London close: Stocks weaker ahead of BoE rate decision

London’s stocks closed in negative territory on Tuesday, as investors weighed the implications of the latest policy announcement from China, along with newly released UK grocery price data.

The FTSE 100 ended the trading session down 0.25% at 7,569.31, while the FTSE 250 saw a sharper fall of 0.57% to close at 18,746.16.

Sterling was also in the red, and was last down 0.48% on the dollar to trade at $1.2731, while it weakened 0.3% against the euro to change hands at €1.1678.

“US stock indices followed Asian and European indices lower as liquidity returned with US markets re-opening after their long weekend,” said IG senior market analyst Axel Rudolph.

“China's 10 basis point rate cut didn't revive sentiment with investors instead focusing on tomorrow and Thursday's testimony by the Fed chair at the US senate banking committee.”

Grocery price inflation reaches lowest monthly rate so far this year

In economic news, Kantar Worldpanel reported an ease in grocery price inflation to its lowest monthly rate this year.

The rate clocked in at 16.5% for the four weeks leading to 11 June, marking a descent from the 17.2% recorded in the prior month.

Despite the decline, it still remained the sixth highest monthly figure since the financial crisis of 2008.

Fraser McKevitt, head of retail and consumer insight at Kantar, said that while the easing will be a relief to shoppers and retailers, prices rising at 16.5% “isn’t something to celebrate and it’s still the sixth highest monthly figure in the past 15 years”.

“Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone,” he said.

On the continent, Europe’s largest economy experienced a fall in factory gate prices.

Data from the German federal statistics office Destatis revealed a decline of 1.4% in producer prices in the country in June on a month-on-month, seasonally-adjusted basis.

The downward shift notably reduced the annual rate of increase from 4.1% in May to a modest 1.0%, underlining cooling pressures at the production level.

Overnight, the People’s Bank of China took a significant step to stimulate its economy, slashing two critical lending rates.

In its first such move in nearly a year, the central bank reduced the one-year loan prime rate by 10-basis points to 3.55% and the five-year rate by an identical measure to 4.2%.

Frasers in focus amid acquisitions, Lookers surges on agreeing takeover offer

On London’s equity markets, Frasers Group closed flat but was still in focus after it acquired substantial stakes of 8.9% in electricals retailer Currys, and of 5% in online fashion retailer Boohoo.

This move saw Currys shares rise 2.17%, while Boohoo Group dipped 2.01% by the end of trading.

Elsewhere, online supermarket Ocado Group slumped 2.51% after a downgrade from JPMorgan Cazenove.

The bank lowered its price target from 450p to 400p, and placed the stock on a 'negative catalyst watch' ahead of the company's first-half results.

Mining sector stocks were on a downward trajectory, with Anglo American declining by 4.01%, Glencore by 1.79%, and Antofagasta by 2.24%.

Specialty chemicals firm Synthomer tumbled 8.81%, with traders linking the significant drop to a potential read-across effect after Germany's Lanxess slashed its second-quarter and full-year profit forecasts.

Outside the FTSE 350, car retail group Lookers surged 33.93% following an agreement to be purchased by the Toronto-based Alpha Auto Group in a cash deal worth £465.4m.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,569.31 -0.25%
FTSE 250 (MCX) 18,746.16 -0.57%
techMARK (TASX) 4,546.24 -0.19%

FTSE 100 - Risers

Beazley (BEZ) 590.50p 2.70%
Rolls-Royce Holdings (RR.) 157.00p 2.08%
B&M European Value Retail S.A. (DI) (BME) 566.40p 1.76%
Flutter Entertainment (CDI) (FLTR) 16,165.00p 1.35%
IMI (IMI) 1,636.00p 1.24%
Centrica (CNA) 120.00p 1.14%
Bunzl (BNZL) 3,057.00p 1.06%
Johnson Matthey (JMAT) 1,710.00p 1.03%
Reckitt Benckiser Group (RKT) 6,056.00p 0.93%
Compass Group (CPG) 2,190.00p 0.92%

FTSE 100 - Fallers

Anglo American (AAL) 2,384.50p -4.01%
NATWEST GROUP (NWG) 245.30p -2.93%
Prudential (PRU) 1,100.50p -2.52%
Ocado Group (OCDO) 424.00p -2.51%
Antofagasta (ANTO) 1,482.50p -2.24%
Glencore (GLEN) 450.80p -1.79%
BP (BP.) 453.95p -1.61%
Vodafone Group (VOD) 73.00p -1.54%
Rightmove (RMV) 521.00p -1.51%
Airtel Africa (AAF) 121.70p -1.46%

FTSE 250 - Risers

Me Group International (MEGP) 169.00p 4.97%
Digital 9 Infrastructure NPV (DGI9) 70.50p 3.52%
Marshalls (MSLH) 267.20p 3.17%
Mitchells & Butlers (MAB) 216.60p 2.65%
Indivior (INDV) 1,769.00p 2.55%
IP Group (IPO) 53.70p 2.48%
Mitie Group (MTO) 99.70p 2.26%
Currys (CURY) 54.10p 2.17%
Shaftesbury Capital (SHC) 120.50p 2.03%
4Imprint Group (FOUR) 5,110.00p 2.00%

FTSE 250 - Fallers

Synthomer (SYNT) 73.00p -8.81%
Ferrexpo (FXPO) 89.00p -5.72%
Trainline (TRN) 267.20p -5.25%
Darktrace (DARK) 315.10p -4.83%
Genus (GNS) 2,356.00p -3.92%
Genuit Group (GEN) 299.50p -3.54%
Harbour Energy (HBR) 241.20p -3.25%
Quilter (QLT) 82.10p -3.18%
Capita (CPI) 30.24p -3.07%
LXI Reit (LXI) 91.65p -2.96%