London close: Stocks start the month with positive close

London's financial markets finished in positive territory on Friday, with investor sentiment buoyed by the recent easing of inflation in the United States, as market participants mulled the latest manufacturing data from the UK.

The FTSE 100 index rose by 0.69%, reaching 7,682.50 points by the end of the trading session, while the FTSE 250 climbed 1.57% to settle at 19,354.38 points.

In currency markets, sterling was last up 0.23% on the dollar, trading at $1.2654, while it experienced a slight decline of 0.03% against the euro, changing hands at €1.1679.

“China's factory growth rising above forecasts even though manufacturing shrank for a fifth straight month did not dent investors' mood with the country's stock indices pursuing their recovery, the Japanese Nikkei 225 briefly breaking through its psychological 40,000 barrier and several European and US indices hitting record highs,” said IG senior market analyst Axel Rudolph.

“The German DAX 40 index intraday made its sixth consecutive daily record high as investors continue to favour investing in Europe's largest economy.

“It did so despite Eurozone inflation remaining stubbornly high above the 3% mark for core inflation with both it and the headline rate coming in above expectations.”

Rudolph added that the FTSE 100, although still trailing its peers by a large margin, also ended the day in positive territory as UK house prices rose for the first time in over a year ahead of next week's budget.

“The price of crude oil rose by around 2% on Friday as a Gaza cease-fire remains elusive and China's factory growth picks up.

“The gold price also had a good week on flight-to-safety flows amid a speech by Putin in which he mentioned Russian nuclear weapons being capable of hitting Western targets and as China, the world's second largest global importer, keeps buying the precious metal according to a Reuters story.

“Next week the focus will be on the ECB monetary policy meeting, UK budget and US non-farm payrolls.”

Manufacturing sector still contracting as retail footfall crumbles

In economic news, the UK manufacturing sector continued to grapple with challenges in February, according to fresh survey data.

Despite a slight uptick in the S&P Global manufacturing purchasing managers' index (PMI) to 47.5 from January's 47.0, the sector remained below the crucial 50.0 mark for the 19th consecutive month.

Disruptions stemming from the Red Sea crisis hampered production and vendor delivery schedules, driving up costs for manufacturers seeking alternative suppliers closer to home.

Weak demand further exacerbated the situation, with new order intakes declining at the fastest pace since October.

“UK manufacturers faced challenging circumstances in February, as the ongoing impact of the Red Sea crisis delayed raw material deliveries, inflated purchase prices and impacted production capabilities,” said Rob Dobson, director at S&P Global Market Intelligence.

“There were also knock-on effects for demand, as new export orders were hit by both supply disruptions and higher shipping costs.

“Production volumes subsequently contracted for the 12th successive month while total new orders fell at the sharpest rate since October.”

Meanwhile, retail footfall took a significant hit last month, as adverse weather conditions kept shoppers away.

According to the BRC-Sensormatic IQ Footfall Monitor, footfall slumped by 6.2% in February, a stark contrast to the 2.8% decline witnessed in January.

High streets bore the brunt of this decline, with footfall plummeting by 9.3%, while shopping centres and retail parks also experienced notable decreases.

“Footfall experienced its biggest fall since the pandemic,” said Helen Dickinson, chief executive of the British Retail Consortium.

“One of the wettest February on record, exacerbated by train strikes at the start of the month, meant shoppers visited fewer stores, with high streets one of the most significant declines.

“London, where footfall had been outperforming other major cities in the UK, saw one of the most significant declines.”

On a more positive note, annual house prices in the UK saw a resurgence in February, marking the first growth in over a year.

The uptick, attributed to a dip in borrowing costs, saw house prices rise by 1.2% compared to the previous year.

Monthly figures remained steady, with prices up by 0.7%.

Despite the growth, house prices still lingered around 3% below the record highs recorded in the summer of 2022.

“The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market,” said Nationwide chief economist Robert Gardner.

“Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.

“Nevertheless, near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates.”

On the continent, eurozone consumer prices rose higher than expected in February, although core inflation continued its downward trajectory, reaching its lowest point in nearly two years.

Manufacturing activity in the region meanwhile showed signs of a slight slowdown, albeit with indications that contraction was easing, according to flash estimates from the Hamburg Commercial Bank manufacturing PMI.

