London close: Stocks rise ahead of Easter long weekend

London's stock markets ended the last day of the Good Friday-truncated week in positive territory on Thursday.

The FTSE 100 closed up 1.03% at 7,741.56, while the FTSE 250 rose 1.05% to finish at 18,797.03.

Investors were reacting to a fresh dump of data on both sides of the Atlantic, including readings on UK house prices and the construction sector, as well as reports on employment trends in the United States.

Sterling was in negative territory, last falling 0.08% against the dollar to trade at $1.2452, and weakening 0.25% on the euro to change hands at €1.1398.

“Stock, bond and foreign markets have traded in tight ranges on low volume today, ahead of Friday's US nonfarm payrolls during which the UK, Germany, Switzerland and Canada will be shut due to Easter bank holidays,” said IG senior market analyst Axel Rudolph.

“Friday’s employment data will be watched more closely than usual after two US employment reports this week showed the jobs market unexpectedly weakening.

“With investors still being skittish about the outlook for the year, next week's US FOMC minutes, consumer price index data for March and the start of the first quarter earnings season may shed more light on whether the recent equity market rally has legs.”

House prices increase in March as construction growth slows

In economic news, mortgage lender Halifax reported that UK house prices increased for the third consecutive month in March, rising 0.8% from February to reach an average sale price of £287,880.

The increase was, however, slower than February's 1.2%.

On an annual basis, the rate of price growth slowed to 1.6%, the lowest since October 2019.

Halifax said the latest figures indicated borrowing costs could be easing after the previous government's proposed tax cuts led to a spike in lending rates and the withdrawal of thousands of mortgage products.

Rival lender Nationwide had however reported that house prices had fallen by 3.1%, the biggest annual decline since July 2009.

"While the path for interest rates is uncertain, mortgage costs are unlikely to get significantly cheaper in the short-term and the performance of the housing market will continue to reflect these new norms of higher borrowing costs and lower demand," said Halifax mortgages director Kim Kinnaird.

“Therefore, we still expect to see a continued slowdown through this year.

“While the increased cost of living continues to put significant pressure on personal finances, the likely drop in energy prices - and inflation more generally - in the coming months should offer a little more headroom in household budgets.”

Meanwhile, a closely-watched survey revealed that the UK construction sector slowed last month as higher borrowing costs hit residential demand.

The S&P Global/CIPS UK construction purchasing managers' index (PMI) came in at 50.7 in March, down from February’s 54.6 but still above the neutral 50-point threshold.

Civil engineering was the best-performing sub-category at 52.0, boosted by work on the HS2 rail project and robust demand from other transport-related construction.

Housing activity, however, fell to 44.2, making for the fastest rate of decline since May 2020 as fewer tender opportunities arose due to higher borrowing costs and a subsequent shut down in new house building projects.

Commercial building work was also softer.

“Despite worries about the near-term outlook for housing activity, expectations for total construction output for the year ahead were relatively upbeat,” said Tim Moore, economics director at S&P Global Market Intelligence.

“Growth projections were boosted by the fastest improvement in suppliers’ delivering times for more than a decade.”

In the eurozone, construction activity contracted for the 11th consecutive month on the back of a weaker housing market, with S&P Global's index falling to 45.0 in March from 47.6 in February, the sharpest decline seen in 2023 to date.

German industrial production meanwhile rose by 2% in February against the previous month, driven by vehicle manufacture, according to the federal statistical office.

Analysts had predicted a slight increase of 0.1%.

Across the pond, revised weekly jobless claims figures showed that the number of initial unemployment claims in the US fell 18,000 during the week ended 1 April to reach 228,000 - a tad tighter than previously thought.

However, job cut announcements in the US continued rising last month, with companies based in the US announcing 15% more job reductions in March than one year before, reaching 89,703, according to data from Challenger, Gray & Christmas.

Finally, data released earlier in the global day showed that activity in China’s services sector grew at the fastest pace in two-and-a-half years in March, with the Caixin services PMI rising to 57.8 from 55.0 in February.

That marked the third increase in a row, and the fastest rate of expansion since November 2020.

