London close: Stocks pare some losses as UK private sector expands

London's stock markets ended Wednesday in negative territory, with a late recovery fueled by better-than-expected data from the UK's private sector failing to lift equities above the waterline.

The FTSE 100 closed down 0.17% at 8,153.69 points, while the FTSE 250 saw a more significant decline of 0.67%, ending the day at 20,950.84 points.

In currency markets, sterling was last up 0.12% on the dollar to trade at $1.2924, while it increased 0.13% against the euro, changing hands at €1.1908.

“The FTSE 100 reached its lowest point in more than three weeks on Wednesday as investors processed the earnings reports from US tech giants Tesla and Alphabet,” said TickMill market analyst Patrick Munnelly.

“However, Aston Martin saw a surge in its stock after releasing its half-yearly earnings update

“The quarterly earnings reports from Alphabet and Tesla failed to meet investor expectations, resulting in a decrease in risk appetite.”

Munnelly added that stocks in London’s personal goods sector dropped by more than 1%, with luxury group Burberry off more than 2%.

“The decline was attributed to weak results from LVMH, the world's largest luxury group, which reported slower sales growth in the second quarter due to reduced spending by Chinese shoppers.

“Burberry had previously issued a profit warning and cancelled its dividend following a slowdown in the luxury retail sector.

“As a result, its shares have fallen by more than 50% so far this year.”

UK private sector expands for ninth month in a row

In economic news, the UK private sector continued its expansion for the ninth consecutive month in July, with new business growth reaching its highest level in over a year.

According to the latest S&P Global composite purchasing managers' index (PMI), the UK composite PMI rose to 52.7 in July from 52.3 in May, slightly surpassing expectations of 52.6.

The index had remained above the 50-point threshold, indicating expansion, since October.

Manufacturing activity rose to 51.8, its highest since February 2022, up from 50.9, while the services PMI increased from 52.1 to 52.4.

New business growth in both sectors accelerated at the fastest pace since April 2023.

Additionally, firms increased their staffing at the quickest rate in 13 months, with manufacturing job numbers stabilising after 21 months of declines.

The rate of price growth slowed to its lowest in nearly three and a half years, driven by a decrease in output charge increases at services companies, though inflation remained historically high.

Chris Williamson, the chief business economist at S&P Global Market Intelligence, said July's figures “signal an encouraging start to the second half of the year”.

He said that easing price pressures further raised the prospect of an interest-rate cut by the Bank of England this summer, but “policymakers will likely take a cautious approach to loosening policy” amid rising manufacturing prices and salary inflation.

On the continent, the euro area's private sector growth nearly stalled in July, with both France and Germany underperforming.

S&P Global's manufacturing PMI for the eurozone fell to 45.3 from 46.1 in June, while the services PMI dropped to 51.9 from 52.8.

The composite output PMI slipped to 50.1 from 50.9, with the surveys indicating a second consecutive month of declining new orders and a six-month low in business confidence, leading to a halt in hiring that had begun earlier in the year.

Input cost inflation also accelerated, adding to the challenges faced by businesses in the region.

Meanwhile, consumer sentiment in Germany reached its highest level in over two years, according to a survey by GfK and the Nuremberg Institute for Market Decisions (NIM).

The GfK consumer climate index for August rose to -18.4 from a revised -21.6 in July, exceeding the expected -21.0.

That marked the highest reading since April 2022.

Informa and Ascential rise on combination news, Burberry in the red

On London’s equity markets, easyJet rose 3.04% following a strong third-quarter earnings report.

The low-cost airline's profits surged, buoyed by an 8% increase in passenger numbers and a 1% rise in revenue per seat.

Additionally, easyJet holidays reported a 49% growth in profit before tax, reaching £73m, with a 33% increase in passenger numbers.

Fresnillo gained 1.17% after the gold and silver miner confirmed it was on track to meet its full-year guidance.

The Mexico-based company reported an 8.4% quarter-on-quarter increase in attributable silver production, totaling 14.6 million ounces, though gold production fell by 7.7% to 130,000 ounces.

Reckitt Benckiser Group saw its shares increase by 1.93%.

