London close: Stocks mixed after short New Year session

London markets had a mixed performance in a shortened pre-holiday trading session on Friday.

The FTSE 100 index managed to secure a modest 0.14% gain, reaching a seven-month high as it closed at 7,733.24.

In contrast, the FTSE 250 dipped 0.15% to end the pre-New Year session at 19,689.63.

In currency markets, sterling was last down 0.16% on the dollar, trading at $1.2713, while it weakened 0.02% against the euro to change hands at €1.1509.

“Here we are, on the last trading day of the year - this year was completely different than what was expected,” said Swissquote Bank senior analyst Ipek Ozkardeskaya.

“We were expecting the US to enter recession, but the US printed around 5% growth in the third quarter.

“We were expecting the Chinese post-Covid reopening to boost the Chinese growth and fuel global inflation, but a year after the end of China’s zero-Covid measures, China is suffocating due to an unexpected deflation and worsening property crisis.

“We were expecting last year’s negative correlation between stocks and bonds to reverse – as recession would boost bond appetite but batter stocks. None happened.”

UK house prices record bigger-than-expected fall

In economic news, UK house prices recorded a larger-than-anticipated year-on-year decline of 1.8% for December, according to mortgage lender Nationwide.

The decline, exceeding the expected 1.4% fall, was attributed to the increased borrowing costs and higher deposit requirements that acted as deterrents for potential buyers.

On a monthly basis, prices remained unchanged, while Nationwide expressed reservations regarding the likelihood of a swift resurgence in house prices or activity in 2024, citing wage growth lagging behind inflation as a contributing factor.

"Housing market activity was weak throughout 2023," said Nationwide chief economist Robert Gardner.

"The total number of transactions has been running at about 10% below pre-pandemic levels over the past six months, with those involving a mortgage down even more - about 20% - reflecting the impact of higher borrowing costs," he added.

On a monthly basis, the average house price slipped to £257,443, down from £258,557 in November.

“Even though house prices are modestly lower and incomes have been rising strongly, at least in cash terms, this hasn’t been enough to offset the impact of higher mortgage rates, which in recent months were still more than three times the record lows prevailing in 2021 in the wake of the pandemic," Gardner said.

He added that a borrower earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 38% of take-home pay – well above the long run average of 30%.

“At the same time, deposit requirements remain prohibitively high for many of those wanting to buy – a 20% deposit on a typical first-time buyer home equates to 105% of average annual gross income – down from the all-time high of 116% recorded in 2022, but still close to the pre-financial crisis level of 108%."

Meanwhile, in Spain, inflation figures for December showed surprising stability.

According to flash estimates released by the National Statistics Institute on Friday, the consumer price index remained flat this month, following a 0.3% decrease in November.

Economists had previously projected a 0.3% increase in prices.

The annual rate of price growth decelerated to 3.1% in December, down from a 3.2% gain in November, falling slightly short of the consensus forecast of 3.3%.

That marked the lowest annual inflation rate recorded since August.

Furthermore, core inflation, which excludes volatile items like food and energy, exhibited a decline to 3.8% from the previous month's 4.5%, reaching its lowest level since March 2022.

Mobico manages gains, Harland & Wolff rockets on AIM

On London’s equity markets, there was a dearth of market-moving news again, although Mobico Group stood out on the FTSE 250 with a 7.05% jump.

There was some news outside the main market, with Harland & Wolff Group rocketing 17.39% after announcing that it had received approval from ministers to enter negotiations for a proposed £200m guaranteed loan facility with UK Export Finance (UKEF) under the Export Development Guarantee Scheme.

Duke Royalty advanced 3.05% after reporting robust third-quarter results, and announcing a follow-on investment in its existing royalty partner, Creō-Tech Industrial Group.

It anticipated recurring cash revenue of £6.3m for the period, marking a significant 12% rise compared to the prior year's £5.6 million.

Kingswood Holdings was 3.6% firmer after revealing plans for the conversion of 77,428,443 convertible preference shares issued in 2019.

The conversion was scheduled for 2024, and would involve HSQ Investment, an indirect subsidiary of funds managed or advised by Pollen Street Capital, taking a majority stake in the company.

On the downside, Saietta Group was off 4.86% after it reported group income, including grants, of £1.4m in the first half, up from £1.3m year-on-year.

While gross profit remained stable at £0.1 million, the gross margin decreased from 13% to 9% compared to the same period in 2022.

Saietta attributed the margin reduction to the absence of retrofit revenues in the first half of the year and higher manufacturing costs prior to recent production automation.

Panthera Resources lost 5.19% after it reported a first-half loss of $1.01m, or one cent per share, narrowing from the prior year's loss of $1.48m.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,733.24 0.14%
FTSE 250 (MCX) 19,689.63 -0.15%
techMARK (TASX) 4,294.44 -0.03%

FTSE 100 - Risers

Standard Chartered (STAN) 666.60p 1.74%
Taylor Wimpey (TW.) 147.05p 1.55%
Hikma Pharmaceuticals (HIK) 1,789.00p 1.22%
Sainsbury (J) (SBRY) 302.60p 1.07%
Prudential (PRU) 887.20p 1.02%
Whitbread (WTB) 3,656.00p 0.99%
Ocado Group (OCDO) 758.40p 0.99%
Shell (SHEL) 2,571.50p 0.88%
Informa (INF) 781.20p 0.85%
BAE Systems (BA.) 1,110.50p 0.82%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,682.50p -1.64%
Land Securities Group (LAND) 704.80p -1.62%
Schroders (SDR) 431.00p -1.53%
Endeavour Mining (EDV) 1,757.00p -1.35%
SEGRO (SGRO) 886.40p -1.20%
Kingfisher (KGF) 243.30p -1.14%
RS Group (RS1) 819.60p -1.11%
Berkeley Group Holdings (The) (BKG) 4,688.00p -1.03%
M&G (MNG) 222.40p -1.02%
International Consolidated Airlines Group SA (CDI) (IAG) 155.35p -0.99%

FTSE 250 - Risers

Mobico Group (MCG) 84.60p 7.91%
Ferrexpo (FXPO) 90.25p 6.55%
PureTech Health (PRTC) 195.80p 4.41%
PPHE Hotel Group Ltd (PPH) 1,200.00p 3.45%
Watches of Switzerland Group (WOSG) 708.50p 3.36%
IWG (IWG) 189.30p 3.16%
Energean (ENOG) 1,044.00p 2.15%
OSB Group (OSB) 464.60p 2.11%
Helios Towers (HTWS) 89.00p 2.06%
NB Private Equity Partners Ltd. (NBPE) 1,682.00p 1.83%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 279.20p -3.32%
RHI Magnesita N.V. (DI) (RHIM) 3,460.00p -2.92%
Travis Perkins (TPK) 828.60p -2.33%
Savills (SVS) 969.00p -2.22%
Me Group International (MEGP) 125.00p -2.19%
Ithaca Energy (ITH) 144.20p -2.04%
North Atlantic Smaller Companies Inv Trust (NAS) 3,840.00p -2.03%
C&C Group (CDI) (CCR) 152.60p -1.93%
Moonpig Group (MOON) 156.60p -1.88%
AJ Bell (AJB) 313.00p -1.76%