London close: Stocks mixed, Ryanair leads low-cost airlines higher

London’s stock markets finished mixed on Monday, with low-cost airlines in focus as investors cheered Ryanair’s latest figures.

The FTSE 100 edged up marginally by 0.0004%, closing at 7,417.76 points, while the FTSE 250 declined 1.31% to end the trading day at 17,747.47.

In currency markets, sterling was last up 0.04% on the dollar, trading at $1.2385, while it dipped 0.06% against the euro to change hands at €1.1532.

“After the big gains of last week, European markets have spent the day taking a bit of a pause for reflection, with the FTSE 100 edging higher, while the FTSE 250, DAX and CAC 40 have all struggled,” said CMC Markets chief market analyst Michael Hewson.

“Melrose Industries is the best performer after announcing that its GKN Aerospace division has signed a new agreement with GE Aerospace that expands its participation in the GEnx high-thrust engine programme, which could be worth up to $5bn over the full 30-plus year lifespan of the engine.

“This outperformance from Melrose has also helped to give Rolls-Royce shares a lift.”

Hewson added that Ryanair’s first-half results saw the airline report revenues of €8.58bn, an increase of 30% from the same period last year.

“Travel and leisure stocks have seen modest gains, with easyJet and Jet2 also pushing higher.”

Construction sector faces downturn, new car registrations rise

In economic news, the UK construction sector faced another downturn in October, primarily driven by a decline in housebuilding, according to fresh survey data.

The S&P Global/CIPS construction purchasing managers’ index (PMI) increased slightly from 45.0 in September to 45.6, but remained significantly below the 50-point threshold that separates contraction from expansion.

That result fell short of consensus expectations for a reading of 46.0, and marked the second-lowest figure since May 2020.

The survey revealed that housebuilding experienced its 11th consecutive monthly decrease, with an index reading of 38.5.

That drop was attributed to reduced demand and subsequent cutbacks in new projects.

Additionally, output in the civil engineering sector also saw a sharp decline, with an index reading of 43.7 in October, representing the fastest rate of decline since July 2022.

However, there were indications of stability in the commercial building segment, where activity declined only slightly and at a slower pace compared to September.

Tim Moore, economics director at S&P Global Market Intelligence, said the data highlighted “another solid reduction in UK construction output as elevated borrowing costs and a wait-and-see approach to new projects weighed on activity”.

“Total new work continued to fall more quickly than at any time since the initial pandemic lockdown period, which contributed to shrinking demand for construction products and materials during October,” he said.

“Competitive pressure on suppliers to pass on lower commodity prices resulted in the fastest decline in input costs since August 2009.

“Sub-contractors meanwhile cut their charges for the first time in more than three years in response to a further downturn in workloads during October.”

In contrast to the construction sector’s struggles, the UK’s new car registrations showed a solid rise of about 14% in October.

That marked the 15th consecutive monthly increase and reflected the ongoing recovery of the automotive industry from supply chain disruptions related to the Covid-19 pandemic.

According to the Society of Motor Manufacturers and Traders (SMMT), new vehicle registrations surged by 14.3% year-on-year, reaching 153,529 in October.

Year-to-date registrations also substantially increased, rising by 19.6% to 1.60 million.

Notably, diesel registrations experienced a decline of 17.1% year-on-year, while petrol registrations showed a 9.3% increase at 62,303.

Battery electric vehicle registrations rose by 20.1% to 23,943, plug-in hybrid electric vehicle registrations surged by 60.5% to 14,285, and hybrid electric vehicle registrations grew by 24.6% to 19,574.

However, the report highlighted that less than one-quarter of new battery-powered electric cars were sold to private buyers.

Fleet registrations, on the other hand, grew by 28.8% year-on-year, reaching 87,479, while private demand remained relatively stable at 62,915.

“With demand for new cars surpassing pre-pandemic levels in the month, the market is defying expectations and driving growth.” said Mike Hawes, chief executive of the SMMT.

“As fleet uptake flourishes, particularly for EVs, sustained success depends on encouraging all consumers to invest in the latest zero-emission vehicles.

“The Autumn Statement is a key opportunity for the government to introduce incentives and facilitate infrastructure investment.”

On the continent, German factory orders unexpectedly rose in September, according to a report from Deutsche Bundesbank.

The positive development followed a downward revision of previous data and offered a glimmer of hope for manufacturing.

Orders, encompassing shipments, inventories, and new and unfilled orders, increased by 0.2% over the month, surpassing the expected 1% decline.

However, the improvement came after a substantial revision to August’s figures, which were initially estimated to have increased by 3.9% but were later revised down to a 1.9% rise.

The revision was put down to inaccuracies in data reporting for the manufacturing of data processing equipment and electronic and optical products.

