Air Holdings (WIZZ) 1,858.50p 5.96%
Helios Towers (HTWS) 128.00p 5.87%
ASOS (ASC) 883.50p 5.37%
TUI AG Reg Shs (DI) (TUI) 137.15p 3.55%
Babcock International Group (BAB) 318.00p 2.98%
888 Holdings (888) 172.40p 2.86%
easyJet (EZJ) 376.90p 2.81%
Renishaw (RSW) 3,660.00p 2.58%

FTSE 250 - Fallers

Chrysalis Investments Limited NPV (CHRY) 96.20p -7.68%
Tullow Oil (TLW) 43.80p -6.53%
Energean (ENOG) 1,048.00p -4.64%
Plus500 Ltd (DI) (PLUS) 1,596.00p -4.60%
HGCapital Trust (HGT) 316.50p -4.24%
Jupiter Fund Management (JUP) 141.90p -4.19%
Bridgepoint Group (Reg S) (BPT) 232.00p -3.97%
Wood Group (John) (WG.) 150.40p -3.59%
Investec (INVP) 429.60p -3.42%
Baltic Classifieds Group (BCG) 126.00p -3.37%