London close: Stocks slip as investors digest UK, US data

London stocks ended Tuesday in negative territory as investors reacted to the latest UK retail sales date, and a fresh manufacturing sector reading out of the US.

The FTSE 100 index dropped 0.78% to close at 8,298.46 points, while the FTSE 250 fell by 0.82%, ending the session at 20,808.56 points.

In currency markets, sterling was last down 0.33% on the dollar, trading at $1.3103, while it slipped 0.06% against the euro to change hands at €1.1868.

“US stock indices drop by over a percentage point as traders return from their extended Labor Day weekend and US ISM manufacturing data disappoints,” said IG senior technical analyst Axel Rudolph.

“It shows the 21st monthly contraction in US factory activity in the last 22 periods, underscoring the impact of high interest rates.

“US employment data culminating in non-farm payrolls on Friday might add to the mix and add further pressure to indices which tend to decline in September.”

Rudolph added that the price of oil was in “free fall”, dropping by over 4% to nine-month lows amid ample supply, OPEC aiming for higher production quotas and the world's largest oil importer China looking unlikely to reinvigorate its economy.

“Gold and silver prices also dip as the greenback appreciates further still.”

UK retail sales grow modestly, US manufacturing remains in contraction

In economic news, UK retail sales saw modest growth in August, rising 1% compared to the same month last year, despite the challenging economic environment.

According to the British Retail Consortium-KPMG retail sales monitor, the increase outpaced the three-month average growth rate of 0.4% but fell slightly short of the 12-month average of 1.2%.

While food sales increased by 2.9% in the three months leading up to August, non-food sales declined by 1.7%, reflecting the mixed consumer sentiment amid economic pressures.

The report suggested that the challenging conditions were likely to persist through the end of the year.

“Sales growth picked up in August, particularly for food as people came together to host barbecue and picnic gatherings for family and friends, and for summer clothing, health and beauty products as people prepared for trips away and summer social events,” said the BRC's chief executive Helen Dickinson.

“While computing did well as university students made the most of summer discounting and readied themselves for the new academic year, other back to school related sales were weaker than normal as some families opted for second hand purchases.”

In the United States, manufacturing sector activity continued to contract in August, though at a slightly slower pace.

The Institute for Supply Management’s purchasing managers' index (PMI) rose marginally to 47.2, up from 46.8 in July, but remained below the expected 47.5.

It indicated ongoing contraction in the sector, particularly in new orders and production, with both subindices declining further.

Meanwhile, the prices paid by manufacturers increased, with the corresponding subindex edging up from 52.9 to 54.0, signalling rising costs.

The PMI and its subindices continued to reflect a manufacturing sector under pressure, with readings below 50 indicating contraction.

Rolls-Royce rebounds, Wizz Air descends

On London’s equity markets, Rolls-Royce Holdings rose 2.2%, rebounding after a sharp decline on Monday.

The recovery followed news from Hong Kong airline Cathay Pacific that three of its grounded A350 aircraft, equipped with Rolls-Royce engines, had been successfully repaired, with the full fleet expected to return to service by Saturday.

Ashtead Group gained 0.97% after reporting a first-quarter profit decline that was in line with market expectations.

Watches of Switzerland Group surged by 6.32% after the luxury watch retailer confirmed it was on track to meet its annual guidance.

The company reported strong demand for key luxury brands in both the UK and US, particularly for products on registration of interest lists, which continued to exceed supply.

On the downside, Hikma Pharmaceuticals slipped by 0.6%, reversing earlier gains that followed an upgrade to ‘buy’ from ‘hold’ by Berenberg.

Rightmove dropped 5.03%, retreating after Monday’s surge.

The prior day’s gains were driven by speculation of a potential cash and share offer from Australian real estate advertising firm REA Group, which had since led to profit-taking.

Elsewhere, Wizz Air Holdings fell 3.88% despite reporting a 1% rise in passenger numbers for August, setting a new record.

The decline was attributed to concerns over capacity issues, as the airline continued to experience aircraft groundings due to problems with Pratt & Whitney’s GTF engines, leading to a slight reduction in operated seat capacity.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,298.46 -0.78%
FTSE 250 (MCX) 20,808.56 -0.82%
techMARK (TASX) 4,902.09 -0.43%

FTSE 100 - Risers

easyJet (EZJ) 488.00p 2.74%
B&M European Value Retail S.A. (DI) (BME) 447.10p 2.19%
Rolls-Royce Holdings (RR.) 472.30p 1.72%
Tesco (TSCO) 361.70p 1.57%
Reckitt Benckiser Group (RKT) 4,443.00p 1.44%
International Consolidated Airlines Group SA (CDI) (IAG) 184.80p 1.43%
Severn Trent (SVT) 2,599.00p 1.40%
Intertek Group (ITRK) 4,962.00p 1.14%
Marks & Spencer Group (MKS) 343.50p 1.06%
Ashtead Group (AHT) 5,410.00p 0.97%

FTSE 100 - Fallers

Rightmove (RMV) 660.00p -6.78%
Fresnillo (FRES) 511.50p -5.63%
Anglo American (AAL) 2,108.50p -4.81%
Antofagasta (ANTO) 1,757.00p -4.64%
Melrose Industries (MRO) 464.70p -4.34%
Glencore (GLEN) 384.75p -3.74%
BP (BP.) 416.35p -3.23%
Shell (SHEL) 2,612.00p -2.70%
NATWEST GROUP (NWG) 333.70p -2.68%
Pershing Square Holdings Ltd NPV (PSH) 3,664.00p -2.40%

FTSE 250 - Risers

Watches of Switzerland Group (WOSG) 400.20p 6.32%
W.A.G Payment Solutions (WPS) 70.40p 4.14%
Carnival (CCL) 1,148.50p 3.24%
Ocado Group (OCDO) 351.40p 3.05%
WH Smith (SMWH) 1,312.00p 2.26%
TI Fluid Systems (TIFS) 130.80p 1.71%
Vesuvius (VSVS) 408.50p 1.62%
Moonpig Group (MOON) 210.00p 1.45%
Balanced Commercial Property Trust Limited (BCPT) 86.20p 1.06%
SSP Group (SSPG) 171.20p 1.00%

FTSE 250 - Fallers

Hochschild Mining (HOC) 162.60p -5.36%
TBC Bank Group (TBCG) 2,945.00p -4.38%
Renishaw (RSW) 3,385.00p -3.97%
Discoverie Group (DSCV) 614.00p -3.76%
Essentra (ESNT) 169.40p -3.75%
Wood Group (John) (WG.) 129.90p -3.56%
Victrex plc (VCT) 993.00p -3.40%
Johnson Matthey (JMAT) 1,570.00p -3.33%
BlackRock World Mining Trust (BRWM) 503.00p -3.27%
Endeavour Mining (EDV) 1,537.00p -3.09%