Across the Atlantic, US manufacturing conditions saw a notable improvement in February, marking the fastest pace of growth since July 2022, as per a survey released earlier.

The positive momentum contrasted with relatively stable readings in China, where manufacturing activity showed little change but managed to surpass economists' expectations.

Pearson and ITV pace gains, Relx and Spectris in the red

On London’s equity markets, education publisher Pearson jumped 5.09% following a positive earnings report and an extension of its share buyback program by £200m.

ITV was also in focus, surging 14.34% after announcing the sale of its entire stake in streaming service BritBox International to BBC Studios for £255m.

Banking stocks Barclays, NatWest Group, Standard Chartered, and Lloyds Banking Group all posted gains, rising 2.35%, 3.22%, 1.83% and 1.72%, respectively.

WAG Payment Solutions, trading as Eurowag, saw its stock price rocket 7.44%, although the reason behind the rise remained unclear.

On the downside, property website Rightmove declined 0.07% after it warned of potential customer number decreases amidst uncertainty surrounding interest rates and mortgage borrowing costs.

Specialist engineer IMI saw a 0.4% dip in its stock price, despite reporting a 12% increase in profits for 2023 and forecasting higher earnings for the current year.

Relx faced pressure, falling 1.33% after Berenberg downgraded the stock to 'hold' from 'buy,' citing recent share price outperformance and noting that consensus had caught up with the company's medium-term growth prospects.

Similarly, Spectris, a precision instrumentation and controls company, saw its stock fall 4.05% despite reporting record profits for 2023, with sales slightly below expectations.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,682.50 0.69%
FTSE 250 (MCX) 19,354.38 1.57%
techMARK (TASX) 4,377.33 0.19%

FTSE 100 - Risers

Pearson (PSON) 1,014.00p 5.56%
Endeavour Mining (EDV) 1,324.00p 3.84%
Anglo American (AAL) 1,760.80p 3.52%
Standard Chartered (STAN) 690.80p 3.48%
NATWEST GROUP (NWG) 247.00p 3.22%
Barclays (BARC) 169.52p 3.08%
Reckitt Benckiser Group (RKT) 5,144.00p 2.92%
Croda International (CRDA) 4,899.00p 2.77%
Barratt Developments (BDEV) 479.00p 2.68%
Airtel Africa (AAF) 97.15p 2.42%

FTSE 100 - Fallers

Ocado Group (OCDO) 476.00p -6.92%
Whitbread (WTB) 3,238.00p -1.97%
Hikma Pharmaceuticals (HIK) 1,933.50p -1.70%
Bunzl (BNZL) 3,104.00p -1.55%
Melrose Industries (MRO) 625.80p -1.45%
Relx plc (REL) 3,411.00p -1.44%
Marks & Spencer Group (MKS) 234.40p -1.01%
Kingfisher (KGF) 232.40p -0.90%
Experian (EXPN) 3,358.00p -0.80%
Intertek Group (ITRK) 4,588.00p -0.74%

FTSE 250 - Risers

ITV (ITV) 63.96p 14.34%
Quilter (QLT) 106.60p 10.52%
Close Brothers Group (CBG) 382.80p 10.38%
W.A.G Payment Solutions (WPS) 78.00p 7.44%
TBC Bank Group (TBCG) 3,165.00p 6.93%
Bank of Georgia Group (BGEO) 5,020.00p 6.58%
Victrex plc (VCT) 1,297.00p 5.45%
Vistry Group (VTY) 1,106.00p 5.23%
Harbour Energy (HBR) 264.30p 4.71%
Wizz Air Holdings (WIZZ) 2,235.00p 4.59%

FTSE 250 - Fallers

Spectris (SXS) 3,363.00p -4.05%
Mobico Group (MCG) 75.60p -3.08%
Genus (GNS) 1,740.00p -2.90%
RHI Magnesita N.V. (DI) (RHIM) 3,602.00p -2.49%
Trustpilot Group (TRST) 186.80p -2.30%
Vesuvius (VSVS) 474.00p -2.19%
Kainos Group (KNOS) 1,086.00p -1.54%
NCC Group (NCC) 124.60p -1.42%
Ashmore Group (ASHM) 204.60p -1.25%
Abrdn (ABDN) 155.45p -1.24%