Investors responded positively to the company's strategic plan to streamline its portfolio by selling off several home care brands, including Air Wick and Calgon, and its Mead Johnson Nutrition business.

Luxury carmaker Aston Martin Lagonda Global jumped 6.47% after reiterating its 2024 guidance in its half-year results.

Despite a 32% drop in wholesale volumes to 1,998 units due to its transition to new models, the luxury carmaker's average selling price rose by 29% to £274,000, driven by higher sales of Specials and enhanced personalisation options.

Volution Group advanced by 2.9% after the air quality technology company upgraded its financial year expectations.

Strong performance in the UK residential sector led to anticipated adjusted earnings per share exceeding current market forecasts.

Hochschild Mining increased 3.84% after reporting robust first-half production numbers.

The miner produced 103,752 ounces of gold and 4.1 million ounces of silver, equating to 152,792 gold equivalent ounces and 12.7 million silver equivalent ounces, reflecting a solid financial position.

In acquisition news, Informa shares climbed 3.68%, while Ascential skyrocketed 25.78% after the former announced it would acquire the latter in an agreed £1.2bn deal.

On the downside, Burberry fell 2.06%, impacted by the broader decline in European luxury stocks following disappointing second-quarter results from industry giant LVMH.

Breedon Group dropped 3.78%, despite reporting a robust first-half performance driven by strategic progress and operational efficiency.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,153.69 -0.17%
FTSE 250 (MCX) 20,950.84 -0.67%
techMARK (TASX) 4,751.77 -0.45%

FTSE 100 - Risers

Informa (INF) 878.20p 3.68%
easyJet (EZJ) 440.70p 3.04%
Intertek Group (ITRK) 4,796.00p 2.92%
Vistry Group (VTY) 1,347.00p 2.28%
Barratt Developments (BDEV) 506.80p 2.26%
Smith (DS) (SMDS) 455.80p 2.20%
Reckitt Benckiser Group (RKT) 4,493.00p 1.93%
Antofagasta (ANTO) 1,946.00p 1.73%
Anglo American (AAL) 2,222.00p 1.72%
JD Sports Fashion (JD.) 121.65p 1.50%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 443.90p -3.50%
Scottish Mortgage Inv Trust (SMT) 852.20p -2.98%
Pershing Square Holdings Ltd NPV (PSH) 4,094.00p -2.76%
Flutter Entertainment (DI) (FLTR) 15,300.00p -2.52%
Entain (ENT) 645.20p -2.06%
Burberry Group (BRBY) 704.60p -2.06%
Land Securities Group (LAND) 620.00p -2.05%
Halma (HLMA) 2,565.00p -1.95%
3i Group (III) 3,012.00p -1.92%
B&M European Value Retail S.A. (DI) (BME) 455.10p -1.92%

FTSE 250 - Risers

Ascential (ASCL) 562.00p 25.78%
Aston Martin Lagonda Global Holdings (AML) 159.70p 6.47%
Endeavour Mining (EDV) 1,806.00p 4.03%
Hochschild Mining (HOC) 183.80p 3.84%
Genus (GNS) 1,690.00p 3.05%
Future (FUTR) 1,087.00p 3.03%
Volution Group (FAN) 523.00p 2.95%
Redrow (RDW) 718.00p 2.35%
Centamin (DI) (CEY) 129.40p 1.73%
Energean (ENOG) 1,060.00p 1.73%

FTSE 250 - Fallers

TI Fluid Systems (TIFS) 127.40p -6.32%
Ocado Group (OCDO) 411.10p -4.57%
Breedon Group (BREE) 393.50p -4.02%
Allianz Technology Trust (ATT) 369.00p -3.78%
CMC Markets (CMCX) 301.00p -3.22%
Bridgepoint Group (Reg S) (BPT) 259.80p -3.20%
Marshalls (MSLH) 335.50p -3.17%
Carnival (CCL) 1,319.50p -2.98%
IntegraFin Holding (IHP) 367.50p -2.78%
RHI Magnesita N.V. (DI) (RHIM) 3,560.00p -2.73%