London close: Stocks weaker amid Gaza tensions, hot US producer prices

Stocks in London ended in the red on Wednesday, impacted by heightened concerns regarding global inflation and ongoing situations in the Middle East.

New data on US producer prices were also in focus, coming in hotter than anticipated, indicating a moderate mitigation in underlying inflation for September.

The FTSE 100 was down 0.11% at 7,620.03, while the FTSE 250 saw a decline of 0.51% to settle at 17,876.24.

In currencies, sterling was last up 0.11% on the dollar to trade at $1.2300, while it inched up 0.03% against the euro to change hands at €1.1589.

“European markets appear to be pausing for breath after the downs and ups at the start of the week, with the DAX and FTSE 100 trying to push higher, while the CAC 40 has struggled due to weakness in the luxury sector after a profit warning from LVMH,” said CMC Markets chief market analyst Michael Hewson.

“Luxury goods brand LVMH has fallen to its lowest levels since December last year after reporting a softening of demand in its third quarter numbers released last night.

“This underwhelming update has seen the likes of Burberry, Richemont and Hermes all slide back as well over concern that this weakness could be a sign of things to come for the sector.”

US wholesale prices ascend while German inflation tempers

In economic news, US wholesale prices in September showed a steeper climb than analysts had expected, according to fresh data from the US Department of Labor.

In a month-over-month comparison and under seasonally adjusted conditions, final demand prices revealed a 0.5% elevation, exceeding the consensus of a 0.3% incline.

Energy costs primarily drove the rise, with a notable 3.3% jump, while food costs recorded a 0.9% increment.

Trade services prices, encompassing retailers’ margins, saw a 0.5% uptick during the same period.

Year-on-year, the total final demand price accelerated from 2.0% in August to 2.2% in September.

On the continent, inflation in Germany reached its nadir since the start of the Ukraine conflict, as per data released from the federal statistics office, Destatis.

The annual consumer price index (CPI) came in at 4.5%, corroborating preliminary estimates and marking a modest 0.3% rise from the prior month.

Destatis said the harmonised index of consumer prices (HICP) - calculated via a methodology used across European Union nations - was registered at 4.3%, or a 0.2% elevation from its August level.

“The rate of inflation has dropped to the lowest level since the start of the war in Ukraine,” said Ruth Brand, president of Destatis.

“It remains high, however. Consumers are still clearly feeling the higher food prices.”

Luxury and fashion sectors struggle on mixed day for stocks

On London’s equity markets, Burberry Group took a 2.7% dip after LVMH announced 9% organic revenue growth in the third quarter, falling short of the anticipated 11.2% by analysts and casting a shadow on the luxury retail sector.

The general clothing retail sector wasn’t spared either, with JD Sports Fashion down 3.85%, Frasers Group off 1.6%, Next losing 2.1%, and Marks and Spencer Group 1.64% weaker.

Next was in focus amid reports it was finalising an acquisition of FatFace three years after a takeover by its lenders.

Sky News said any deal was expected to be announced later in the week.

Construction and DIY retailer Kingfisher saw a 1.88% decline following a profit warning from builders merchant Travis Perkins, which saw its shares tumble by 6.74%.

In the energy sector, Energean experienced a 9.27% drop amid ongoing concerns regarding the Israel-Palestine conflict.

Recruitment firm PageGroup lost 3.49% after saying it expected a full-year profit drop of up to 36% due to challenging conditions across Asia, the UK, and the US markets.

On the upside, BAE Systems ticked ahead 1.34% following an upgrade to ‘buy’ at DZ Bank.

Mitie Group enjoyed a 4.65% surge after it announced solid top-line growth in the first half, crediting recent acquisitions and projecting a revenue increase of 17% over the full fiscal year.

Transport operator FirstGroup gained 3.89% after announcing expectations of boosted full-year profits in its rail and bus divisions due to stronger-than-expected demand and robust passenger volumes, alongside other corporate actions.

The group’s 2024 adjusted operating and attributable profits were now expected to outdo previous board expectations by £14m to £20m and £7m to £10m, respectively, with a projected year-end adjusted net cash position of between £20m and £30m.

In the mining sector, Endeavour Mining added 0.9% after it reported encouraging progress at its key Côte d’Ivoire project.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,620.03 -0.11%
FTSE 250 (MCX) 17,876.24 -0.51%
techMARK (TASX) 4,196.16 -0.12%

FTSE 100 - Risers

Imperial Brands (IMB) 1,755.00p 1.86%
M&G (MNG) 201.10p 1.64%
Unite Group (UTG) 927.00p 1.59%
Rightmove (RMV) 592.80p 1.51%
United Utilities Group (UU.) 974.20p 1.46%
Prudential (PRU) 907.80p 1.41%
Halma (HLMA) 1,945.00p 1.30%
Severn Trent (SVT) 2,422.00p 1.30%
SEGRO (SGRO) 745.00p 1.25%
BAE Systems (BA.) 1,054.00p 1.25%

FTSE 100 - Fallers

Convatec Group (CTEC) 206.20p -3.91%
JD Sports Fashion (JD.) 138.60p -3.85%
Smith & Nephew (SN.) 944.20p -3.73%
Burberry Group (BRBY) 1,777.00p -3.19%
Kingfisher (KGF) 212.40p -2.48%
Next (NXT) 6,876.00p -2.27%
Ocado Group (OCDO) 587.60p -2.07%
Marks & Spencer Group (MKS) 221.00p -1.95%
Entain (ENT) 946.60p -1.60%
Haleon (HLN) 335.50p -1.38%

FTSE 250 - Risers

Essentra (ESNT) 180.00p 7.27%
Mitie Group (MTO) 102.80p 3.84%
FirstGroup (FGP) 151.90p 3.69%
Baltic Classifieds Group (BCG) 189.80p 2.59%
Supermarket Income Reit (SUPR) 77.00p 2.53%
Safestore Holdings (SAFE) 742.50p 2.41%
Big Yellow Group (BYG) 995.50p 2.31%
Workspace Group (WKP) 480.00p 2.13%
Empiric Student Property (ESP) 89.00p 2.06%
Abrdn (ABDN) 164.05p 2.05%

FTSE 250 - Fallers

Energean (ENOG) 837.50p -10.28%
Travis Perkins (TPK) 756.00p -6.16%
Watches of Switzerland Group (WOSG) 502.50p -5.81%
888 Holdings (DI) (888) 89.50p -5.04%
Dr. Martens (DOCS) 129.40p -4.85%
Howden Joinery Group (HWDN) 675.20p -4.77%
Grafton Group Ut (CDI) (GFTU) 828.90p -4.65%
PureTech Health (PRTC) 181.00p -4.13%
Marshalls (MSLH) 220.20p -4.09%
Harbour Energy (HBR) 249.70p -3.52%