London close: UK stocks, sterling extend gains

London stocks were in the black again with sentiment boosted by US rate cut hopes.

In the background meanwhile, investors turned their attention to bank earnings and the start of the second quarter corporate earnings reporting season across the pond.

The FTSE 100 was up 0.36% at 8,252.91 and the second-tier index by 0.01% at 21,202.89.

Sterling continued to push higher, jumping by 0.57% to 1.2988.

US producer price data for June came in ahead of forecasts, but the details of the report pointed to a slowdown in the core price deflator for personal consumption expenditures, the Fed's preferred price gauge.

Indeed, for economists at Capital Economics, not only was a rate cut in September likely, but also one in July was no longer off the table.

To take into account, for some strategists the actual start of rate cuts could signal the start of weakness in the US stock market. However, for others a shift in the interest rate cycle stood to benefit so-called 'value' stocks, which predominated in the UK market.

UK corporate news was scarce, but Ashmore drifted lower as it said assets under management declined in the last quarter on the back of weaker investor sentiment.

The FTSE 250 firm, a specialist in emerging markets, said AUM fell by $2.4bn in fourth quarter to 30 June to $49.5bn.

Within that, the negative investment performance was $0.4bn while net outflows were $2bn, unchanged on the previous quarter.

Ashmore attributed the level of net outflows to institutional decisions to reduce exposure to emerging markets, with investor risk appetite remaining "subdued".

On the upside, Smurfit Westrock was a top gainer after JPMorgan Cazenove initiated coverage of the shares with an ‘overweight’ rating and $66 price target, adding the stock to its ‘Analyst Focus List’ and naming it "top pick" in the sector.

"In our view, the cycle is at the early stages of a recovery with current prices still below through the cycle levels (especially once marginal producer margins are considered)," JPM said.

The bank also said it sees significant scope to improve the business - beyond announced synergies - through integration and targeted mill improvement.

Corrugated and paper-based packaging firm Smurfit Westrock was recently formed through the merger of Dublin-based Smurfit Kappa and Atlanta-based Westrock.

Market Movers

FTSE 100 (UKX) 8,252.91 0.36%
FTSE 250 (MCX) 21,202.89 0.07%
techMARK (TASX) 4,847.91 0.45%

FTSE 100 - Risers

Rightmove (RMV) 580.00p 4.04%
Smurfit Westrock (DI) (SWR) 3,660.00p 3.92%
Spirax Group (SPX) 8,950.00p 2.81%
Frasers Group (FRAS) 875.00p 2.76%
Next (NXT) 9,108.00p 2.22%
Marks & Spencer Group (MKS) 309.60p 2.01%
Antofagasta (ANTO) 2,225.00p 1.97%
Flutter Entertainment (DI) (FLTR) 15,925.00p 1.79%
Croda International (CRDA) 4,074.00p 1.75%
Taylor Wimpey (TW.) 157.05p 1.65%

FTSE 100 - Fallers

United Utilities Group (UU.) 1,057.00p -3.38%
International Consolidated Airlines Group SA (CDI) (IAG) 174.00p -2.19%
Rentokil Initial (RTO) 464.00p -2.19%
Severn Trent (SVT) 2,652.00p -2.06%
Centrica (CNA) 137.75p -1.78%
Airtel Africa (AAF) 118.50p -1.25%
Prudential (PRU) 732.00p -1.05%
Sainsbury (J) (SBRY) 265.20p -1.04%
Darktrace (DARK) 575.60p -1.00%
Vodafone Group (VOD) 70.52p -0.98%

FTSE 250 - Risers

Genus (GNS) 1,848.00p 4.52%
Trustpilot Group (TRST) 232.50p 4.49%
North Atlantic Smaller Companies Inv Trust (NAS) 4,100.00p 3.27%
Baltic Classifieds Group (BCG) 277.00p 3.17%
Pets at Home Group (PETS) 307.00p 2.40%
Genuit Group (GEN) 483.00p 2.33%
Playtech (PTEC) 530.00p 2.32%
Premier Foods (PFD) 172.20p 2.26%
Dr. Martens (DOCS) 76.50p 2.20%
Ibstock (IBST) 192.00p 2.13%

FTSE 250 - Fallers

Indivior (INDV) 814.50p -3.38%
Workspace Group (WKP) 625.00p -3.10%
Wood Group (John) (WG.) 198.90p -2.79%
NCC Group (NCC) 151.20p -2.45%
Close Brothers Group (CBG) 486.40p -2.45%
Endeavour Mining (EDV) 1,811.00p -2.27%
Direct Line Insurance Group (DLG) 189.10p -2.17%
Hochschild Mining (HOC) 189.80p -2.06%
Supermarket Income Reit (SUPR) 74.50p -1.97%
Pennon Group (PNN) 666.00p -1.91%