London close: Stocks mixed as debt ceiling remains in focus

Trading in London closed with mixed performance on Friday as investors monitored negotiations between congressional Republicans and the White House to avert a potential US federal debt default.

The FTSE 100 edged up 0.19% to 7,756.87, while the FTSE 250 slipped by a slight 0.05%, ending the day at 19,289.10.

On the currency front, sterling was last 0.45% stronger on the dollar to trade at $1.2465, as it managed gains of 0.01% against the euro to change hands at €1.1522.

“Markets in Europe have seen another day of strong gains after the Nikkei 225 closed at its highest levels since 1990 and finished the week higher by 4.8%,” said CMC Markets chief market analyst Michael Hewson.

“This momentum translated into the European session, with the German DAX taking up the challenge and posting a new record high above 16,300, with the gains being driven by optimism that markets would have one less thing to worry about next week, with respect to a successful resolution of US debt ceiling negotiations.”

The FTSE 100 has once again been the laggard with weakness in the retail and construction sector acting as a drag today, with JD Sports getting a bit of a shoeing after a profits warning from its US peer Foot Locker.”

UK government to invest in semiconductor sector

In economic news, the Department for Science, Innovation and Technology - a newly-established branch of the UK government - revealed plans for a significant investment in the British semiconductor sector.

The initiative, part of the much-anticipated National Semiconductor Strategy, aimed to bolster the domestic industry by enhancing industry access to infrastructure, funding research and development projects, and fostering international collaboration.

Its initial investment instalment, totalling £200m, would be distributed over the upcoming two years.

“Semiconductors underpin the devices we use every day, and will be crucial to advancing the technologies of tomorrow,” said prime minister Rishi Sunak, currently in Japan for a G7 summit.

“Our new strategy focuses our efforts on where our strengths lie, in areas like research and design, so we can build our competitive edge on the global stage.

“By increasing the capabilities and resilience of our world-leading semiconductor industry, we will grow our economy.”

On the continent, German producer prices recorded their smallest year-on-year growth in over two years in April, as per data published on Friday.

The country's federal statistics agency, Destatis, reported that the prices of industrial products for the domestic market registered a 4.1% year-on-year growth in April.

That increase, the lowest since the 5.2% rise in April 2021, slightly exceeded economists' forecasted annual growth of 4%.

Across the pond, US Federal Reserve chair Jerome Powell suggested a potential halt in interest rate hikes during the bank's next policy review.

Speaking at a monetary policy panel in Washington, Powell noted that service sector inflation remained considerably above the central bank's 2.0% target.

However, recent events in the banking sector could potentially reduce the necessity for higher policy rates to meet the Fed's objectives.

Powell underscored, though, the uncertain impact of these developments.

St James’s Place rises on upgrade, C&C Group slides

On London’s equity markets, St James's Place increased 1.78% following an upgrade from 'sector perform' to 'outperform' by RBC Capital Markets.

The firm praised STJ for having the most robust distribution model in UK wealth and noted that after a de-rating, the shares now represent significant value.

Telecommunications giant BT Group saw its shares rise by 3.02%, after a sharp decline on Thursday, when the company announced plans to slash 55,000 jobs.

Smiths Group ticked up 0.38%, after the firm raised its revenue guidance due to a strong third quarter fuelled by volume and price growth.

On the downside, drinks company C&C Group witnessed a considerable 14.82% drop in its share prices, after it announced CEO David Forde's departure and a €25m loss due to issues with a system upgrade in its Matthew Clark and Bibendum (MCB) business in the UK.

The Bulmers and Magners owner said it had "encountered significant challenges" in the system changes at MCB.

"The implementation process has taken longer and been significantly more challenging and disruptive than originally envisaged, with a consequent material impact on service and profitability within MCB," it added.

JD Sports Fashion experienced a 7.76% decrease on the back of a downgrade in full-year guidance by its American competitor Foot Locker.

Finally, budget airlines Wizz Air and easyJet saw their shares dip by 5.36% and 4.92% respectively, as oil prices climbed above $76.

Reporting by Josh White for Sharecast.com.

FTSE 100 +1.57 (+0.19%) 7,856.87

RISERS
BT Group +3.02% 144.95p
Scottish Mortgage Investment Trust +2.02% 647.8p
Flutter Entertainment +1.99% 16,400p
St James’s Place +1.78% 1,145p
SSE +1.69% 1,868p
Hargreaves Lansdown +1.55% 811.8p
British Land Company +1.48% 356.2p
Hiscox +1.39% 1,167p
Unite Group +1.39% 912.5p
Beazley +1.24% 614p

FALLERS
JD Sports Fashion -7.76% 159.25p
Burberry Group -4.14% 2,290p
Persimmon -2.68% 1,307p
Berkeley Group Holdings -2.4% 4,234p
International Consolidated Airlines Group -1.93% 157.25p
Taylor Wimpey -1.86% 123.95p
B&M European Value Retail -1.58% 485.7p
Kingfisher -1.52% 240.5p
Next -1.49% 6,594p
Barratt Developments -1.42% 499.2p

FTSE 250 -9.15 (-0.05%) 19,289.10

RISERS
Dowlais Group +6.19% 139p
Videndum +4.05% 720p
Man Group +3.47% 217.9p
Renishaw +3.01% 3,898p
Softcat +2.93% 1,369p
Aston Martin Lagonda Global Holdings +2.85% 267.4p
Genus +2.44% 2,518p
FDM Group Holdings +2.43% 675p
Vesuvius +2.39% 420.6p
Indivior +2.29% 1,519p

FALLERS
C&C Group -14.82% 131p
Wizz Air Holdings -5.36% 2,946p
easyJet -4.92% 502p
Watches of Switzerland Group -4.69% 661p
Energean -3.69% 1,096p
Genuit Group -3.69% 326.5p
JD Wetherspoon -3.6% 736.5p
Vistry Group -2.88% 826.5p
Vanquis Banking Group -2.61% 224p
SSP Group -2.24% 261.6p