London close: Stocks manage small bounce from recent sell-offs

London stocks managed a positive finish on Tuesday despite early weakness on Wall Street, as investors picked up some bargains following heavy losses in the previous session.

The FTSE 100 ended the session up 0.37% at 7,243.22, and the FTSE 250 was ahead 0.41% at 19,384.96.

Sterling was in a mixed state, last trading down 0.19% against the dollar at $1.2308, while it strengthened 0.04% on the euro to change hands at €1.1683.

“Stomach-churning volatility continues to dominate financial markets,” said IG chief market analyst Chris Beauchamp.

“After the sharp falls of last Friday and yesterday, some cautious buying has come in, but it looks like the best that buyers can muster is a holding action for now.”

Beauchamp said comments from the Fed’s John Williams that 50-basis point rises made sense at the next two meetings provided some comfort, although it still wasn’t clear that the “see-saw price action” of the last 24 hours would resolve into even a short-term market low.

“Sell-offs like these are never one-way affairs, so we can’t rule out a bounce, but since recession concerns appear to be rising by the day it is unlikely that equities will be able to sustain this for too long.”

In economic news, a survey out earlier showed that retail sales fell in April as the mounting cost of living crisis started to bite.

According to the latest BRC/KPMG retail sales monitor, like-for-like sales fell 1.7% in the four weeks to 30 April compared to the same period a year previously, when they increased 39.6%.

On a total basis, sales decreased 0.3%, with the data making for the first decline in sales for more than a year.

Food sales decreased 1.3% in the three months to April, or by 1.8% on a like-for-like basis.

Non-food sales increased by 1.8% or 6.9% on a total basis, although that remained well below the 12-month total average for growth of 11.1%.

In addition, the British Retail Consortium noted that as sales figures were not adjusted for inflation, the small drop in sales would have masked "a much larger drop" in volumes once inflation was accounted for.

“The rising cost of living has crushed consumer confidence and put the brakes on consumer spending,” said Helen Dickinson, chief executive of the BRC.

“Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation.”

On the continent, German investor confidence strengthened slightly in May, against expectations.

The ZEW indicator of economic sentiment increased to -34.3 in May, up from a two-year low of -41 in April, and better than the consensus of analyst expectations for a reading of -42.

It was boosted by a slightly less pessimistic take on the outlook, although the current conditions index deteriorated to -36.5, below expectations for -35 and the lowest for a year.

May was the third time the current conditions index fell since the outbreak of war in Ukraine.

“The experts still assume [the economic outlook] will continue to deteriorate, but at a slower pace than expected before,” said ZEW president Achim Wambach.

In equity markets, British Gas owner Centrica closed up 3.92% after it said full-year adjusted earnings per share would be at the top end of analyst expectations, following a strong performance in the first four months of 2022.

Elsewhere, IWG was boosted 3.24% by an upgrade to ‘buy’ from ‘hold’ at Berenberg.

Precision instrument maker Spectris advanced 2.25% after it announced the acquisition of US firm Dytran Instruments for $82m (£66m).

Publisher and content producer Future managed gains of 0.67% after it acquired US-based women's lifestyle platform WhoWhatWear from Clique Brands, for an undisclosed sum.

GKN owner Melrose Industries gained 3.76% by the end of trading, as investors swooped in for a bargain.

“Melrose Industries doing well after hitting one-year lows yesterday,” said CMC Markets chief market analyst Michael Hewson.

“It is also notable that while we are seeing some decent gains today.

“Consumer staples are still lagging the wider market, showing that investors remain concerned about consumption trends, and the effect higher inflation will have on consumer spending patterns.”

On the downside, Renishaw lost 3.25% after the engineer cut its annual profit forecast.

Market Movers

FTSE 100 (UKX) 7,243.22 0.37%
FTSE 250 (MCX) 19,384.96 0.41%
techMARK (TASX) 4,238.42 0.55%

FTSE 100 - Risers

Melrose Industries (MRO) 111.65p 3.76%
Phoenix Group Holdings (PHNX) 590.60p 3.40%
Hargreaves Lansdown (HL.) 879.40p 2.97%
London Stock Exchange Group (LSEG) 7,274.00p 2.87%
Schroders (SDR) 2,816.00p 2.62%
Barratt Developments (BDEV) 471.10p 2.61%
Hikma Pharmaceuticals (HIK) 1,741.00p 2.59%
Flutter Entertainment (CDI) (FLTR) 8,200.00p 2.55%
Next (NXT) 6,064.00p 2.51%
Persimmon (PSN) 2,075.00p 2.12%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 123.02p -3.47%
Airtel Africa (AAF) 140.20p -2.71%
Informa (INF) 531.40p -2.24%
Endeavour Mining (EDV) 1,915.00p -2.10%
Avast (AVST) 499.30p -1.98%
Auto Trader Group (AUTO) 550.60p -1.75%
Barclays (BARC) 143.64p -1.60%
ITV (ITV) 67.06p -1.27%
Whitbread (WTB) 2,529.00p -1.25%
Rentokil Initial (RTO) 512.60p -1.24%

FTSE 250 - Risers

Genus (GNS) 2,366.00p 5.91%
NCC Group (NCC) 202.50p 5.58%
Coats Group (COA) 68.20p 4.60%
Urban Logistics Reit (SHED) 174.00p 4.19%
Centrica (CNA) 74.76p 3.92%
Watches of Switzerland Group (WOSG) 857.00p 3.88%
Tyman (TYMN) 263.00p 3.73%
Provident Financial (PFG) 232.00p 3.57%
Abrdn Private Equity Opportunities Trust (APEO) 470.00p 3.52%
888 Holdings (888) 187.30p 3.33%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 680.00p -9.14%
Wood Group (John) (WG.) 217.50p -3.46%
OSB Group (OSB) 496.60p -3.39%
Renishaw (RSW) 4,066.00p -3.25%
Carnival (CCL) 1,044.50p -2.75%
Dr. Martens (DOCS) 185.00p -2.68%
SSP Group (SSPG) 207.80p -2.53%
Harbour Energy (HBR) 461.80p -2.51%
Lancashire Holdings Limited (LRE) 388.20p -2.32%
BMO Commercial Property Trust Limited (BCPT) 111.40p -2.14%