London close: Stocks follow Wall Street into the red

London markets closed in the red on Tuesday, turning weaker during the afternoon to mirror the decline in Wall Street equities, as investors monitored the start of the Federal Reserve's two-day policy meeting.

The FTSE 100 index closed with a slight decrease of 0.04%, settling at 8,144.13 points, while the FTSE 250 index saw a larger decline of 0.59%, closing at 19,965.39 points.

In currency markets, sterling was last down 0.42% on the dollar to trade at $1.2510, while it decreased 0.04% against the euro, changing hands at €1.1713.

“The UK looks set for a period of increased price uncertainty, as Brexit border checks raise concerns over a potential resurgence in food inflation,” said Scope Markets chief market analyst Joshua Mahony earlier.

“The EU remains the UK’s largest trading partner, but that relationship could shift as European producers deem in economically unviable to supply the UK market given the implementation of new red tape at the border.

“For markets, this heightens the prospect of a fresh surge in food inflation, coming just as the Bank of England prepare to implement their first rate cut in the coming months.”

Mahony noted that overnight data from the BRC highlighted easing price pressures elsewhere, with non-food goods prices falling by 0.6% over the year to April, bringing the first annual decline in that metric since October 2021.

“Earnings season looks to kick back in as a major determinant of market sentiment today, with Amazon reporting after the close.

“While we have commonly known Amazon as a consumer cyclical stock that should benefit from higher consumer spending, recent trends have instead shifted the focus towards their cloud and AI revenues given the prospective revenue growth they bring.

“However, advertising also represents a key area of growth, which traders should be keenly following.”

Price increases slow in the UK, mortgage approvals climb further

In economic news, the latest data from the British Retail Consortium and NielsenIQ revealed that price increases at UK tills hit their lowest point since the end of 2021 in April.

The annual rate of shop price inflation dropped to just 0.8%, down from 1.3% in March, primarily due to easing food inflation for the 12th consecutive month.

Non-food prices also fell, being 0.6% below last year.

“One year on from the peak, shop price inflation levels are showing signs of normalising, providing relief to households,” said Helen Dickinson, chief executive of the BRC.

“While consumers will welcome the lower shop price inflation, geopolitical tensions and the knock-on impact on commodity prices, like oil, pose a threat to future price stability.

“Retailers will continue to do all they can to keep prices down, but Government has a role to play with pro-growth policies that allow businesses to invest in the customer offer.”

On the housing front, mortgage approvals in the UK continued to climb in March, reaching an 18-month high, according to the Bank of England.

Net mortgage approvals for house purchases rose to 61,325, the highest since September 2022, accompanied by a decrease in effective interest rates on newly-drawn mortgages.

“The recovery in mortgage demand continued in March,” said Peter Arnold, UK chief economist at EY.

“However, the interest in mortgage rates over recent months appears to have taken some of the momentum out of the recovery.

“With swap rates having climbed further during April, and mortgage rates continuing to edge up in response, the EY Item Club expects the recovery in approvals to continue to cool in the near term.”

Across the Atlantic, consumer confidence in the United States unexpectedly weakened in April, according to the Conference Board.

The consumer confidence index declined for the third consecutive month to 97, reflecting growing pessimism about future business conditions and the labour market.

On the upside, urban house-price growth in the US surged to its highest level in 16 months in February, with prices at or near all-time highs.

The S&P CoreLogic Case-Shiller 20-city composite index rose at a year-on-year rate of 7.3%, exceeding forecasts.

In Europe, there were positive signs of economic recovery as the eurozone avoided recession in the first quarter of the year, with GDP expanding by 0.3%, according to data from Eurostat.

Similarly, the German economy posted modest 0.2% growth in the first quarter, driven by the construction sector and robust exports, surpassing analysts' expectations.

Meanwhile, in China, the manufacturing sector continued to show signs of strength in April, according to the latest Caixin general manufacturing PMI, reaching its highest reading since February 2023.

The sustained growth was attributed to increased new work inflows, including from abroad.

HSBC in the green on surprise CEO departure, Prudential falls

On London’s equity markets, HSBC Holdings added 2.75% following the unexpected announcement of chief executive officer Noel Quinn's departure after nearly five years in the role.

Despite a 1.8% drop in first-quarter profit, which stood at $12.7bn, the bank's release of first-quarter results and plans for a $3bn share buyback buoyed investor confidence.

Whitbread jumped 3.94%, driven by a robust bottom-line performance and the announcement of a £150m share buyback, coupled with plans to trim underperforming restaurants and bolster its hotel segment.

Hargreaves Lansdown and Rotork also saw gains, propelled by positive trading updates, while Telecom Plus registered an increases due to optimistic profit forecasts, and Haleon was in the green on plans to close its only UK manufacturing facility.

On the downside, Prudential slid 5.45% drop despite reporting an 11% rise in first-quarter net new business profit.

Energy stocks took a hit as weaker crude oil prices weighed on sentiment, resulting in Harbour Energy and Energean slipping by 2.76% and 2.99%, respectively.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,144.13 -0.04%
FTSE 250 (MCX) 19,965.39 -0.59%
techMARK (TASX) 4,589.91 -0.13%

FTSE 100 - Risers

HSBC Holdings (HSBA) 695.60p 4.12%
Whitbread (WTB) 3,167.00p 3.94%
Intermediate Capital Group (ICG) 2,100.00p 3.35%
Haleon (HLN) 339.50p 2.48%
Tesco (TSCO) 296.30p 1.47%
Scottish Mortgage Inv Trust (SMT) 842.60p 1.13%
M&G (MNG) 201.10p 0.88%
Standard Chartered (STAN) 689.80p 0.88%
Unilever (ULVR) 4,140.00p 0.85%
Beazley (BEZ) 663.00p 0.84%

FTSE 100 - Fallers

Fresnillo (FRES) 554.50p -5.50%
Prudential (PRU) 701.00p -5.45%
Anglo American (AAL) 2,634.00p -4.22%
Entain (ENT) 786.60p -3.86%
Vodafone Group (VOD) 67.66p -3.34%
Antofagasta (ANTO) 2,210.00p -3.16%
Centrica (CNA) 127.95p -2.37%
Taylor Wimpey (TW.) 131.90p -2.30%
Ashtead Group (AHT) 5,842.00p -2.21%
St James's Place (STJ) 435.60p -2.07%

FTSE 250 - Risers

Hargreaves Lansdown (HL.) 813.80p 3.59%
Moonpig Group (MOON) 155.80p 3.18%
Playtech (PTEC) 530.00p 3.11%
Tate & Lyle (TATE) 659.00p 2.57%
Rotork (ROR) 323.40p 2.34%
Future (FUTR) 663.00p 2.00%
Urban Logistics Reit (SHED) 115.80p 1.76%
Ashmore Group (ASHM) 193.40p 1.42%
Cranswick (CWK) 4,310.00p 1.29%
Telecom Plus (TEP) 1,736.00p 1.28%

FTSE 250 - Fallers

Discoverie Group (DSCV) 705.00p -5.75%
Aston Martin Lagonda Global Holdings (AML) 148.20p -5.00%
Close Brothers Group (CBG) 449.80p -4.69%
CMC Markets (CMCX) 262.00p -4.20%
Centamin (DI) (CEY) 121.20p -4.04%
Watches of Switzerland Group (WOSG) 338.80p -3.70%
FirstGroup (FGP) 162.20p -3.68%
Trainline (TRN) 298.40p -3.49%
Hochschild Mining (HOC) 155.80p -3.47%
TUI AG Reg Shs (DI) (TUI) 566.00p -3.25%