London close: Stocks mixed as investors watch Middle East newsflow

London's stock markets closed in a mixed state on Friday as traders kept a close watch on escalating tensions in the Middle East.

The FTSE 100 index edged up 0.24%, closing at 7,895.85 points, while the FTSE 250, slipped 0.31% to settle at 19,391.30 points.

Market participants were monitoring geopolitical developments, after reports of an Israeli strike on a target in Iran's central province of Isfahan, where key nuclear installations are located.

The strike was seen as a response to Iran's earlier attack involving over 300 drones and missiles targeting an Israeli air force base.

In currency markets, sterling was last down 0.47% on the dollar, trading at $1.2378, while it weakened 0.46% against the euro to change hands at €1.1631.

“Disappointing US earnings, hawkish Fed remarks and a retaliatory Israel missile strike on Iran led to a third straight weekly loss for most stock indices,” said IG senior market analyst Axel Rudolph.

“Unexpected flat UK retail sales, German producer prices falling the least in eight months and comments by Bank of England and Fed speakers took second stage as investors were preoccupied with the situation in the Middle East.

“Even though de-escalating remarks by Tehran led to a recovery rally in stocks, these were mixed by close of business Friday.”

Rudolph noted that on Friday morning, gold prices rallied to within $15 of last week's record high on flight-to-safety flows, whole oil prices surged more than 4% on supply worries.

“By late afternoon the oil price had given back most of its intraday gains while the gold price traded slightly higher as investors interpret Iran's cool headedness as a sign of de-escalation in the region.”

Retail sales unexpectedly flat in March, consumer confidence improves

In economic news, UK retail sales remained flat in March according to fresh data from the Office for National Statistics, falling short of expectations.

Sales showed no change compared to the prior month, following a modest 0.1% increase in February, and against forecasts of a 0.3% uptick.

While automotive fuel and non-food stores experienced growth in sales volumes by 3.2% and 0.5% respectively, that was offset by declines in food stores and non-store retailers, which saw decreases of 0.7% and 1.5% respectively.

On an annual basis, retail sales saw a modest rise of 0.8% in March, below expectations for a 1% increase, leaving sales still 1.2% below their pre-pandemic levels in February 2020.

However, there was a more positive note in the three months leading to March, with sales volumes increasing by 1.9% compared to the previous quarter.

“Retail sales registered no growth in March; hardware stores, furniture shops, petrol stations and clothing stores all reported a rise in sales,” said ONS senior statistician Heather Bovill.

“However, these gains were offset by falling food sales and in department stores where retailers say higher prices hit trading

“Looking at the longer-term picture, across the latest three months retail sales increased after a poor Christmas.”

In contrast, consumer confidence in the UK reached its highest level in two years during the first quarter of the year, as inflation showed signs of easing.

According to a survey released by Deloitte, the Deloitte Consumer Tracker rose by 6.5 percentage points compared to the same period a year earlier.

That marked the sixth consecutive increase and positions the measure at its most optimistic level since the third quarter of 2021.

The tracker, which gathered responses from 3,198 UK consumers aged 18 and above surveyed between 15 and 18 March, indicated a growing sense of optimism among consumers amidst improving economic conditions.

“It is encouraging to see that consumers are feeling more confident in their personal finances - particularly younger consumers,” said Céline Fenech, consumer insight lead at Deloitte.

“Many consumers are paying less for essentials such as utility bills and groceries as inflation falls.

“However, spending on non-essential goods and services dropped this quarter, meaning that improving confidence is not yet translating to a significant boost to spending, and cautious optimism is required.”

Meanwhile, in Germany, industrial producer prices declined 2.9% in March compared to the prior year, largely due to lower energy prices.

Destatis reported a modest 0.2% increase in prices compared to February.

Energy prices notably fell by 7% annually and remained unchanged compared to February 2024.

Gas prices saw a significant decline of 15.4% year on year, while electricity costs decreased by 12.6% over the same period across all customer groups.

