London close: Stocks make small gains on quiet Thursday

London’s stock markets saw a positive turnaround by the end of the day on Thursday despite subdued trading activity due to the Thanksgiving holiday in the United States.

The FTSE 100 closed with a gain of 0.19%, reaching 7,483.58 points, while the FTSE 250 recorded a marginal increase of 0.004%, closing at 18,480.83.

In currency markets, sterling was last up 0.32% on the dollar, trading at $1.2534, while it gained 0.15% against the euro to change hands at €1.1491.

“Despite ECB minutes showing that rate hikes remain on the table and a sixth consecutive month of reduced European private sector activity, albeit at a softer pace, European stock indices continue to advance,” said IG senior market analyst Axel Rudolph.

“German private sector contraction eased in November, though, and surpassed market expectations.”

Private sector shows signs of stabilising

In economic news, the UK’s private sector showed signs of stabilising in November, primarily driven by growth in the services sector, according to a closely-watched survey.

The flash S&P Global/CIPS UK PMI composite output index moved into positive territory at 50.1, up from October’s 48.7.

That marked the first time it had risen above the critical 50 level since July and surpassed expectations for no change.

Notably, the UK services PMI business activity index climbed to 50.5, a four-month high from 49.5, exceeding consensus expectations.

Although manufacturing remained in contraction, it showed improved performance, with the UK manufacturing output index rising to 47.9 from the previous month’s 44.3.

The PMI for manufacturing also increased to 46.7, a six-month high.

However, the survey indicated a decline in new order intakes for the fifth consecutive month, suggesting persistently subdued underlying demand conditions.

Additionally, it pointed to persistent inflation pressures, with both input costs and average prices rising faster than in October.

“The UK economy found its feet in November, as the service sector arrested a three-month sequence of decline and manufacturers began to report less severe cutbacks to production schedules,” said Tim Moore, economics director at S&P Global Market Intelligence.

“Relief at the pause in interest rate hikes and a clear slowdown in headline measures of inflation are helping to support business activity.”

Earlier in the day, it was confirmed that energy bills in the UK would increase by 5% starting in January in response to higher wholesale gas prices.

Energy regulator Ofgem announced that the price cap would rise from £1,834 to £1,928, representing a £94 increase for households using an average amount of gas and electricity and paying by direct debit.

It blamed the price hike on global events, including renewed conflicts in the Middle East, which had driven up wholesale energy prices.

While the price cap had significantly dropped from its peak of £4,279 during the Ukraine conflict, it remained notably higher than in 2021 when it was below £1,200.

“This rise is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price we all pay,” said Jonathan Brearley, chief executive of Ofgem.

“It is important that customers are supported, and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills.”

In the eurozone, there were signs of a slowdown in the downturn across both the manufacturing and services sectors in November, according to data from S&P Global and Hamburg Commercial Bank (HCOB), although the economy still appeared poised to enter a technical recession.

The composite purchasing managers’ index (PMI) for the eurozone rose to a two-month high of 47.1, up from October’s 46.5.

While that exceeded the consensus estimate of 46.9, it remained below the crucial 50-point threshold that signifies growth.

The eurozone services PMI improved slightly to 48.2 from 47.8, just ahead of the 48.1 estimate, while the manufacturing PMI rose to 43.8 from 43.1, surpassing the 43.4 forecast.

However, manufacturing output declined for the eighth consecutive month, and services decreased for the fourth straight month, indicating ongoing economic challenges in the region.

Virgin Money tumbles, ex-divs prove a drag

On London’s equity markets, Vodafone Group declined 5.22%, followed by British Land with a 4.09% drop and Land Securities with a 2.42% decrease.

Liontrust Asset Management also registered a decline of 3.67%, while National Grid and Great Portland Estates experienced losses of 2.76% and 2.32%, respectively, with all trading weaker as they went without entitlement to the dividend.

Transport operator FirstGroup faced a 3.6% decrease after announcing a one-off hit from its pension plans.

