London close: Ex-dividends, interest rate concerns drag on stocks
Thursday trading on London’s stock markets ended in the red, as a newly declared recession in the eurozone and escalating concerns over interest rates cast a pall over investors’ sentiment.
The FTSE 100 index was down by 0.32% to close at 7,599.74, while the FTSE 250 retreated by 0.23%, ending the day at 19,107.55.
In currencies, sterling was last 0.85% stronger on the dollar to trade at $1.2544, while it managed gains of 0.09% against the euro to change hands at €1.1636.
“Given the swathe of ex-dividend names today it is not surprising that the FTSE 100 continues to struggle,” said IG chief market analyst Chris Beauchamp.
“A recovery in the pound against the dollar has also hampered the index, putting it on the back foot against other indices that have shown signs of strength.”
UK house market rebounds as eurozone enters recession
In economic news, a fresh survey from the Royal Institution of Chartered Surveyors (RICS) showed the UK housing market rebounding in demand and finalised sales in May.
The index monitoring new buyer interest, while remaining below zero at -18, showed a notable improvement from April’s -34.
Similarly, the agreed sales index showed progress, moving up to -7 from the preceding month’s -18, and significantly better than March’s -29.
Despite ongoing reductions in house prices, indicated by a net balance of -30, this was a marked improvement on both February’s -46 and April’s -39, surpassing analysts’ expectations of -38.
On the continent, the eurozone economy fell into a technical recession, as per the latest official data released earlier.
Eurostat, the EU’s statistics office, reported a 0.1% decline in GDP for the first quarter, a downward revision from the previously estimated growth of 0.1%.
That followed a similar contraction of 0.1% in the fourth quarter of 2022, fulfilling the criteria for a technical recession – two consecutive quarters of negative growth.
The year-on-year first-quarter GDP rose by a modest 1%.
Across the wider EU, GDP rose by 0.1% in the first quarter and saw a year-on-year rise of 1%.
Finally on data, the United States labour market experienced an uptick in jobless claims, the highest since October 2021, signaling an easing labour market tension.
The US Department of Labor reported that the number of first-time unemployment claims, in seasonally adjusted terms, increased by 28,000 for the week ending on June 3, reaching 261,000.
That was notably higher than economists’ anticipated increase to 235,000 from the previously estimated 232,000.
The four-week moving average for claims also rose, up by 7,500 to 237,250.
Ex-dividends a drag, FirstGroup charges ahead
On London’s equity markets, housebuilder Crest Nicholson was among the leading fallers, with shares plummeting 7.14% after it reported a drop in profits and warned that rising interest rates would dampen the property market.
Also among the day’s significant fallers was Vodafone Group, which lost 5.52% as it went ex-dividend.
Supermarket chain J Sainsbury also faced a setback, its shares dropping 3.78%.
Advertising giant WPP saw a 2.44% decrease in its share price, while speciality chemicals and sustainable technologies company Johnson Matthey experienced a 2.17% slip.
Iconic footwear company Dr. Martens saw its shares drop 5.29%, while refractory products supplier RHI Magnesita was down 2.82% - all of those stocks also losing their entitlement to the dividend.
On the upside, mining giant Rio Tinto’s shares were up 0.47% following an upgrade from ‘neutral’ to ‘buy’ at Citi.
Likewise, NatWest Group shares increased by 0.35% after JPMorgan placed the company’s shares on ‘positive catalyst’ watch.
Among the day’s biggest winners was transport operator FirstGroup, with shares surging by a remarkable 13.9%.
The jump came after the company reported a full-year operating profit that exceeded expectations and announced an extension to its share buyback programme, both factors driving optimism among investors.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 7,599.74 -0.32%
FTSE 250 (MCX) 19,107.55 -0.23%
techMARK (TASX) 4,561.31 -0.57%
FTSE 100 - Risers
Hargreaves Lansdown (HL.) 857.60p 3.10%
Entain (ENT) 1,297.00p 1.41%
Antofagasta (ANTO) 1,461.50p 1.00%
Airtel Africa (AAF) 128.00p 0.95%
BAE Systems (BA.) 938.80p 0.88%
Ashtead Group (AHT) 5,330.00p 0.83%
3i Group (III) 1,998.00p 0.81%
CRH (CDI) (CRH) 3,916.00p 0.80%
Abrdn (ABDN) 216.40p 0.65%
Pershing Square Holdings Ltd NPV (PSH) 2,816.00p 0.64%
FTSE 100 - Fallers
Vodafone Group (VOD) 74.15p -5.52%
Sainsbury (J) (SBRY) 267.50p -3.78%
WPP (WPP) 865.00p -2.44%
Johnson Matthey (JMAT) 1,758.00p -2.17%
Endeavour Mining (EDV) 2,042.00p -1.92%
JD Sports Fashion (JD.) 151.00p -1.88%
Beazley (BEZ) 595.00p -1.82%
Reckitt Benckiser Group (RKT) 6,114.00p -1.80%
Croda International (CRDA) 6,024.00p -1.54%
Frasers Group (FRAS) 689.00p -1.50%
FTSE 250 - Risers
FirstGroup (FGP) 135.20p 13.90%
Apax Global Alpha Limited (APAX) 172.00p 4.88%
National Express Group (NEX) 117.60p 4.63%
Clarkson (CKN) 3,100.00p 4.20%
TI Fluid Systems (TIFS) 134.20p 3.88%
Mitie Group (MTO) 99.50p 3.22%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 285.50p 2.88%
Investec (INVP) 458.80p 2.48%
PureTech Health (PRTC) 241.50p 2.33%
Kainos Group (KNOS) 1,296.00p 2.05%
FTSE 250 - Fallers
Crest Nicholson Holdings (CRST) 231.60p -7.14%
Dr. Martens (DOCS) 127.40p -5.29%
Wizz Air Holdings (WIZZ) 2,649.00p -4.43%
Warehouse Reit (WHR) 90.40p -4.24%
Tate & Lyle (TATE) 759.00p -4.17%
Morgan Advanced Materials (MGAM) 282.50p -3.75%
Vanquis Banking Group 20 (VANQ) 222.00p -3.48%
Ithaca Energy (ITH) 146.00p -3.31%
Tullow Oil (TLW) 25.74p -3.31%
Hammerson (HMSO) 26.04p -2.91%