Man Group drops on net outflows, utilities in the green

On London’s equity markets, investment management firm Man Group dropped 6.55% following unexpected net outflows during the first quarter.

Despite a 5% increase in assets under management from the prior three months, driven by a positive swing in investment performance, net outflows totaling $1.6bn caught investors off guard.

The figure contrasted sharply with consensus forecasts, which had anticipated positive net flows of $1.3bn.

In the retail sector, several companies saw declines in their share prices, reflecting disappointment over the flat UK retail sales data.

JD Sports Fashion, Marks and Spencer Group, B&M European Value Retail, and J Sainsbury were among the fallers, facing drops ranging from 1.45% to 2.78%.

Travel and airline stocks experienced mixed fortunes following a volatile period in oil prices.

IAG and Carnival faced declines of 1.07% and 1.01% respectively, while Wizz Air Holdings and easyJet saw gains of 1.32% and 0.98%.

On the upside, utility stocks emerged as some of the day's positive performers, benefiting from a shift towards defensive sectors amidst market uncertainties.

United Utilities Group, National Grid, and Severn Trent all posted gains, rising by 1.52%, 0.97%, and 1.45% respectively.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,895.85 0.24%
FTSE 250 (MCX) 19,391.30 -0.31%
techMARK (TASX) 4,400.73 0.26%

FTSE 100 - Risers

Mondi (MNDI) 1,504.50p 9.30%
Rentokil Initial (RTO) 422.70p 2.37%
Coca-Cola HBC AG (CDI) (CCH) 2,456.00p 1.91%
Entain (ENT) 833.60p 1.60%
Compass Group (CPG) 2,200.00p 1.57%
United Utilities Group (UU.) 1,034.00p 1.52%
Imperial Brands (IMB) 1,774.00p 1.46%
Severn Trent (SVT) 2,446.00p 1.45%
Haleon (HLN) 325.80p 1.43%
St James's Place (STJ) 423.00p 1.29%

FTSE 100 - Fallers

Smith (DS) (SMDS) 358.60p -10.26%
JD Sports Fashion (JD.) 116.95p -2.78%
B&M European Value Retail S.A. (DI) (BME) 510.80p -1.85%
Marks & Spencer Group (MKS) 245.80p -1.76%
Rolls-Royce Holdings (RR.) 395.50p -1.74%
Scottish Mortgage Inv Trust (SMT) 810.00p -1.72%
Berkeley Group Holdings (The) (BKG) 4,556.00p -1.69%
Pershing Square Holdings Ltd NPV (PSH) 3,812.00p -1.60%
RS Group (RS1) 690.50p -1.50%
Sainsbury (J) (SBRY) 258.80p -1.45%

FTSE 250 - Risers

Darktrace (DARK) 473.30p 3.88%
Energean (ENOG) 1,019.00p 3.87%
Close Brothers Group (CBG) 452.00p 3.09%
Ashmore Group (ASHM) 184.80p 2.44%
Hochschild Mining (HOC) 154.60p 2.38%
PZ Cussons (PZC) 90.30p 2.38%
Endeavour Mining (EDV) 1,767.00p 2.26%
FirstGroup (FGP) 169.30p 2.23%
Johnson Matthey (JMAT) 1,785.00p 2.00%
Greencoat UK Wind (UKW) 138.70p 1.99%

FTSE 250 - Fallers

Man Group (EMG) 251.00p -6.55%
Marshalls (MSLH) 257.50p -4.10%
Foresight Group Holdings Limited NPV (FSG) 445.00p -3.93%
Dr. Martens (DOCS) 67.30p -3.65%
Allianz Technology Trust (ATT) 329.00p -3.10%
IntegraFin Holding (IHP) 287.00p -3.04%
Genuit Group (GEN) 420.00p -3.00%
Currys (CURY) 61.65p -2.84%
W.A.G Payment Solutions (WPS) 67.00p -2.74%
Trustpilot Group (TRST) 184.00p -2.65%