London close: Stocks mixed as bargain hunters pick over FTSE 100

London stocks showed a mixed performance by the close on Wednesday, with the top-flight index in the green as investors hunted for bargains after its four-week low on Tuesday.

The FTSE 100 was ahead 0.35%, closing at 7,847.99 points, while the FTSE 250 index saw a slight decline of 0.02%, ending the day at 19,340.14 points.

In currency markets, sterling was last up 0.2% on the dollar, trading at $1.2451, while it dipped 0.05% against the euro, changing hands at €1.1696.

“The world has spent four days waiting for an Israeli response to Iran’s weekend attacks, and none has yet materialised,” said IG chief market analyst Chris Beauchamp.

“The wave of selling across global markets has subsided for now, though we suspect it could easily return should Tel Aviv opt for a major retaliatory action.”

Beauchamp also looked across the pond, noting that Netflix would be the first of the “mostly magnificent seven” to report earnings on Thursday, which would give the market something else to focus on.

“While the broader US stock market has finally seen some real downside this week, Netflix stock is not even 4% off its record high.

“After an uneventful start to earnings season so far, perhaps the streaming giant’s numbers can inject some excitement.”

UK inflation slows in March as decline in house prices slows

In economic news, UK inflation saw a notable slowdown in March, hitting its lowest point in three-and-a-half years.

However, the decrease was less pronounced than anticipated, prompting caution from the Bank of England in managing price pressures before considering interest rate adjustments.

The consumer price index rose 3.2% year-on-year in March, down from 3.4% in February but surpassing analysts' expectations of 3%.

That still marked the lowest annual rate since September 2021.

The drop in price growth was primarily attributed to a significant decrease in food inflation, dropping to 4.0% from 5.0% in the prior month, while housing costs continued to decline.

Transport prices, however, saw a slight 0.1% increase after four consecutive months of declines.

The core inflation rate, excluding volatile items like energy, food, alcohol, and tobacco, eased to 4.2% in March from 4.5% in February, reaching its lowest level since December 2021.

Daniel Austin, chief executive and co-founder at ASK Partners, said falling inflation “suggests that the Bank of England is likely to maintain interest rates for an extended period, particularly considering the signs of economic recovery we've witnessed”.

“This all points to a positive domestic story of an economy exiting a mild recession but does mean that pressure will remain on those servicing debt and with ongoing global market uncertainty surrounding the Middle East crisis, the coming months are set to be shaky.”

Elsewhere, the annual decline in UK house prices slowed to 0.2% in February, marking its lowest rate of decrease in eight months, according to the Office for National Statistics.

At the same time, rent inflation surged to a record high.

The average house price in February stood at £281,000, with the year-on-year decline moderating from -1.3% in the 12 months to January.

House prices in England fell by 1.1% year-on-year to £298,000, and in Wales, they declined by 1.2% to £211,000, while Scotland saw a 5.6% increase compared to last year, reaching £188,000.

Meanwhile, rent hikes hit a record high in March, rising 9.2% year-on-year on average, up from 9% in the 12 months to February, marking the highest annual percentage change since records began in 2015.

Average private rents reached £1,285 in England, with the highest rent inflation seen in London at 11.2%, and the lowest in the North East at 6.1%.

Additionally, rents increased 9% in Wales, reaching £727, and surged 10.5% in Scotland, reaching £947.

On the continent, inflation in the eurozone in March confirmed a slowdown, matching the 28-month low set in November.

According to Eurostat's final estimate of the harmonised index of consumer prices, the annual inflation rate dropped to 2.4% last month, consistent with the initial estimate from two weeks ago and meeting consensus forecasts.

The figure was down from 2.6% in February and represented the lowest level in four months, with inflation not dipping below such a level since July 2021.

Core inflation was confirmed at 2.9% in March, down from 3.1% in February and marking the lowest rate seen since February 2022.

