London close: Stocks mixed on US payrolls, UK house price data

London’s stock markets experienced a mixed performance on Friday with concerns over impending interest rate hikes, the latest US non-farm payrolls report, and fresh UK house price data all influencing movements.

The FTSE 100 index fell 0.32% to close at 7,256.94, while the FTSE 250 climbed 0.49% to end the day at 18,003.97.

On the currency front, sterling was last up 0.75% on the dollar, trading at $1.2836, while it managed gains of 0.05% against the euro to change hands at €1.1705.

Axel Rudolph, senior market analyst at IG, said European indices managed to regain some of Thursday's sharp losses amid weaker-than-expected nonfarm payrolls data, while US stocks were mixed.

“US stock indices only saw a short-lived bounce as the US added 209,000 jobs, less than an expected 225,000, in June following a downwardly-revised 306,000 in May,” he said.

“The reading gives the Fed some breathing space with regards to future rate hikes.

“Nonetheless, according to the CME Fed Watch tool, 92% of participants expect to see another 25-basis point rate high at the 26 July monetary meeting.”

UK house prices record steep annual fall; US jobs market sees reduced tightness

In economic news, the UK housing market experienced a severe contraction with prices falling by 2.6% in June, succeeding a 1.1% drop in May, according to data from lender Halifax.

It constituted the most significant decline in a dozen years, pushing the average cost of a UK home to £285,932, down from a pinnacle of £293,992 in August of the previous year.

On a monthly basis, June saw a modest 0.1% decrease in prices, slightly below the 0.2% fall registered in May.

“Concerns about persistent inflation have led to a significant increase in the cost of funding,” said Kim Kinnaird, director at Halifax Mortgages.

“Coupled with base rate rising by another 50bp, this contributed to a big jump in typical mortgage rates over the last month.

“The resulting squeeze on affordability will inevitably act as a brake on demand, as buyers consider what they can realistically afford to offer.”

Across the pond, the US Department of Commerce reported an employment increment of 209,000 individuals, on a seasonally adjusted basis, marking a significant decrease in hiring intensity.

It was the smallest monthly increase in employment since December 2020.

The figure, though higher than economists' projection of 200,000, reflected an easing in the US job market's tightness.

OSB Group plunges amid interest rate adjustment warning; Shell, Coca-Cola HBC and Elementis see gains

On London’s equity markets, OSB Group plummeted by 28.81% after the company warned of an adverse effective interest rate adjustment expected to be around £160m to £180m in the first half of 2023 on an underlying basis.

The adjustment, according to the company, was due to “a reduction in the expected time spent on the reversion rate by Precise Mortgages customers”.

The development led Canaccord Genuity to forecast an approximate 30% blow to the company's profit before tax in 2023, and a roughly 8% hit to the net asset value (NAV).

Peers Paragon Banking Group and Virgin Money UK also endured losses, falling by 2.63% and 2.17% respectively.

On the upside, energy giant Shell saw a modest rise of 0.79%, even after it cautioned that its second-quarter gas trading results were expected to be "significantly lower" than the previous quarter.

Meanwhile, Coca-Cola HBC surged 5.1% after the company raised its full-year earnings guidance following a stronger-than-predicted finish to the first half of the year.

In the specialty chemicals sector, shares of Elementis rose by 4.6%, after JPMorgan Cazenove upgraded the company from 'neutral' to 'overweight'.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,256.94 -0.32%
FTSE 250 (MCX) 18,003.97 0.49%
techMARK (TASX) 4,289.49 -0.19%

FTSE 100 - Risers

Ocado Group (OCDO) 592.00p 7.01%
Coca-Cola HBC AG (CDI) (CCH) 2,372.00p 5.10%
Johnson Matthey (JMAT) 1,707.00p 2.80%
Kingfisher (KGF) 224.10p 2.75%
Rolls-Royce Holdings (RR.) 148.50p 2.27%
JD Sports Fashion (JD.) 141.00p 2.17%
Melrose Industries (MRO) 489.40p 1.81%
Croda International (CRDA) 5,562.00p 1.79%
Antofagasta (ANTO) 1,415.50p 1.72%
Smurfit Kappa Group (CDI) (SKG) 2,656.00p 1.68%

FTSE 100 - Fallers

Relx plc (REL) 2,463.00p -2.92%
Intertek Group (ITRK) 3,998.00p -2.49%
Severn Trent (SVT) 2,394.00p -2.33%
AstraZeneca (AZN) 10,110.00p -2.11%
National Grid (NG.) 999.20p -2.04%
United Utilities Group (UU.) 931.60p -1.65%
GSK (GSK) 1,316.00p -1.56%
SSE (SSE) 1,734.00p -1.53%
Experian (EXPN) 2,860.00p -1.52%
Diageo (DGE) 3,270.00p -1.42%

FTSE 250 - Risers

Elementis (ELM) 104.60p 4.60%
Wizz Air Holdings (WIZZ) 2,705.00p 4.40%
Dunelm Group (DNLM) 1,035.00p 4.28%
Victrex plc (VCT) 1,489.00p 4.27%
Abrdn Private Equity Opportunities Trust (APEO) 455.00p 4.12%
Bank of Georgia Group (BGEO) 2,750.00p 3.77%
Molten Ventures (GROW) 263.40p 3.70%
Carnival (CCL) 1,350.50p 3.69%
RHI Magnesita N.V. (DI) (RHIM) 2,684.00p 3.55%
Hilton Food Group (HFG) 645.00p 3.53%

FTSE 250 - Fallers

OSB Group (OSB) 335.00p -28.81%
Ithaca Energy (ITH) 141.00p -2.89%
Paragon Banking Group (PAG) 495.60p -2.63%
Warehouse Reit (WHR) 78.50p -2.61%
PureTech Health (PRTC) 215.50p -2.49%
Virgin Money UK (VMUK) 141.85p -2.17%
Supermarket Income Reit (SUPR) 71.00p -1.94%
Just Group (JUST) 74.10p -1.72%
Pennon Group (PNN) 679.00p -1.67%
Quilter (QLT) 77.00p -1.66%