London close: Stocks mixed on quiet day as focus turns to US

Stocks in London ended mixed on Monday, although movements were minor as investor attention was largely drawn to ongoing negotiations over the US federal debt ceiling.

The FTSE 100 closed up 0.18% at 7,770.99, while the FTSE 250 slipped 0.08% to end the session at 19,273.34.

Across the pond, the state of negotiations between congressional Republicans and the White House over the US debt ceiling were restarting, with the situation remaining murky at the end of last week.

Lawmakers were working to avoid a potential government debt default, although differences remained over the scale of potential funding cuts.

On the currency front, sterling was last down 0.17% on the dollar to trade at $1.2424, while it weakened 0.18% against the euro to change hands at €1.1497.

“It’s been a fairly quiet, if slightly negative session for European equity markets today, with the FTSE 100 modestly outperforming, as markets tread water ahead of the resumption of debt ceiling talks later this evening,” said CMC Markets chief market analyst Michael Hewson.

“We’re seeing modest weakness in telecoms and energy being offset by a firmer performance from banks and the consumer discretionary sector.”

House prices reach fresh peak, China stands pat on lending rates

In economic news, UK housing prices reached a record peak in May according to fresh industry data.

Steady market conditions saw the average asking price for properties rise 1.8% according to Rightmove, making for the most significant increase so far this year.

In contrast, the increase recorded for the same period last year was 1%.

This positive trend was a stark contrast to April's modest 0.2% increase.

As a result, the new average asking price for a property being listed was £372,894, reflecting a 1.5% year-on-year increase.

Rightmove said sellers were showing increasing confidence in the market as it recovered from the adverse effects of last autumn's mini budget.

Buyer demand was also 3% higher than in May 2019, before the Covid-19 pandemic, although the number of agreed sales was still slightly behind, standing 3% lower.

“This month’s strong jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season,” said Tim Bannister, director of property science at Rightmove.

“One reason for this increased confidence may be that the gloomy start-of-the-year predictions for the market are looking increasingly unlikely - more likely the market will continue to transition to a more normal activity level this year following the exceptional activity of the pandemic years.

“Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence.”

On the continent, the construction sector in the eurozone experienced a setback in March, with a 2.4% month-on-month decrease in output.

That followed a revised 1.7% boost in February, according official data from the European Union.

Specifically, there were declines of 2.4% in building activity, and 2.3% in civil engineering.

“Overall, the setback in March is consistent with leading indicators, but it doesn’t change the picture of a solid quarter overall,” noted analysts at Pantheon Macroeconomics.

“Output jumped by 2.5% quarter-on-quarter in the first quarter, accelerating from a 0.4% increase in the fourth.”

Finally in economic headlines, China left its lending rates unchanged for the ninth consecutive month, in line with expectations.

The one-year loan prime rate (LPR) was held steady at 3.65%, while the five-year rate was left at 4.30%.

Commercial one and five-year loan prime rates were also kept unchanged, aligning with the central bank's decision.

Kainos jumps on strong full-year numbers, Dechra tumbles after profit warning

On London’s equity markets, Standard Chartered closed up 3.03%, while Burberry Group followed with a 1.79% increase.

NatWest Group enjoyed a 1.19% increase after the UK government announced it had reduced its stake in the bank to 38.6%, via a £1.26bn off-market buyback deal.

BT Group climbed 2% after Citi reaffirmed its ‘buy’ rating on the shares, landing them on its ‘European Focus List’.

Meanwhile, software company Kainos Group saw a significant boost of 6.13% following reports of an increase in full-year profit and revenue, backed by "robust" underlying demand.

IAG, the owner of British Airways and Iberia, was in the green with a 0.92% rise after Ryanair reported a near-record annual profit due to a "strong" post-Covid recovery.

On the downside, Dechra Pharmaceuticals tumbled 13.04% after it warned that its full-year underlying operating profit would fall below the guidance of £186m, due to destocking in the US and UK.

Frasers Group also found itself on the downside with a 2.22% decrease, amid reports that Mike Ashley’s retail empire was in advanced talks to acquire cycling goods specialist ProBikeKit.

According to Sky News, Frasers was nearing a deal to purchase the stock and intellectual property assets of PBK from online nutrition and beauty retailer THG.

City sources suggested the deal could be finalised and announced later this week.

Reporting by Josh White for Sharecast.com.

FTSE 100 +14.12 (+0.18%) 7,770.99

RISERS
Standard Chartered +3.03% 653.2p
Admiral Group +2.53% 2,306p
Ocado Group +2.39% 403.4p
BT Group +2% 147.85p
Flutter Entertainment +1.98% 16,725p
Burberry Group +1.79% 2,331p
Aviva +1.21% 418.5p
NatWest Group +1.19% 271.6p
Scottish Mortgage Investment Trust +1.14% 655.2p
Rightmove +1.12% 559.6p

FALLERS
Frasers Group -2.22% 748.5p
ConvaTec Group -1.77% 222.2p
Vodafone Group -1.72% 81.65p
Halma -1.72% 2,455p
Smiths Group -1.49% 1,685.5p
Unilever -0.98% 4,229p
J Sainsbury -0.93% 278.4p
Fresnillo -0.81% 659.4p
F&C Investment Trust -0.78% 896p
Melrose Industries -0.74% 480.5p

FTSE 250 -15.75 (-0.08%) 19,273.34

RISERS
Molten Ventures +6.13% 287.4p
Kainos Group +6.13% 1,299p
Watches of Switzerland Group +4.31% 689.5p
4imprint Group +3.83% 4,880p
Diversified Energy Company +3.83% 96.35p
Man Group +3.26% 225p
Dowlais Group +3.24% 143.5p
IntegraFin Holdings +3.13% 289.8p
Intermediate Capital Group +3.06% 1,365.5p
Ninety One Group +3.05% 165.5p

FALLERS
Dechra Pharmaceuticals -13.04% 3,174p
Chemring Group -3.19% 273p
Coats Group -3.06% 69.8p
Bakkavor Group -2.74% 92.4p
Future -2.73% 871.5p
SThree -2.61% 392p
Telecom Plus -2.53% 1,698p
Dr. Martens -2.46% 166.3p
TBC Bank Group -2.41% 2,430p
Liontrust Asset Management -2.39% 796.5p