The increase was linked to sustained improvements in operating conditions and new order intakes following the recent easing of Covid measures.

Caixin said new export business expanded at the quickest rate on record.

TUI jumps ahead of holiday, ex-divs prove a drag

On London’s equity markets, oil giant Shell gained 2.29% after a positive first-quarter update.

“In its usual teaser ahead of quarterly results Shell is flagging a big loss - but there is a reason investors are brushing this news off,” said Danni Hewson, head of financial analysis at AJ Bell.

“The anticipated loss is a quirk of accounting - reflecting one-off tax charges which could well be the result of booking the impact of future windfall taxes upfront.

“Based on the performance of the company’s other business units, you would still expect Shell to be generating plenty of cash to fund its dividend.”

Elsewhere, Ferrexpo rallied by 5.88% after announcing that it more than doubled iron ore pellet production.

Travel organiser TUI surged 11.99%, after it confirmed strong demand for sunshine destinations over the Easter holiday period and predicted a "good" summer this year.

Barclays was also in the black, rising 2.64% after US proxy advisor Glass Lewis recommended shareholders vote against the bank's pay proposals for top executives.

On the downside, a number of equities were in negative territory as they went ex-dividend, including Melrose Industries, Reckitt Benckiser Group, Rentokil Initial, ConvaTec Group, Smiths Group, Savills, Man Group and Howden Joinery Group.

The losses for those ranged from 0.84% to 2.45%.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,741.56 1.03%
FTSE 250 (MCX) 18,797.03 1.05%
techMARK (TASX) 4,591.31 1.49%

FTSE 100 - Risers

Unite Group (UTG) 979.00p 3.76%
Admiral Group (ADM) 2,209.00p 3.61%
Land Securities Group (LAND) 638.20p 3.44%
Legal & General Group (LGEN) 242.00p 3.07%
Rolls-Royce Holdings (RR.) 147.95p 2.92%
Haleon (HLN) 350.60p 2.92%
SEGRO (SGRO) 778.00p 2.86%
British Land Company (BLND) 393.10p 2.83%
Barclays (BARC) 151.62p 2.64%
Entain (ENT) 1,286.00p 2.55%

FTSE 100 - Fallers

Convatec Group (CTEC) 221.80p -2.29%
Melrose Industries (MRO) 160.50p -2.04%
Reckitt Benckiser Group (RKT) 6,230.00p -1.67%
Smiths Group (SMIN) 1,645.50p -1.26%
Rentokil Initial (RTO) 588.80p -0.84%
JD Sports Fashion (JD.) 166.05p -0.60%
Pershing Square Holdings Ltd NPV (PSH) 2,754.00p -0.58%
Ashtead Group (AHT) 4,444.00p -0.54%
Burberry Group (BRBY) 2,475.00p -0.40%
Anglo American (AAL) 2,600.50p -0.38%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 624.00p 11.99%
Ferrexpo (FXPO) 117.10p 5.88%
Hammerson (HMSO) 26.92p 5.73%
Tritax Big Box Reit (BBOX) 145.50p 4.38%
Assura (AGR) 51.10p 4.29%
Digital 9 Infrastructure NPV (DGI9) 70.50p 3.98%
Primary Health Properties (PHP) 104.60p 3.87%
Hikma Pharmaceuticals (HIK) 1,751.00p 3.82%
Tritax Eurobox (GBP) (EBOX) 63.40p 3.76%
LondonMetric Property (LMP) 180.20p 3.74%

FTSE 250 - Fallers

Abrdn Private Equity Opportunities Trust (APEO) 420.00p -3.67%
Vietnam Enterprise Investments (DI) (VEIL) 562.00p -3.27%
IMI (IMI) 1,425.00p -2.80%
Man Group (EMG) 210.60p -2.45%
Bakkavor Group (BAKK) 100.50p -2.43%
W.A.G Payment Solutions (WPS) 92.60p -2.32%
International Public Partnerships Ltd. (INPP) 145.00p -2.29%
Travis Perkins (TPK) 888.20p -2.22%
Howden Joinery Group (HWDN) 652.60p -1.81%
JPMorgan Japanese Inv Trust (JFJ) 454.00p -1.63%