London close: Stocks mixed as US consumer confidence slides

London's financial markets closed with mixed results on Tuesday as investors weighed a fall in consumer confidence in the US, as well as a batch of fresh stimulus measures in China.

The FTSE 100 index rose 0.28% to finish at 8,282.76 points, while the FTSE 250 slipped 0.36% to 20,770.12 points.

In currency markets, sterling was last up 0.25% on the dollar, trading at $1.3380, while it slipped 0.12% against the euro to change hands at €1.1999.

“Another reserve ratio requirement cut by the People's Bank of China (PBoC), with more in the pipeline, provoked a 4% rally in the Shanghai stock index and led to a positive start in the European session,” said Axel Rudolph at IG.

“German Ifo business morale slipping to an eight-month low and US home prices slowing in July put a dampener on proceedings, though.

“Nonetheless the DAX, Dow and S&P 500 remain close to their recent record highs.”

Rudolph added that gold prices were on track for their fourth consecutive day of gains, and could soon reach the $2,650 per troy ounce mark.

“Ongoing supply concerns push the oil price higher by around 1.5%.

“West Texas Intermediate is currently testing a technical resistance zone with the June low thwarting the advance.”

US consumer confidence drops sharply in September

In economic news, consumer confidence in the United States dropped significantly in September, marking the largest decline in over three years.

The Conference Board's consumer confidence index fell to 98.7, down from 105.6 in August, falling below the long-term average and missing economists' expectations of a smaller decline to 104.

That sharp drop was driven by a negative outlook on business conditions, with the present situation index dropping from 134.6 to 124.3, and the expectations index slipping from 86.3 to 81.7.

“Consumer confidence dropped in September to near the bottom of the narrow range that has prevailed over the past two years,” said Conference Board chief economist Dana Peterson.

“Consumers’ assessments of current business conditions turned negative while views of the current labour market situation softened further.

“Consumers were also more pessimistic about future labour market conditions and less positive about future business conditions and future income.”

Meanwhile, US house prices continued to rise in July, although at a slower pace, as the S&P CoreLogic Case-Shiller national home price index showed a 5% year-over-year increase, down from a 5.5% rise in June.

The 10-city composite index, which tracks price movements in the largest US metropolitan areas, grew by 6.8% annually, a slowdown from the previous month’s 7.4% gain.

Despite the deceleration, home prices reached another record high.

“Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index,” said Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices.

“The growth has come at a cost, with all but two markets decelerating last month, eight markets seeing monthly declines, and the slowest annual growth nationally in 2024.

“Overall, the indices continue to grow at a rate that exceeds long-run averages after accounting for inflation.”

On home shores, Bank of England Governor Andrew Bailey indicated that interest rates are likely to stabilise at a “neutral rate” as inflation continues to decrease.

Speaking to KentOnline, Bailey expressed optimism over the recent drop in consumer price inflation to 2.2% in August, down from a peak of 11.1% in late 2022.

While he ruled out a return to the near-zero rates seen during the pandemic, he suggested a gradual decline in rates was expected as inflation pressures eased.

On the continent, business sentiment in Germany worsened more than anticipated in September, according to the Ifo Institute’s latest survey.

The business climate index fell to 85.4 from 86.6 in August, below expectations of 86.1.

Key sectors, including manufacturing and services, showed notable declines, with the manufacturing index hitting its lowest level since June 2020 at -21.6.

The construction index, however, saw a slight improvement.

Overnight, China's central bank introduced a series of measures to support its struggling economy.

The People's Bank of China reduced reserve requirement ratios for banks by 50 basis points and cut a key policy rate to 1.5%.

Additionally, interest rates on existing mortgages would be reduced by 0.5 percentage points on average.

Miners and China-exposed stocks rise on stimulus

On London’s equity markets, heavily-weighted mining stocks were boosted by a surge in commodity prices following China's announcement of new economic stimulus measures.

Anglo American climbed 6.64%, while Antofagasta jumped 6.03%.

Glencore and Rio Tinto also performed strongly, gaining 3.94% and 4.54%, respectively, as copper and iron ore prices rallied.

Financial and consumer stocks with significant exposure to China also advanced.

