London close: Stocks slip after hawkish Fedspeak

London stocks underperformed their US counterparts heading into the end of the month.

Some analysts attributed part of the decline to hawkish remarks out of Minneapolis Fed boss Neel Kashkari.

Speaking at the Barclays-CEPR International Monetary Policy Forum, Kashkari said that he didn't know of anyone who had formally taken the possibility of rate hikes off the table, although he did not believe that they were the most likely outcome, Barron's reported.

The FTSE 100 fell 0.76% to 8,254.18, alongside a 0.32% dip on the second-tier index to 20,705.27.

Front-dated Brent futures rose 0.91% to $84 a barrel ahead of OPEC+'s ministerial meeting on 2 June, and gold futures gained over 1% on tensions in the Middle East after an Egyptian solider was killed.

For his part, Guy Lawson-Johns, equity analyst at Hargreaves Lansdown, said: "Last week’s election announcement is causing some short-term volatility in the markets, but longer-term investors can usually take this as background noise.

"Rishi Sunak is betting on a £2.4bn tax break to win the support of pensioners as he fights to stay in office. Meanwhile, the National Service pitch appears to be a defensive strategy to shore up core Tory voters as the Conservatives look set to gain an unprecedentedly low number of seats."

Investors were also mulling the latest shop price index from the British Retail Consortium and NeilsenIQ, which showed that shop price inflation slowed to 0.6% in May after 0.8% in April.

That marked the lowest rate of shop price inflation since November 2021, and took inflation below the three-month average of 0.9%.

Non-food prices continued to deflate, with an annual rate of -0.8% in May, compared to -0.6% in April.

That was the lowest deflation rate since October 2021, and was also below the three-month average, which was -0.4%.

In equity markets, DraftKings and FanDuel owner Flutter Entertainment was under the cosh after the Illinois Senate passed a bill that would make Illinois the second most expensive state for wagers to do business in, with companies having to pay a top rate of 40% tax.

Persimmon fell following a report the housebuilder is exploring a £1bn takeover bid for Cala Group, a rival player in the sector which has been put up for sale. According to Sky News, Persimmon is leaning towards submitting an offer for Cala ahead of a bid deadline next week.

Insiders expect Cala, which is being auctioned by Legal & General, to command a price tag of about £1bn. L&G shares were trading higher.

Great Portland Estates tumbled as the shares went ex-rights.

On the upside, investment firm Intermediate Capital Group rallied as it said profits more than doubled in the year ended 31 March and reported a huge increase in performance fee income while assets under management rose by nearly a quarter.

Market Movers

FTSE 100 (UKX) 8,254.18 -0.76%
FTSE 250 (MCX) 20,705.27 -0.32%
techMARK (TASX) 4,813.07 -0.84%

FTSE 100 - Risers

Ocado Group (OCDO) 410.40p 9.79%
JD Sports Fashion (JD.) 128.05p 5.43%
Intermediate Capital Group (ICG) 2,394.00p 3.19%
Fresnillo (FRES) 614.00p 3.02%
Antofagasta (ANTO) 2,311.00p 2.89%
Legal & General Group (LGEN) 252.80p 1.98%
RS Group (RS1) 753.50p 1.76%
Lloyds Banking Group (LLOY) 55.58p 1.42%
easyJet (EZJ) 463.90p 1.40%
Rolls-Royce Holdings (RR.) 451.00p 1.39%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 14,815.00p -7.35%
Entain (ENT) 674.00p -4.69%
Persimmon (PSN) 1,436.50p -3.00%
Associated British Foods (ABF) 2,641.00p -2.98%
Relx plc (REL) 3,426.00p -2.67%
Severn Trent (SVT) 2,385.00p -2.61%
United Utilities Group (UU.) 981.80p -2.55%
Halma (HLMA) 2,258.00p -2.46%
Hikma Pharmaceuticals (HIK) 1,910.00p -2.45%
Intertek Group (ITRK) 4,904.00p -2.41%

FTSE 250 - Risers

Octopus Renewables Infrastructure Trust (ORIT) 70.30p 6.52%
PZ Cussons (PZC) 117.20p 5.59%
Indivior (INDV) 1,428.00p 5.23%
Hochschild Mining (HOC) 180.80p 4.75%
Foresight Group Holdings Limited NPV (FSG) 465.00p 4.73%
IP Group (IPO) 54.40p 4.62%
Moonpig Group (MOON) 161.40p 4.53%
Endeavour Mining (EDV) 1,755.00p 4.40%
Helios Towers (HTWS) 123.00p 4.24%
Barr (A.G.) (BAG) 620.00p 3.85%

FTSE 250 - Fallers

Great Portland Estates (GPE) 361.00p -14.05%
SSP Group (SSPG) 169.40p -5.04%
Ferrexpo (FXPO) 45.15p -4.95%
Vistry Group (VTY) 1,255.00p -4.20%
Pagegroup (PAGE) 465.00p -4.12%
Quilter (QLT) 114.20p -4.11%
Ascential (ASCL) 328.00p -3.95%
Senior (SNR) 164.80p -3.85%
Hilton Food Group (HFG) 905.00p -3.52%
Bytes Technology Group (BYIT) 582.50p -3.48%