Low-cost carriers ascend, Hipgnosis falls back

On London’s equity markets, low-cost airlines were in the green, boosted by Ryanair’s announcement of its first-ever dividend and a robust 59% surge in first-half profit after tax, reaching €2.18bn.

The impressive performance was attributed to a strong first-quarter Easter, record summer traffic, and higher fares.

As a result, easyJet saw a 1.23% increase in its stock price, and Wizz Air Holdings advanced 0.79%.

Melrose Industries added 3.48% after signing a new $5bn aftermarket services agreement with engine giant GE Aerospace.

JD Sports Fashion saw a 0.49% increase in its stock price after Citi initiated stock coverage with a ‘buy’ rating.

Citi expressed confidence in JD Sports’ potential to generate returns above its weighted average cost of capital, driven by effective capital deployment and strong cash generation supported by efficient working capital control.

On the downside, Hipgnosis Songs Fund, a music rights owner, faced a 1.79% decline in its stock value.

The company announced that it would not declare dividends before the new financial year, citing the need to ensure sufficient cash resources after a review of its financial position.

Homeware retailer Dunelm Group fell 1.73% despite RBC Capital Markets upgrading its stance on the stock to ‘sector perform’ from ‘underperform’ and raising the price target to 1,100p from 1,000p.

RBC highlighted Dunelm’s strength in the UK retail market and its track record of market share gains, but the stock declined.

High-street stalwart Next lost 1.61% after being downgraded to ‘sector perform’ from ‘outperform’ by the same outfit.

The price target was also reduced to 7,700p from 8,000p, with the downgrade attributed to a perception of less scope for positive surprises in the near term.

Foreign exchange processing specialist CAB Payments Holdings faced a 2.2% decline in its stock price amid concerns raised by shareholders about potentially misleading information in its initial public offering (IPO) prospectus.

The IPO, endorsed by JPMorgan and Barclays, came under scrutiny after the company issued a profit warning just four months after going public.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,417.76 0.00%
FTSE 250 (MCX) 17,747.47 -1.31%
techMARK (TASX) 4,061.28 -0.74%

FTSE 100 - Risers

Melrose Industries (MRO) 507.00p 3.51%
Standard Chartered (STAN) 632.00p 2.07%
Entain (ENT) 934.40p 1.61%
NATWEST GROUP (NWG) 190.00p 1.52%
Rolls-Royce Holdings (RR.) 224.10p 1.45%
Reckitt Benckiser Group (RKT) 5,488.00p 1.40%
Whitbread (WTB) 3,294.00p 1.32%
HSBC Holdings (HSBA) 609.30p 1.18%
M&G (MNG) 204.60p 0.99%
Shell (SHEL) 2,673.50p 0.79%

FTSE 100 - Fallers

Unite Group (UTG) 911.50p -4.25%
SEGRO (SGRO) 758.00p -3.27%
Land Securities Group (LAND) 596.80p -3.18%
WPP (WPP) 723.80p -2.72%
Hargreaves Lansdown (HL.) 730.80p -2.64%
Croda International (CRDA) 4,439.00p -2.61%
Schroders (SDR) 383.60p -2.42%
Ocado Group (OCDO) 530.00p -2.25%
Diploma (DPLM) 2,910.00p -1.95%
DCC (CDI) (DCC) 4,568.00p -1.83%

FTSE 250 - Risers

Digital 9 Infrastructure NPV (DGI9) 49.45p 8.23%
North Atlantic Smaller Companies Inv Trust (NAS) 3,610.00p 1.98%
Templeton Emerging Markets Inv Trust (TEM) 149.60p 1.91%
Moonpig Group (MOON) 167.80p 1.57%
Jlen Environmental Assets Group Limited NPV (JLEN) 88.20p 1.38%
easyJet (EZJ) 396.00p 1.23%
Marshalls (MSLH) 217.20p 1.21%
SThree (STEM) 380.50p 1.19%
Pacific Horizon Inv Trust (PHI) 536.00p 1.13%
W.A.G Payment Solutions (WPS) 92.00p 1.10%

FTSE 250 - Fallers

Ashmore Group (ASHM) 166.40p -6.09%
IP Group (IPO) 46.20p -5.91%
Ceres Power Holdings (CWR) 216.60p -5.83%
Tritax Eurobox (GBP) (EBOX) 47.75p -5.45%
888 Holdings (DI) (888) 81.55p -5.39%
Tritax Big Box Reit (BBOX) 144.80p -4.61%
UK Commercial Property Reit Limited (UKCM) 56.50p -4.40%
Inchcape (INCH) 662.00p -4.34%
International Distributions Services (IDS) 244.20p -4.24%
Spirent Communications (SPT) 96.65p -4.21%