London close: Stocks weaker ahead of BoE, US inflation

London’s equity markets closed in negative territory on Tuesday, after the long weekend for the King’s coronation.

The FTSE 100 fell 0.18% to 7,764.09, while the FTSE 250 dropped 0.9% to 19,277.04.

Investors were waiting for two key announcements from both sides of the Atlantic later in the week, with the Bank of England due to make its latest interest rate decision.

Across the pond, a key inflation report was set to be released out of the United States, which could provide clues on the Federal Reserve's next move.

In currencies, sterling was in a mixed state, remaining flat on the dollar at $1.2618, while it strengthened 0.41% against the euro to change hands at €1.1515.

“European markets were fairly quiet on Tuesday compared to Asia where there were more pronounced moves up and down,” said AJ Bell investment director Russ Mould.

“In the UK, the FTSE 100 was flat as strength in consumer cyclicals and financials was offset by weakness in real estate and energy.”

Mould noted that the housing market was in focus after Halifax’s latest house price index showed a decline in prices in April, after three months in a row of recovery.

“Estate agent Purplebricks saw its share price crash as the ground continued to crumble beneath its feet.

“Talks over selling the business indicate an offer might be pitched at a price significantly below the value of the company last week and its cash pile is dwindling fast.

“The future is looking far from bright for the group.”

Retail sales climb further in April, house prices decline

In economic news, retail sales in the UK continued to grow in April, with shoppers spending more despite inflationary pressures, according to the BRC-KPMG retail sales monitor.

Total sales rose 5.1% last month, remaining steady compared to March, and reversing a 0.3% decline in sales in April last year.

Sales on a like-for-like basis, which excludes the impact of new store openings and closures, rose 5.2% in April, higher than the 4.9% growth recorded in March.

However, shoppers took home fewer items as inflationary pressures led to an increase in prices.

On an underlying basis, food sales increased 10% in the three months leading up to April, while non-food sales grew by 0.8%.

“While retail sales grew in April, overall inflation meant volumes were down for both food and non-food as customers continued to adjust spending habits,” said Helen Dickinson, chief executive of the British Retail Consortium.

“Retailers hope sales will improve over the warmer summer months, especially as consumer confidence stabilises and inflation begins to ease.

“However, they continue to face huge cost pressures from a tight labour market, high energy prices and other rising input costs.”

Elsewhere, UK house prices fell in April after three months of consecutive growth, according to the latest data from lender Halifax.

The average house price in the UK was down by 0.3% month-on-month to £286,896, following a 0.8% increase in March.

On an annual basis, house prices grew just 0.1%, down from the 1.6% uptick in March.

Kim Kinnaird, director of Halifax Mortgages, said house prices over recent months have largely mirrored the short-term volatility seen in borrowing costs.

"The sharp fall in prices we saw at the end of last year after September’s ‘mini-budget’ preceded something of a rebound in the first quarter of this year as economic conditions improved," she said.

"The economy has proven to be resilient, with a robust labour market and consumer price inflation predicted to decelerate sharply in the coming months.

“Mortgage rates are now stabilising, and though they remain well above the average of recent years, this gives important certainty to would-be buyers.”

Further afield, China reported better-than-expected export figures for April, although the pace of growth had slowed.

Exports increased by 8.5% year-on-year to $295.42bn, compared to a 14.8% rise in March, exceeding expectations for a 6.4% increase.

However, imports continued to decline, falling 7.9% to $205.21bn, which was steeper than the 1.4% decrease reported in March and below expectations for a fall of 0.1%.

As a result, China's total trade surplus was $90.2bn in April, up from $88.19bn in March.

JD Sports rises on acquisition, Purplebricks tanks on board’s warning

On London’s equity markets, DCC fell 3.35% after it announced that its chief executive Donal Murphy would be taking several weeks off to address a medical condition.

Victrex lost 7.89% after its first-half revenues fell below expectations, while Marshalls slid 6.27% after the landscaping materials group cut its annual guidance due to weak sales, caused by a reduction in new house building and private housing maintenance activity.

Direct Line Insurance Group declined 6.2% after it reported rising claims in its motor segment that would put pressure on earnings this year, despite a rise in renewal premiums in the first quarter.

On the upside, JD Sports Fashion rallied 1.62% following the announcement that it had agreed to buy French sportswear retailer Courir in a €520m deal.

Travel stocks also experienced gains, with TUI and Carnival rising by 5.91% and 8.65% respectively, continuing their momentum from Norwegian Cruise Line's positive results last week.

Outside the FTSE 350, Purplebricks Group tanked 65.69% after the estate agent announced it no longer expected to generate cash in early 2024, and warned that any potential sale of the business would deliver returns to shareholders "materially below" the current share price.

Reporting by Josh White for Sharecast.com.

FTSE 100 -14.29 (-0.18%) 7,764.09

RISERS
International Consolidated Airlines Group +3.52% 155.8p
Flutter Entertainment +2.26% 15,820p
Relx +1.85% 2,479p
Beazley +1.55% 590.5p
InterContinental Hotels Group +1.48% 5,492pp
Hiscox +1.48% 1,162p
Imperial Brands +1.21% 1,923p
JD Sports Fashion +1.17% 164.55p
NatWest Group +0.96% 261.8p
WPP +0.95% 897.4p

FALLERS
Unite Group -4.52% 908.5p
Ocado Group -4.14% 475p
Land Securities Group -3.18% 644.6p
DCC -3.1% 4,714p
British Land -2.86% 386.9p
Auto Trader Group -2.67% 625.8p
Spirax-Sarco Engineering -2.62% 11,145p
Segro -2.54% 806.8p
Rightmove -2.35% 566.2p
Persimmon -2.34% 1,335.5p

FTSE 250 -175.46 (-0.9%) 19,277.04

RISERS
Carnival +6.12% 745.4p
TUI +5.91% 562.4p
Virgin Money UK +3.5% 149.5p
Digital 9 Infrastructure +2.83% 65.5p
Marks & Spencer Group +2.09% 168.2p
Bank of Georgia Group +1.81% 3,090p
Playtech +1.8% 595p
OSB Group +1.64% 495p
Lancashire Holdings +1.51% 605.5p
Mitchells & Butlers +1.46% 180.8p

FALLERS
Victrex -9.62% 1,504p
ASOS -8.75% 635.8p
Marshalls -8.72% 272p
Genus -7.21% 2,574p
Genuit Group -5.31% 294.5p
Great Portland Estates -5.24% 506.5p
Tritax Big Box -5.2% 145.9p
Direct Line Insurance Group -4.59% 156.8p
Aston Martin Lagonda Global Holdings -4.56% 209.2p
IP Group -4.55% 52.5p