London close: Stocks rise as US debt ceiling hopes simmer

London's stock markets ended Thursday's trading session on a positive note, buoyed by optimism around a potential deal to raise the US debt ceiling.

The FTSE 100 index closed the day up 0.25% at 7,742.30, while the FTSE 250 rose 0.43% to settle at 19,298.25.

BT Group remained in focus, however, after it unveiled plans to eliminate up to 55,000 positions over the coming years.

In currencies, sterling was last down 0.5% on the dollar to trade at $1.2424, while it strengthened marginally against the euro to change hands at €1.1524.

“European markets got off to a strongly positive start to the day … [but] the afternoon session has seen a modest retreat from the highs of the day,” said CMC Markets chief market analyst Michael Hewson.

“US markets initially acted as a drag, before pulling higher on comments from House Republican Kevin McCarthy that a debt ceiling deal could be on the floor of the house by next week.

“On that basis, confidence is growing that the melodrama playing out in Washington DC is merely a piece of political theatre, and that a deal will happen eventually, as it has on so many previous occasions.”

US initial jobless claims fall by more than expected

There were no major data releases in the UK on Thursday, but across the pond, a fresh release showed a greater-than-anticipated decrease in initial jobless claims last week.

The Department of Labor's latest report revealed that for the week ended 13 May, the volume of first-time unemployment filings fell to 242,000, marking a drop of 22,000.

That was significantly lower than the projected figure of 250,000 claims.

Additionally, the four-week moving average - a less volatile measure that offers a clearer view of the overarching trend - nudged downwards by 1,000, coming in at 244,250.

In addition to initial claims, the number of continuing unemployment claims saw a downturn as well.

The measure, which accounts for individuals filing for benefits beyond their first claim, fell by 8,000 to land at 1.799 million for the week ended 6 May.

Nancy Vanden Houten at Oxford Economics explained that the bulk of the decline in first-time claims was the result of a drop in Massachusetts, however, noting that fraudulent claims in that state had reportedly inflated figures over recent weeks.

“Apart from Massachusetts, initial claims have stabilised in recent weeks after drifting higher in the first quarter - a reminder that labour market conditions are still relatively tight,” she said.

“While we expect the Fed to leave rates steady at its June meeting, a resumption of rate hikes can't be ruled out if labour market conditions don't ease more significantly.”

Aston Martin surges on Geely investment, Future tumbles

On London’s equity markets, medical products manufacturer ConvaTec ended the day 5.02% higher, buoyed by a revised upward full-year organic revenue guidance.

Aston Martin Lagonda emerged as one of the top gainers, soaring 12.46% after Chinese auto conglomerate Geely announced plans to invest £234m in the luxury car maker, becoming its third-largest shareholder.

Genuit Group, the maker of plastic pipes and ventilation products, also had a strong day with shares rising by 13.76% after it predicted annual earnings would modestly exceed market expectations.

Housebuilders found a solid footing following an encouraging update from Vistry Group, which witnessed its shares ascend 4.55%.

The company forecast impressive adjusted annual earnings north of £450m, with the news also benefiting other firms in the sector, with Persimmon, Barratt Developments, and Taylor Wimpey gaining 1.78%, 1.28% and 0.52%, respectively.

Premier Foods, the owner of brands including Mr Kipling and Oxo, improved 2.47% on the back of a dividend hike and increased full-year profits, despite a challenging operating environment.

Budget airline easyJet rose 1.46% after it expressed optimism about the upcoming summer season and reported a narrower first-half loss, aligning with market predictions.

On the downside, BT Group dropped 5% after the telecom giant announced plans for significant job reductions involving up to 55,000 positions over the coming years.

The news came as it reported adjusted core earnings up 5% to £7.9bn.

On a pre-tax basis, BT posted a 12% fall in profit to £1.7bn due to increased depreciation from network build and specific items, partially offset by adjusted EBITDA growth.

“Telecoms appears to be awash with job cuts with Vodafone and BT reducing the size of their workforces,” said Victoria Scholar, head of investment at Interactive Investor.

“Both have been struggling with the pressures of inflation, most notably from energy.

“BT is focusing on digitisation and integrating AI, a shift which is likely to require fewer workers.”

Elsewhere, Burberry Group trended downwards, shedding 5.2% despite an increase in full-year profit and a strong fourth quarter powered by the rebounding Chinese market.

Royal Mail parent International Distributions Services slid 5.99% after it reported a substantial full-year loss resulting from a year-long dispute with unions over pay and conditions.

Publishing firm Future took the hardest hit, plunging 15.87% after lowering its full-year expectations amid challenging market conditions.

In the energy sector, Energean saw its shares decline 7.93% after cutting production guidance for the year and announcing its decision on the Olympus fields off Israel would come by year-end.

In broker note action, high-street retailer Marks & Spencer was weighed down by 1.16% following a downgrade to 'neutral' from 'buy' at Citi.

Several stocks including GSK, Unilever, and PageGroup experienced minor losses as they traded ex-dividend, falling 1.29%, 1.16%, and 0.63%, respectively.

Reporting by Josh White for Sharecast.com.

FTSE 100 +19.07 (+0.25%) 7,742.30

RISERS
JD Sports Fashion +5.92% 172.65p
ConvaTec Group +5.02% 226p
Ashtead Group +3.35% 4,960p
Standard Chartered +2.88% 642.6p
DCC +2.72% 4,990p
Experian +2.45% 2,802p
Informa +2.24% 722.6p
Scottish Mortgage Investment Trust +2.09% 635p
Abrdn +2.03% 211.1p
RS Group +1.96% 862.4p

FALLERS
Burberry Group -5.2% 2,389p
BT Group -5% 140.7p
Ocado Group -3.07% 397.7p
National Grid -2.85% 1,108p
Centrica -2.46% 116.8p
Severn Trent -2.05% 2,820p
Unite Group -2.01% 900p
Imperial Brands -1.84% 1,786p
Anglo American -1.75% 2,328.5p
United Utilities Group -1.74% 1,044.5p

FTSE 250 +82.2 (+0.43%) 19,298.25

RISERS
Genuit Group +13.76% 339p
Aston Martin Lagonda Global Holdings +12.46% 260p
Tullow Oil +7.37% 24.48p
Keller Group +6.55% 716p
Asos +5.47% 453.5p
TBC Bank Group +4.87% 2,475p
Vanquis Banking Group +4.78% 230p
Mitchells & Butlers +4.67% 208.4p
Helios Towers +4.58% 96p
Vistry Group +4.55% 851p

FALLERS
Future -15.87% 880p
Energean -7.93% 1,138p
Tritax EuroBox -7.36% 64.2p
International Distributions Services -5.99% 208.9p
Videndum -3.89% 692p
Supermarket Income REIT -3.24% 83.7p
UK Commercial Property REIT -3.05% 54p
Tritax Big Box REIT -2.92% 143.2p
Centamin -2.24% 104.7p
LondonMetric Property -2.13% 183.9p