Prudential increased by 4.52% and Standard Chartered added 3.06%, while Burberry Group - known for its luxury goods - rose 2.14%.

Raspberry Pi Holdings surged 6.61% after reporting better-than-expected interim profits in its first results as a public company.

The maker of low-cost microcomputers posted a 55% increase in adjusted core earnings to $21m, exceeding internal forecasts.

Revenue grew 61% to $144m, while pre-tax profit remained flat at $10.8m.

The company reaffirmed its full-year guidance, anticipating that sales volumes would stabilise towards the end of the year.

On the downside, Smiths Group tumbled 5.22% after its full-year adjusted pre-tax profit fell short of market expectations.

The engineering company also announced the acquisition of two North American firms for a combined £110m to expand its HVAC and Flex-Tek divisions.

Dunelm Group plunged 7.69% following the sale of a 4.9% stake by its largest shareholder, Will Adderley, through his private investment firm WA Capital.

The sale of 10 million shares at 1,140p each was coordinated by Barclays.

AG Barr, the company behind Irn-Bru, declined 8.46% despite reaffirming its full-year outlook and reporting increased interim profit and revenue, along with a higher dividend.

Recruitment firm SThree fell 5.18% after announcing an 8% decrease in third-quarter net fees due to challenging market conditions.

LondonMetric Property dipped 0.58% after appointing Darren Richards, formerly British Land's head of real estate, as its new chief investment officer.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,282.76 0.28%
FTSE 250 (MCX) 20,770.12 -0.36%
techMARK (TASX) 4,784.66 -0.25%

FTSE 100 - Risers

Anglo American (AAL) 2,261.00p 6.64%
Antofagasta (ANTO) 1,940.00p 6.30%
Rio Tinto (RIO) 5,049.00p 4.54%
Prudential (PRU) 664.80p 4.10%
Glencore (GLEN) 399.85p 3.90%
Standard Chartered (STAN) 781.80p 3.22%
InterContinental Hotels Group (IHG) 8,202.00p 2.29%
Lloyds Banking Group (LLOY) 59.28p 2.03%
Smurfit Westrock (DI) (SWR) 3,527.00p 1.64%
NATWEST GROUP (NWG) 341.30p 1.55%

FTSE 100 - Fallers

Smiths Group (SMIN) 1,711.00p -5.99%
Vistry Group (VTY) 1,327.00p -1.85%
Coca-Cola HBC AG (CDI) (CCH) 2,688.00p -1.47%
SEGRO (SGRO) 871.00p -1.31%
Admiral Group (ADM) 2,784.00p -1.31%
London Stock Exchange Group (LSEG) 10,220.00p -1.30%
Unite Group (UTG) 944.50p -1.25%
Berkeley Group Holdings (The) (BKG) 4,823.00p -1.25%
Barratt Developments (BDEV) 494.70p -1.06%
Taylor Wimpey (TW.) 165.35p -1.02%

FTSE 250 - Risers

Dr. Martens (DOCS) 53.65p 6.03%
Raspberry PI Holdings (RPI) 367.70p 5.60%
Fidelity China Special Situations (FCSS) 189.00p 4.78%
BlackRock World Mining Trust (BRWM) 530.00p 3.92%
Man Group (EMG) 216.60p 3.74%
Close Brothers Group (CBG) 419.20p 3.71%
Ocado Group (OCDO) 357.20p 3.15%
Domino's Pizza Group (DOM) 303.00p 2.71%
Renishaw (RSW) 3,500.00p 2.34%
Templeton Emerging Markets Inv Trust (TEM) 162.20p 2.27%

FTSE 250 - Fallers

Barr (A.G.) (BAG) 606.00p -8.46%
Dunelm Group (DNLM) 1,157.00p -6.32%
SThree (STEM) 375.00p -5.18%
Trustpilot Group (TRST) 220.50p -3.08%
Plus500 Ltd (DI) (PLUS) 2,482.00p -2.82%
Keller Group (KLR) 1,604.00p -2.67%
Oxford Instruments (OXIG) 2,040.00p -2.63%
Drax Group (DRX) 613.00p -2.62%
Safestore Holdings (SAFE) 886.00p -2.53%
3i Infrastructure (3IN) 332.00p -2.50%