London close: Stocks mixed as investors look to US events

London markets closed with a mixed performance on Monday, as investors awaited key events stateside later in the week.

The FTSE 100 index ended the day down by 0.22%, closing at 7,929.79, while the FTSE 250 showed positive signs, rising by 0.69% to close at 20,064.11.

Sterling made gains against the US dollar, rising by 0.07% to last trade at $1.2044, while it faced setbacks against the euro, falling 0.56% to €1.1264.

Investors were keenly watching for updates from US Federal Reserve chair Jerome Powell, who is set to deliver a speech later this week, as well as the US non-farm payrolls data.

“The UK economy received a welcome boost today, with the construction PMI highlighting an unexpected rebound in the construction sector last month,” said IG senior market analyst Joshua Mahony.

“Notably, it was commercial work that picked up the slack, with housebuilding activity falling for the third straight month.

“However, it was the UK’s reliance on mining stocks which appears to be the FTSE 100’s undoing today, with a disappointing Chinese growth forecast dampening demand for commodity names.”

In economic news, business activity in the UK construction sector surged last month, beating expectations and providing a much-needed boost.

The S&P Global/CIPS UK construction purchasing managers’ index (PMI) came in at 54.6 in February, up significantly on January's figure of 48.4 and well above analyst forecasts of 48.6.

It was the highest reading for the index since May 2022 and the first time it had risen above the neutral 50-point mark in three months.

A reading below 50 indicates contraction, while a reading above 50 suggests growth.

The rebound in commercial work, with a reading of 55.3, and a positive contribution from civil engineering, at 52.3, were driving factors behind the growth.

“The overall figure paints a bright picture of progress in the construction sector, with a robust jump in output,” said John Glen, chief economist at the Chartered Institute of Procurement & Supply.

“Supply deliveries were at their most improved since January 2020, and some commentators mentioned sourcing close to home to avoid logjams in supply chains caused by China’s [zero] Covid policy and the war in Ukraine.”

Elsewhere, new car registrations rose 26.2% to 74,441 in February, according to data from the Society of Motor Manufacturers and Traders (SMMT).

The rise came despite the cost of living crisis weighing on British households, as almost all areas of the market saw growth, with deliveries to private buyers up 5.8% and those to large fleets up 46.2%.

Business registrations, which make up a fraction of the market, rose 0.7%, equivalent to just nine units.

There was growth in all but two segments, with only registrations of executive and luxury saloon cars falling, by 15.4% and 6.3%, respectively.

“After seven months of growth, it is no surprise that the UK automotive sector is facing the future with growing confidence,” said SMMT chief executive Mike Hawes.

“It is vital, however, that the government takes every opportunity to back the market, which plays a significant role in Britain's economy and net zero ambition.

“As we move into 'new plate month' in March, with more of the latest high-tech cars available, the upcoming Budget must deliver measures that drive this transition, increasing affordability and ease of charging for all.”

On the continent, fresh data showed that the downturn in the eurozone construction sector eased somewhat in February.

The S&P Global construction total activity index for the bloc rose to 47.6 from 46.1 in January, but remained below the 50.0 mark that separates contraction from expansion for the 10th consecutive month.

S&P said the improvement was due to softer declines in both residential and civil engineering activity, although commercial construction projects decreased at a slightly faster pace.

However, investor sentiment in the euro area unexpectedly deteriorated in March, according to data also released earlier.

The Sentix investor sentiment index for the bloc fell to -11.1 from -8.0 in February, coming in below consensus expectations of -6.3.

Sentix said the current situation index rose to -9.3 in March from -10.0 the previous month, while the expectations gauge declined to -13.0 from -6.0.

In another disappointing sign for the eurozone, retail sales across the bloc increased at a slower than expected rate in January, with household budgets continuing to be strained by high inflation and rising interest rates.

Retail sales rose by just 0.3% in January, below the 0.5% increase forecast by economists.

On an annual basis, retail sales were down 2.3%, and the rise did little to reverse the 1.7% fall seen in December.

Food, drinks, and tobacco combined for a 1.8% month-on-month increase in January, but that was not enough to offset declines in other areas.

Finally on the economic front, China revealed it was aiming for economic growth of just 5% this year - its lowest target for decades - as the country looked to restore economic stability.

