London close: Stocks little changed as investors look to US data

London’s equity markets closed with a subdued performance on Tuesday, after a mixed but largely flat session trend as investors exercised caution ahead of US inflation figures later in the week.

The FTSE 100 ended the day with a marginal decline of 0.02%, settling at 7,683.02 points, while the FTSE 250 managed gains of 0.19%, reaching 19,163.66 points.

In currency markets, sterling was last flat against the dollar to trade at $1.2685, while it saw a slight uptick of 0.01% on the euro, changing hands at €1.1691.

“Risk on sentiment has taken a hit as US durable goods orders saw their biggest month-on-month fall since April 2020 while US home prices increased the most since November 2022,” said IG senior market analyst Axel Rudolph.

“The rally in major US and European stock indices is thus taking a breather except for the German DAX 40 index which has made a new record high as consumer morale improved slightly.”

Rudolph added that oil prices were again rising amid ongoing shipping disruptions and repeated breakdowns in talks for a Gaza ceasefire, raising supply worries.

“The gold price is little changed despite the dollar regaining some lost ground ahead of Wednesday's second estimate of the US fourth quarter GDP growth rate, and Thursday's PCE inflation print.”

Shop price inflation falls further in February

In economic news, shop price inflation in the UK reached its lowest level in nearly two years in February, according to fresh data from the British Retail Consortium-NielsenIQ shop price index.

The annual rate of price growth dropped to 2.5%, down from 2.9% in January, driven by easing supply-chain pressures that impacted food prices.

That decline, below the three-month average rate of 3.3%, marked the lowest level since March 2022.

Non-food inflation remained unchanged at 1.3% compared to the previous year, while food inflation eased to 5.0% from 6.1%, continuing a ten-month trend of deceleration.

However, according to BRC chief executive Helen Dickinson, “significant uncertainties remain” as geopolitical tensions increase.

“Prices of non-food goods will be more susceptible to shipping costs, which have risen due to the re-routing of imports around the Cape of Good Hope,” she said.

Meanwhile, Dickinson highlighted that UK retailers were facing a big rise in business rates bills in April, which was “determined by last September’s sky-high inflation rate”.

“April’s rate rise should be based on April’s inflation, and the Chancellor should use the Spring Budget to make this correction, supporting business investment and helping to drive down prices for consumers.”

On the continent, German consumer sentiment was expected to stabilise at a low level next month, according to survey data published earlier.

The consumer sentiment index, jointly published by GfK and the Nuremberg Institute for Market Decisions (NIM), showed a slight increase heading into March, rising to -29.0 from a revised -29.6 in the prior month, aligning with expectations amid ongoing concerns about Europe's largest economy.

Across the Atlantic, US durable goods orders experienced a significant decline at the beginning of 2024, primarily driven by a sharp decrease in orders for defence aircraft and parts.

According to the Department of Commerce, durable goods orders fell by 6.1% in January on a seasonally adjusted basis, reaching $276.65bn, compared to a consensus estimate of -4.5%.

The decline followed a downward revision to the prior month, with orders initially reported as flat but later revised to a decrease of 0.3% compared to December.

Total durable goods orders were down by 0.8% compared to the same month the previous year.

Conversely, house price inflation in the US saw an uptick at the end of 2023, driving prices to new record highs.

The S&P CoreLogic Case-Shiller US national home price index, in non-seasonally adjusted terms, accelerated to a year-on-year pace of 5.5% in December, up from 5.0% the prior month.

That marked the seventh consecutive record reading for house prices, according to S&P, indicating continued strength in the housing market despite broader economic uncertainties.

Miners in the green, Imperial Brands falls on vape tax concerns

On London’s equity markets, mining giants Anglo American, Antofagasta, and Rio Tinto all recorded gains, with increases of 2.07%, 2.2%, and 0.88%, respectively.

Russ Mould, investment director at AJ Bell, pointed to the fact that China “took steps to bolster confidence in its currency and economy ahead of a big leadership summit which kicks off in Beijing in early March”.

Flutter Entertainment also performed well, climbing by 2.31% following an upgrade from Barclays, which raised its stance on the shares to 'overweight' from 'equalweight' and increased the price target.