Virgin Money UK slid 6.53% after announcing a decrease in full-year profits and set aside £309m for credit card impairment charges.

On the upside, product inspection, testing, and certification company Intertek Group gained 3.32%.

Despite some limitations due to currency movements, the company expressed confidence in its ability to meet its 2023 targets after a solid third quarter.

BAE Systems saw a modest increase of 0.87% following JPMorgan Cazenove’s decision to raise its price target on the shares to 1,300p from 1,150p.

The bank’s upbeat outlook was influenced by a recent event where BAE Systems’ chief executive and chief financial officer presented, leaving JPMorgan Cazenove “incrementally positive” on the company’s investment prospects.

Consumer goods giant PZ Cussons showed strength with a 3.04% increase in its stock price.

The company reported consistent trading performance and expected to report low-single-digit like-for-like revenue growth for the first half of the 2024 financial year, driven by strong performance in Nigeria, Australia, and New Zealand.

LondonMetric Property rose 1.27% after raising its interim dividend.

The boost in its share price came following a solid first half, where the company swung to a profit due to a revaluation of its portfolio.

Oil giants BP and Shell both performed positively, with BP seeing a 1.37% increase and Shell gaining 1.41%, benefiting from a rebound in oil prices.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,483.58 0.19%
FTSE 250 (MCX) 18,480.83 0.00%
techMARK (TASX) 4,126.66 0.12%

FTSE 100 - Risers

Intertek Group (ITRK) 3,960.00p 3.42%
Weir Group (WEIR) 1,852.00p 1.81%
Ashtead Group (AHT) 4,800.00p 1.59%
BP (BP.) 473.50p 1.58%
Rolls-Royce Holdings (RR.) 240.70p 1.35%
Standard Chartered (STAN) 666.20p 1.34%
Shell (SHEL) 2,586.00p 1.15%
Pershing Square Holdings Ltd NPV (PSH) 3,170.00p 1.15%
Sainsbury (J) (SBRY) 269.90p 1.05%
BAE Systems (BA.) 1,072.00p 1.04%

FTSE 100 - Fallers

Vodafone Group (VOD) 70.87p -5.41%
Whitbread (WTB) 3,204.00p -4.19%
International Consolidated Airlines Group SA (CDI) (IAG) 154.25p -2.87%
National Grid (NG.) 1,004.50p -2.81%
Imperial Brands (IMB) 1,833.50p -2.40%
Land Securities Group (LAND) 631.80p -2.05%
Fresnillo (FRES) 529.20p -2.00%
Entain (ENT) 864.40p -1.86%
JD Sports Fashion (JD.) 147.90p -1.63%
InterContinental Hotels Group (IHG) 6,166.00p -1.41%

FTSE 250 - Risers

Ithaca Energy (ITH) 166.40p 8.62%
PZ Cussons (PZC) 143.20p 3.77%
Bank of Georgia Group (BGEO) 3,510.00p 2.93%
CAB Payments Holdings (CABP) 63.80p 2.90%
Energean (ENOG) 965.50p 2.88%
Diversified Energy Company (DEC) 72.20p 2.56%
International Distributions Services (IDS) 252.50p 2.52%
Clarkson (CKN) 2,925.00p 2.45%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 133.80p 2.45%
Johnson Matthey (JMAT) 1,570.00p 2.45%

FTSE 250 - Fallers

Virgin Money UK (VMUK) 146.75p -6.53%
FirstGroup (FGP) 167.10p -4.51%
British Land Company (BLND) 347.50p -4.06%
Carnival (CCL) 997.40p -4.00%
Urban Logistics Reit (SHED) 117.60p -3.92%
Liontrust Asset Management (LIO) 567.00p -3.90%
HICL Infrastructure (HICL) 132.60p -3.35%
easyJet (EZJ) 407.90p -3.34%
Pets at Home Group (PETS) 287.80p -2.97%
3i Infrastructure (3IN) 325.50p -2.84%