London close: Stocks mixed as investors look to Jackson Hole

London's stock markets closed on a mixed note Thursday, as traders remained cautious ahead of a speech from Federal Reserve chair Jerome Powell.

The FTSE 100 index edged up by 0.06%, ending the day at 8,288.00 points, while the more domestically-focussed FTSE 250 index declined 0.39%, closing at 21,104.70 points.

In currency markets, sterling was last down 0.01% on the dollar to trade at $1.3090, while it gained 0.32% against the euro, changing hands at €1.1778.

“The near-1.5% rally in the Japanese Nikkei 225 hasn't been replicated by any US, nor European equity indices which continue to trade in low volume and volatility ahead of Fed chair Powell's speech at the Jackson Hole symposium on Friday,” said IG senior technical analyst Axel Rudolph.

“The ECB leaving rates on hold didn't surprise anyone and US jobless claims rising more than expected, existing home sales rebounding and private sector growth slowing less than expected had little impact, nor did UK factory orders which fell less than expected.”

Rudolph added that a rebound in the dollar from levels last traded in January put pressure on commodities.

“Gold, silver and copper prices dropped by over a percent while the price of steel fell by around 3.5% and that of wheat by close to 7%.

“On the flip side, the price of oil stabilised and rose by around 1% as some investors squared their positions around the early August lows.”

UK private sector activity hits four-month high, US jobless claims rise

In economic news, activity in the UK’s private sector reached a four-month high in August, according to data released earlier.

The S&P Global flash PMI composite output index rose to 53.4, up from 52.8 in July, surpassing market expectations of 52.9.

A PMI reading above 50 signals expansion, with August’s figure reflecting a stronger performance in both manufacturing and services sectors.

The services PMI also climbed to 53.3, marking its highest level in four months, up from 52.5 in July.

“August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation, according to provisional PMI survey data,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

“Both manufacturing and service sectors are reporting solid output growth and increased job gains as business confidence remains elevated by historical standards.

“Although GDP growth looks set to weaken in the third quarter compared to the impressive gains seen in the first half of the year, the PMI is indicative of the economy expanding at a reasonably solid quarterly rate of around 0.3%.”

In the eurozone, economic activity unexpectedly strengthened in August, buoyed by the ongoing impact of the Olympics.

The Hamburg Commercial Bank eurozone composite PMI, covering both manufacturing and services, increased from 50.2 in July to 51.2.

That improvement was largely driven by the services sector, which saw its PMI rise from 51.9 to 53.3.

However, the manufacturing sector continued to struggle, with its PMI slightly declining from 45.8 to 45.6, signalling ongoing contraction.

While input cost inflation eased to an eight-month low, selling prices surged at their fastest rate in four months, highlighting persistent pricing pressures.

Across the Atlantic, the US labour market showed signs of softening as unemployment claims rose slightly.

The Labor Department reported that initial jobless claims increased by 4,000 to 232,000 in the week ended 17 August, reaching a three-week high.

That uptick was slightly above market expectations and aligned with recent data indicating a cooling labour market.

Continuing claims also edged up by 4,000 to 1.86 million, while the four-week moving average of initial claims, which smooths out volatility, fell slightly to 236,000.

JD Sports jumps, ex-dividend stocks prove a drag

On London’s equity markets, JD Sports Fashion surged by 10.69%, after reporting a return to like-for-like growth in its second quarter.

The company credited its store expansion in North America and Europe for the boost, despite continued sluggishness in the UK market.

Like-for-like sales increased by 2.4% year-on-year for the three months ended 3 August, following a 0.7% decline in the first quarter.

JD Sports maintained its profit guidance for the full year but noted a cautious outlook.

Frasers Group, the owner of Sports Direct, also saw a positive move, with shares rising 1.9%.

Elsewhere, Serco Group edged up 1.01% after securing a $320m contract with the US Army Corps of Engineers to modernise the backup electrical plant at the US Space Force's Pituffik Space Base in Greenland.

United Utilities gained 0.95% following an upgrade to ‘buy’ from ‘neutral’ by UBS.

Hays reversed earlier losses to close up 2.53%, despite reporting a 92% drop in full-year pre-tax profit, as the recruiter noted a "clear slowdown" in challenging markets.

On the downside, several companies traded without entitlement to dividends, leading to declines.

Legal & General Group fell 2.38%, while Mondi, Schroders, Land Securities Group, and Imperial Brands also saw losses ranging from 0.51% to 1.68%.

Ithaca Energy dropped 5.5% after reporting a decrease in first-half profit.

Meanwhile, Diversified Energy Company saw its shares fall by 5.79%, extending losses from earlier in the week following the announcement of a $68 million acquisition of assets in East Texas.

Despite the strategic expansion, investor sentiment remained subdued, with shares down nearly 7% since the deal was announced.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,288.00 0.06%
FTSE 250 (MCX) 21,104.70 -0.39%
techMARK (TASX) 4,860.81 -0.16%

FTSE 100 - Risers

JD Sports Fashion (JD.) 141.85p 10.69%
Frasers Group (FRAS) 864.00p 2.37%
Tesco (TSCO) 346.60p 2.00%
CRH (CDI) (CRH) 6,722.00p 1.76%
Admiral Group (ADM) 2,951.00p 1.65%
Associated British Foods (ABF) 2,483.00p 1.64%
Standard Chartered (STAN) 756.00p 1.53%
easyJet (EZJ) 445.50p 1.48%
International Consolidated Airlines Group SA (CDI) (IAG) 176.35p 1.35%
Marks & Spencer Group (MKS) 332.60p 1.34%

FTSE 100 - Fallers

Legal & General Group (LGEN) 224.50p -2.81%
Anglo American (AAL) 2,223.50p -2.37%
Aviva (AV.) 491.50p -2.05%
Glencore (GLEN) 405.30p -1.94%
Mondi (MNDI) 1,448.50p -1.66%
Schroders (SDR) 341.00p -1.62%
Fresnillo (FRES) 542.00p -1.45%
Berkeley Group Holdings (The) (BKG) 5,145.00p -1.44%
Antofagasta (ANTO) 1,829.00p -1.08%
Rio Tinto (RIO) 4,784.00p -1.07%

FTSE 250 - Risers

North Atlantic Smaller Companies Inv Trust (NAS) 4,200.00p 2.94%
Hays (HAS) 97.40p 2.53%
Derwent London (DLN) 2,378.00p 2.24%
Helios Towers (HTWS) 123.00p 1.82%
Cranswick (CWK) 4,745.00p 1.71%
Wizz Air Holdings (WIZZ) 1,284.00p 1.66%
Pets at Home Group (PETS) 308.80p 1.58%
Grafton Group Ut (CDI) (GFTU) 1,051.80p 1.51%
Direct Line Insurance Group (DLG) 189.00p 1.50%
Carnival (CCL) 1,081.50p 1.31%

FTSE 250 - Fallers

Diversified Energy Company (DEC) 935.50p -5.79%
Ithaca Energy (ITH) 123.80p -5.50%
Investec (INVP) 554.50p -5.46%
XPS Pensions Group (XPS) 305.00p -4.69%
Alpha Group International (ALPH) 2,495.00p -4.04%
OSB Group (OSB) 384.80p -3.80%
Clarkson (CKN) 3,835.00p -3.52%
Baltic Classifieds Group (BCG) 262.00p -3.50%
TP Icap Group (TCAP) 236.00p -3.48%
Auction Technology Group (ATG) 420.00p -3.23%