Mining stocks in focus, IDS leaps on takeover rumours

On London’s equity markets, mining stocks drew attention, with Rio Tinto and Anglo American among the top risers.

Rio Tinto, despite a notable decline in first-quarter iron ore shipments and production, maintained its annual production guidance, contributing to a 2.6% increase in its stock value.

Anglo American meanwhile saw a rise of 3.51%, buoyed by an uptick in rough diamond sales at its De Beers division.

Sector peer Antofagasta added 2.76% after it reaffirmed its full-year output targets, despite a notable drop in copper production during the first quarter.

Glencore and Fresnillo also saw a positive performance, with their stock prices rising by 1.56% and 2.91% respectively.

A standout performer was Royal Mail parent International Distributions Services (IDS), which surged 15.85% by the close.

The surge came after reports surfaced that Daniel Křetínský, the company's largest shareholder, was preparing a takeover bid following a significant decrease in IDS's market value in recent months.

Struggling online fashion retailer Asos advanced 4.86% following the release of its first-half results.

The company's performance exceeded expectations, as Asos also announced plans to significantly increase underlying earnings in the 2024-2025 financial year by cutting costs and reducing stock levels.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,847.99 0.35%
FTSE 250 (MCX) 19,340.14 -0.02%
techMARK (TASX) 4,387.24 -0.19%

FTSE 100 - Risers

Anglo American (AAL) 2,168.50p 3.51%
Fresnillo (FRES) 601.50p 2.91%
Antofagasta (ANTO) 2,269.00p 2.76%
Rio Tinto (RIO) 5,388.00p 2.55%
B&M European Value Retail S.A. (DI) (BME) 512.60p 2.52%
St James's Place (STJ) 411.00p 2.24%
Diageo (DGE) 2,798.00p 1.93%
JD Sports Fashion (JD.) 119.05p 1.84%
International Consolidated Airlines Group SA (CDI) (IAG) 160.70p 1.84%
Croda International (CRDA) 4,907.00p 1.59%

FTSE 100 - Fallers

SEGRO (SGRO) 830.80p -2.04%
Phoenix Group Holdings (PHNX) 476.00p -1.82%
Sage Group (SGE) 1,143.00p -1.72%
Flutter Entertainment (DI) (FLTR) 14,760.00p -1.60%
GSK (GSK) 1,590.00p -1.27%
IMI (IMI) 1,718.00p -1.04%
Mondi (MNDI) 1,363.50p -0.94%
Ashtead Group (AHT) 5,604.00p -0.92%
Scottish Mortgage Inv Trust (SMT) 827.40p -0.86%
Reckitt Benckiser Group (RKT) 4,110.00p -0.72%

FTSE 250 - Risers

International Distributions Services (IDS) 276.00p 28.85%
Ferrexpo (FXPO) 46.25p 4.76%
Watches of Switzerland Group (WOSG) 349.60p 3.49%
Ithaca Energy (ITH) 118.60p 2.77%
PZ Cussons (PZC) 84.90p 2.41%
Quilter (QLT) 102.50p 2.09%
Savills (SVS) 1,052.00p 1.94%
Hilton Food Group (HFG) 896.00p 1.93%
BH Macro Ltd. GBP Shares (BHMG) 345.00p 1.92%
Just Group (JUST) 98.30p 1.87%

FTSE 250 - Fallers

Kainos Group (KNOS) 924.00p -6.38%
Auction Technology Group (ATG) 499.50p -5.04%
Apax Global Alpha Limited (APAX) 139.00p -3.34%
Harbour Energy (HBR) 289.50p -2.82%
Aston Martin Lagonda Global Holdings (AML) 151.00p -2.52%
TBC Bank Group (TBCG) 2,920.00p -2.50%
UK Commercial Property Reit Limited (UKCM) 64.70p -2.41%
Chemring Group (CHG) 346.00p -2.40%
Trainline (TRN) 338.00p -2.26%
TUI AG Reg Shs (DI) (TUI) 563.00p -2.17%