Endeavour Mining saw a rise of 1.11% as wet commissioning activities began at the Sabodala-Massawa expansion project in Senegal, with first gold expected in early May.

Close Brothers Group rebounded, surging 7.78%, after recent weakness fuelled by a dividend suspension.

Cruise operator Carnival added 4.36% on positive news from Norwegian Cruise Line, which forecast a surprise profit in its first quarter due to strong bookings for 2024.

On the downside, Croda International declined 3.16% after warning of lower operating margins, attributed to customer destocking and a weak macroeconomic environment.

Smith & Nephew reversed earlier gains to close lower by 1.02%, despite posting better-than-expected full-year trading profit and lifting its outlook for 2024.

Currys also gave up gains, falling by 0.37%, having risen earlier on reports of a sweetened offer from investment firm Elliott Advisors.

Abrdn, Jupiter Fund Management, and Ninety One all experienced declines, with Abrdn citing narrowing full-year losses but warning of margin hits due to client shifts to passive investing.

Imperial Brands fell by 4.84% amid reports of a potential vaping tax announcement in the upcoming Budget.

Unilever also saw a decline of 2.01% after Morgan Stanley downgraded the shares, expressing concerns about cash conversion and emerging markets exposure relative to peers.

Outside the FTSE 305, On The Beach surged by 13.44% after signing a long-term distribution agreement with Ryanair, despite recent tensions between the two companies.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,683.02 -0.02%
FTSE 250 (MCX) 19,163.66 0.19%
techMARK (TASX) 4,400.98 0.26%

FTSE 100 - Risers

Vodafone Group (VOD) 68.40p 3.51%
Flutter Entertainment (DI) (FLTR) 17,080.00p 2.31%
Anglo American (AAL) 1,760.00p 2.07%
SSE (SSE) 1,594.00p 1.92%
Burberry Group (BRBY) 1,311.50p 1.90%
Scottish Mortgage Inv Trust (SMT) 803.20p 1.44%
Antofagasta (ANTO) 1,798.50p 1.41%
BT Group (BT.A) 106.25p 1.19%
Diageo (DGE) 3,027.00p 1.15%
HSBC Holdings (HSBA) 602.40p 1.12%

FTSE 100 - Fallers

Imperial Brands (IMB) 1,730.50p -4.84%
Croda International (CRDA) 4,748.00p -3.16%
Unilever (ULVR) 3,915.50p -2.01%
Informa (INF) 810.60p -1.89%
Frasers Group (FRAS) 816.00p -1.86%
WPP (WPP) 713.80p -1.76%
SEGRO (SGRO) 849.20p -1.64%
BAE Systems (BA.) 1,235.50p -1.63%
Barratt Developments (BDEV) 470.40p -1.45%
Relx plc (REL) 3,454.00p -1.43%

FTSE 250 - Risers

Close Brothers Group (CBG) 357.60p 7.78%
Carnival (CCL) 1,140.00p 5.75%
Watches of Switzerland Group (WOSG) 437.00p 4.70%
Mobico Group (MCG) 81.00p 4.58%
Darktrace (DARK) 361.00p 4.34%
Aston Martin Lagonda Global Holdings (AML) 176.50p 4.01%
Bakkavor Group (BAKK) 95.20p 3.70%
Inchcape (INCH) 683.50p 3.64%
RHI Magnesita N.V. (DI) (RHIM) 3,588.00p 3.58%
Pennon Group (PNN) 678.50p 3.34%

FTSE 250 - Fallers

Abrdn (ABDN) 156.20p -3.28%
FDM Group (Holdings) (FDM) 394.50p -3.07%
C&C Group (CDI) (CCR) 150.60p -2.96%
Ninety One (N91) 164.00p -2.67%
Hochschild Mining (HOC) 91.40p -2.66%
Tullow Oil (TLW) 28.92p -2.63%
Jupiter Fund Management (JUP) 85.30p -2.51%
IWG (IWG) 188.10p -2.35%
Softcat (SCT) 1,475.00p -2.33%
Savills (SVS) 917.50p -2.28%