London close: Stocks rise despite mixed US bank results

London’s stock markets closed on a high note Tuesday, as investors pored over the latest US retail sales figures as well as data showing easing grocery inflation in the UK.

The FTSE 100 index ended the day with a gain of 0.64%, closing at 7,453.69, while the FTSE 250 was up 1.16% at 18,618.22.

In currency markets, sterling was last down 0.18% on the dollar to trade at $1.3050, while it dipped 0.05% against the euro to change hands at €1.1624.

“European and most US stock indices remain in positive territory for the day despite mixed US bank results,” said IG senior market analyst Axel Rudolph.

“Whereas Bank of America and BNY Mellon's second-quarter results beat estimates on better interest income, investment banking and lower expenses, Morgan Stanley's profits dropped by 14% due to the global slowdown in deal making and trading.”

Declining UK grocery inflation meets modest growth in US retail sales

In economic news, grocery price inflation in the UK saw a significant decrease in the four weeks leading up to 9 July, marking its steepest descent since its peak in March.

Data disclosed by Kantar earlier revealed that grocery inflation fell from 16.5% to 14.9%, registering the fourth straight month of decline from a peak rate of 17.5% in March.

The decline was said to be the result of supermarkets ramping up their promotional activities, with more than a quarter of groceries bought on deals during the period.

“One of the biggest shifts we’ve seen in this area is retailers ramping up loyalty card deals like Tesco’s Clubcard Prices and Sainsbury’s Nectar Prices,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

“This could signal a change in focus by the grocers who had been concentrating their efforts on everyday low pricing, particularly by offering more value own-label lines.”

McKevitt said the boost to promotional spending had contributed to bringing inflation down, but added that was not all that was driving the change.

“Prices were rising quickly last summer so this latest slowdown is partially down to current figures being compared with those higher rates one year ago.”

Across the pond, US retail sales volumes saw slower-than-expected growth last month, according to the Department of Commerce.

Sales saw a monthly increase of 0.2%, falling short of the projected growth rate of 0.5%, reaching a total of $689.5bn.

Despite the lower-than-expected growth, the increase in May's sales volumes was revised upwards by two-tenths of a percentage point, recording a 0.5% gain.

When omitting the unpredictable category of motor vehicles and parts dealers, the sales volumes experienced a similar 0.2% rise, again missing the consensus of 0.3%.

Housebuilders, Darktrace and Ocado lead gains; Synthomer and Vodafone slide

On London’s equity markets, housebuilders were among the top performers, with Persimmon gaining 4.3%, Taylor Wimpey rising 4.61%, Barratt Developments increasing 3.89%, and Berkeley Group up 1.77%.

Tech firms also made headlines, with online supermarket Ocado surging 19.04% as it reported a swing to core profit in the first half of the year and maintained its annual guidance.

Ocado indicated that its retail earnings would be "marginally positive" for the full year.

Cybersecurity firm Darktrace soared 27.79% after revealing that an independent review by EY found no new issues that could impact its previously-filed public financial statements.

Darktrace also projected strong revenue growth, expecting a year-on-year increase of at least 31% for the 2023 period, or 29.2% at constant currency.

Just Group rose 9.46% after nearly doubling its first-half retirement income sales, supported by a strong annuities market.

The firm also confirmed its expectations for the year.

IntegraFin increased 3.41% following a report of strong inflows to its Transact platform in the third quarter.

The FTSE 250 company saw net inflows exceeding £0.6bn in the three months ended 30 June, with gross inflows totalling £1.5bn.

On the downside, Vodafone Group shares dipped by 0.65% following an announcement that it would receive an additional €500m in proceeds as part of the co-control partnership for Vantage Towers.

Specialty chemicals firm Synthomer fell 8.63% after it reported resilient trading despite a depression in customer demand.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,453.69 0.64%
FTSE 250 (MCX) 18,618.22 1.16%
techMARK (TASX) 4,366.85 0.42%

FTSE 100 - Risers

Ocado Group (OCDO) 691.60p 19.04%
Taylor Wimpey (TW.) 108.90p 4.61%
Persimmon (PSN) 1,092.00p 4.30%
Barratt Developments (BDEV) 424.30p 3.89%
Johnson Matthey (JMAT) 1,824.00p 3.31%
Kingfisher (KGF) 240.20p 3.22%
WPP (WPP) 873.80p 2.80%
Melrose Industries (MRO) 511.40p 2.28%
Weir Group (WEIR) 1,820.50p 2.28%
Frasers Group (FRAS) 744.00p 2.27%

FTSE 100 - Fallers

Compass Group (CPG) 2,092.00p -1.51%
Beazley (BEZ) 557.00p -1.42%
BT Group (BT.A) 121.60p -1.14%
Rentokil Initial (RTO) 616.20p -1.12%
Vodafone Group (VOD) 71.42p -0.65%
Smith & Nephew (SN.) 1,175.00p -0.59%
Halma (HLMA) 2,199.00p -0.59%
International Consolidated Airlines Group SA (CDI) (IAG) 153.70p -0.58%
SSE (SSE) 1,769.50p -0.51%
Airtel Africa (AAF) 104.00p -0.48%

FTSE 250 - Risers

Darktrace (DARK) 375.70p 27.79%
Just Group (JUST) 84.50p 9.46%
Vistry Group (VTY) 741.50p 5.64%
Molten Ventures (GROW) 260.00p 5.43%
International Distributions Services (IDS) 261.80p 5.35%
Crest Nicholson Holdings (CRST) 194.10p 5.15%
Ferrexpo (FXPO) 91.70p 4.93%
Digital 9 Infrastructure NPV (DGI9) 55.80p 4.49%
Trainline (TRN) 269.40p 4.26%
Harbour Energy (HBR) 242.70p 4.03%

FTSE 250 - Fallers

Synthomer (SYNT) 73.50p -8.63%
Me Group International (MEGP) 156.20p -4.29%
Lancashire Holdings Limited (LRE) 590.00p -3.75%
Renishaw (RSW) 3,926.00p -2.05%
Cranswick (CWK) 3,232.00p -2.00%
Discoverie Group (DSCV) 829.00p -1.89%
Auction Technology Group (ATG) 726.00p -1.63%
Empiric Student Property (ESP) 86.10p -1.60%
Man Group (EMG) 230.00p -1.54%
Wizz Air Holdings (WIZZ) 2,621.00p -1.50%