London close: Benchmark finishes lower as investors pore through data

The FTSE 100 ended the session down 0.19% at 6,157.96, but the FTSE 250 closed in the green, rising 0.41% to 17,189.43.

Sterling was stronger against both of its major trading pairs, last rising 0.51% on the dollar to $1.2464, and adding 0.23% against the euro to €1.1065.

“Supermarkets and miners sit at the bottom of the FTSE 100 today - a slightly unusual pairing,” said Chris Beauchamp, chief market analyst at IG.

“The former have failed to find much good news in Sainsbury’s update, which like Tesco found increased costs ate away at potential profits from rising sales.”

Beauchamp said that, once again the share price for the UK’s second supermarket found the 215p level “too rich for its liking”, the firm being unable to find a catalyst that could offset expectations of higher costs in the medium term.

“UK mining stocks have also failed to continue their recent move higher, worrying that the huge rallies in their share prices since March now leave them fully-valued and at risk of a downturn in data.”

Overnight, the US government's top epidemiologist, Anthony Fauci, warned of the risk that the daily rate of new Covid-19 infections might reach 100,000 in the near future.

However, he also sounded a "cautiously optimistic" note around prospects for a vaccine while calling attention to the fact that approximately half of new cases were centred in only four states - Arizona, California, Florida and Texas.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, concurred with Fauci's assessment, estimating that the rate of daily new infections in the US might reach 100,000 by 23 July.

However, he added that he was increasingly hopeful that might not come to pass, pointing to a slowdown in the rate of new infections last week to 27.2% - the lowest since 19 June.

“[This] suggests that changes in people's behaviour in the worst-hit states, even before restrictions on bars and restaurants were reimposed, are starting to suppress the spread of the virus.”

Closer to home, the latest survey from Nationwide showed house prices fell in June for the first time since 2012, as the pandemic took its toll.

On an yearly basis, house prices dipped 0.1%, following a 1.8% increase in May, and failing to meet expectations for 1% growth.

Month-on-month, prices were 1.4% lower, which was an improvement on the 1.7% drop seen in May, but worse than the 0.7% decline expected.

Nationwide’s chief economist Robert Gardner the drop was to be expected given the "unprecedented" 25% fall in economic output over March and April.

"Housing market activity also slowed sharply as a result of lockdown measures implemented to control the spread of the virus," he added.

"While latest data from HMRC showed a slight pickup in residential property transactions from April’s low, in May they were still 50% lower than the same month in 2019."

Also on the economic front, IHS Markit confirmed a rebound in its manufacturing purchasing managers' index from a reading of 40.7 for May to 50.1 in June.

However, the survey compiler sounded a note of caution due to the risk of job losses once government support measures start to be phased out.

In equity markets, John Laing slid 10.51% after it said first-half net asset value before deducting dividends was expected to show a single-digit decline as investment activity was hampered by the coronavirus lockdown.

Sainsbury’s sank 2.48% even after the supermarket chain reported an 8.2% rise in first-quarter like-for-like sales, driven by groceries, as Britons stocked up during the coronavirus lockdown.

SSP lost 2.26% after saying it was looking to slash 5,000 jobs in the UK as it dealt with the collapse in air travel due to the pandemic.

The company, which operates food outlets at airports and railway stations, said it expected only 20% of stores to be open by the autumn.

British Airways and Iberia owner IAG slipped 1.35%, dragged down by the risk of a second wave of Covid-19 in the US.

On the upside, Smith & Nephew added 4.48% as it said it expects second-quarter revenue to drop around 29% but noted an improving performance as the quarter progressed.

B&M European Value Retail gained 4.91% as it hailed a "strong" first quarter, with a particularly pleasing performance in the UK, where revenue rose 33.7%.

In broker note action, Hargreaves Lansdown was knocked 5.5% lower by a downgrade to ‘sell’ at Citi, while Close Brothers was boosted 1.27% by an upgrade to ‘outperform’ at RBC Capital Markets.

Market Movers

FTSE 100 (UKX)6,157.96-0.19%
FTSE 250 (MCX)17,189.430.41%
techMARK (TASX)3,721.170.43%

FTSE 100 - Risers

Smith & Nephew (SN.)1,580.50p4.98%
Burberry Group (BRBY)1,646.50p2.94%
Associated British Foods (ABF)1,964.50p2.58%
Melrose Industries (MRO)116.80p2.46%
Compass Group (CPG)1,138.50p2.38%
InterContinental Hotels Group (IHG)3,643.00p2.13%
Experian (EXPN)2,861.00p1.49%
SEGRO (SGRO)908.00p1.45%
Land Securities Group (LAND)561.00p1.45%
Royal Dutch Shell 'A' (RDSA)1,304.60p1.37%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.)1,545.50p-5.10%
ITV (ITV)71.58p-4.15%
Evraz (EVR)278.80p-3.33%
Polymetal International (POLY)1,563.50p-3.22%
Smith (DS) (SMDS)318.10p-3.08%
Taylor Wimpey (TW.)138.75p-2.70%
BT Group (BT.A)111.00p-2.67%
Anglo American (AAL)1,824.80p-2.39%
Sainsbury (J) (SBRY)203.80p-2.35%
Rio Tinto (RIO)4,448.00p-2.22%

FTSE 250 - Risers

Liontrust Asset Management (LIO)1,415.00p8.43%
Hammerson (HMSO)85.72p6.80%
B&M European Value Retail S.A. (DI) (BME)417.00p4.91%
Centrica (CNA)40.34p4.67%
UK Commercial Property Reit Limited (UKCM)62.50p4.52%
Petropavlovsk (POG)26.10p3.98%
Equiniti Group (EQN)150.80p3.71%
Meggitt (MGGT)305.20p3.70%
Oxford Biomedica (OXB)726.00p3.57%
Carnival (CCL)1,020.50p3.52%

FTSE 250 - Fallers

John Laing Group (JLG)315.20p-9.53%
Energean (ENOG)580.00p-5.69%
Royal Mail (RMG)172.25p-5.49%
Future (FUTR)1,210.00p-5.17%
Ferrexpo (FXPO)164.50p-5.13%
Oxford Instruments (OXIG)1,362.00p-4.76%
WH Smith (SMWH)1,050.00p-4.28%
National Express Group (NEX)180.50p-3.37%
Go-Ahead Group (GOG)805.00p-3.25%
Kaz Minerals (KAZ)484.00p-3.20%