The target was below last year's goal for 5.5% GDP growth, and at the lower end of analyst expectations, but it was above the 3% growth actually achieved in 2022.

Outgoing premier Li Keqiang told the National People's Congress on Sunday that the aim this year was to "prioritise economic stability".

On London’s equity markets, there were significant losses among mining stocks on the back of China’s growth target announcement.

Anglo American was down 3.65%, Rio Tinto Group lost 2.8%, Antofagasta was off 1.53%, and Glencore was 3.92% weaker.

“It’s clear that a return to stability is Beijing’s main aim, rather than big expansionary plans, after the painful past few years,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“The 5% target for growth announced at the National People’s Congress was not as high as had been hoped, particularly given the recent resurgence in factory activity and business confidence, indicating there is reticence towards signing off any blockbuster stimulus plans any time soon.

“This will nudge down hopes that China could provide the extra steam to offset declines in other major economies, prompted by efforts to rein in rampant inflation.”

On the upside, Aston Martin Lagonda surged 15.04%, with traders attributing the rise to a good performance in Formula 1.

The shares also got a boost from a target price upgrade at Jefferies.

Elsewhere, shipping services company Clarkson added 1.82% after reporting a sharp rise in annual earnings, driven by a strong performance in its broking division.

In broker action, B&Q owner Kingfisher was up 1.33% and Tesco rallied 1.4% after upgrades to "buy" from "hold" at Jefferies, while B&M European Value Retail was 1.25% higher after an upgrade to "outperform" from "sector perform" at RBC Capital Markets.

Retailer Next was also ahead 2.58% after Jefferies hiked its price target on the shares to 7,500p from 5,700p.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,929.79 -0.22%
FTSE 250 (MCX) 20,064.11 0.69%
techMARK (TASX) 4,682.24 0.83%

FTSE 100 - Risers

Flutter Entertainment (CDI) (FLTR) 13,975.00p 4.60%
Land Securities Group (LAND) 683.60p 3.36%
Airtel Africa (AAF) 125.20p 2.96%
BT Group (BT.A) 148.75p 2.69%
Next (NXT) 7,076.00p 2.58%
Rightmove (RMV) 570.00p 2.19%
British Land Company (BLND) 453.60p 2.14%
Rolls-Royce Holdings (RR.) 152.78p 2.10%
Abrdn (ABDN) 236.10p 1.72%
Melrose Industries (MRO) 156.90p 1.52%

FTSE 100 - Fallers

Beazley (BEZ) 609.00p -5.05%
Glencore (GLEN) 502.50p -3.92%
Ocado Group (OCDO) 529.80p -3.71%
Anglo American (AAL) 2,931.50p -3.65%
Rio Tinto (RIO) 5,972.00p -2.80%
Pearson (PSON) 863.40p -2.77%
Hiscox Limited (DI) (HSX) 1,067.50p -2.69%
Fresnillo (FRES) 760.40p -1.93%
Endeavour Mining (EDV) 1,743.00p -1.80%
Mondi (MNDI) 1,398.00p -1.58%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 276.10p 15.04%
Moonpig Group (MOON) 127.80p 7.25%
Wizz Air Holdings (WIZZ) 3,030.00p 5.76%
Capital & Counties Properties (CAPC) 131.30p 5.46%
Wetherspoon (J.D.) (JDW) 590.50p 4.70%
TUI AG Reg Shs (DI) (TUI) 1,636.00p 3.84%
Renishaw (RSW) 4,200.00p 3.45%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 150.60p 3.15%
Intermediate Capital Group (ICP) 1,443.00p 3.11%
Mitchells & Butlers (MAB) 162.10p 3.05%

FTSE 250 - Fallers

Genuit Group (GEN) 295.00p -4.53%
Marshalls (MSLH) 320.40p -3.73%
Diversified Energy Company (DEC) 99.65p -3.25%
4Imprint Group (FOUR) 4,615.00p -2.94%
Lancashire Holdings Limited (LRE) 580.00p -2.85%
Abrdn Private Equity Opportunities Trust (APEO) 441.00p -2.20%
Syncona Limited NPV (SYNC) 160.80p -2.19%
IP Group (IPO) 63.00p -2.10%
Elementis (ELM) 126.10p -2.02%
Synthomer (SYNT) 147.10p -1.87%