London close: Stocks finish firmer at start of busy week

Investors appeared optimistic as they set their sights on a week set to be bustling with market activity.

The FTSE 100 climbed by 0.25%, ending the day at 7,496.87, while the FTSE 250 registered a gain of 0.32%, closing at 18,522.44.

In currency markets, sterling was last up 0.48% on the dollar, trading at $1.2528, while it managed a slight rise of 0.08% against the euro to change hands at €1.1660.

“Gains in futures this morning had come mainly from more optimistic talk of a soft landing in the US, and by Morgan Stanley’s bullish Tesla upgrade, but this has proven a shaky foundation for a sustainable rally,” said IG chief market analyst Chris Beauchamp.

“Today’s generally quiet session means that attention is focusing squarely on the US CPI data and ECB decision due this week, and with the risk that both could deliver nasty surprises, risk appetite has been limited.”

European Commission revises economic projections amid slower growth

In economic news, the European Commission tempered its growth projections for the eurozone and the entire 27-nation European Union in its summer forecast.

The report asserted that the EU economy was continuing to grow, albeit at a muted pace, with the updated figures showing a growth rate of 0.8% for the bloc in 2023, a decrease from the 1% initially projected in the spring forecast.

Likewise, 2024's growth forecast was reduced from the earlier prediction of 1.7% to 1.4%.

For nations within the eurozone, growth expectations were adjusted to 0.8% for 2023 and 1.3% for 2024, down from the spring's 1.1% and 1.6%, respectively.

“The EU avoided a recession last winter - no mean feat given the magnitude of the shocks that we have faced,” said European Commissioner for the Economy, Paolo Gentiloni.

“This resilience, most evident in the strength of the labour market, is a testimony to the effectiveness of our common policy response.

“However, the multiple headwinds facing our economies this year have led to a weaker growth momentum than we projected in the spring.”

Meanwhile, Germany, Europe's largest economy, was bracing for an economic contraction with the EC’s quarterly update highlighting the likelihood of the economy shrinking by 0.4% this year.

That starkly contrasted with the earlier projection for growth of 0.2%.

“Latest data confirms that economic activity in the EU was subdued in the first half of 2023 on the back of the formidable shocks that the EU has endured,” the commission said.

“Weakness in domestic demand, in particular consumption, shows that high and still increasing consumer prices for most goods and services are taking a heavier toll than expected in the spring forecast.

“This is despite declining energy prices and an exceptionally strong labour market, which has seen record low unemployment rates, continued expansion of employment and rising wages.”

On the other side of the globe, China reported a rebound in consumer inflation in August.

Official data released over the weekend revealed a 0.1% annualised rise in consumer prices, a modest recovery following a drop into negative territory the previous month.

Although this growth was slightly below the anticipated 0.2% increase, core inflation, which strips out the unpredictable food and energy prices, rose by 0.8%.

Mining stocks soar as Vistry Group announces operational merger

On London’s equity markets, major mining names were among the highlights as Anglo American rose 2.55%, Antofagasta added 3.17%, Rio Tinto grew 3.67%, and Glencore saw its price advance 2.48%.

The upward trend was put down to a boost in metal prices, following the release of Chinese inflation data and the unexpected surge in China’s new bank loans for August.

Vistry Group rocketed 14.66% after the housebuilder announced plans to merge its housebuilding operations with its partnerships business by the end of the year.

Along with that, Vistry set new medium-term earnings goals, aiming for a 40% return on capital employed, an annual revenue growth of 5% to 8%, and operating profit of £800m.

Despite the optimistic outlook, Vistry reported a decline of 8.4% in its adjusted half-year pre-tax profits, which stood at £174m.

The drop was attributed to the challenging housing market dynamics where rising mortgage costs had led to falling housing prices.

Other housebuilding peers were in the green, with Taylor Wimpey up 1.68%, Barratt Developments ahead 1.42%, and Persimmon rising 2.06%.

In response to a 'buy' initiation by Bank of America Merrill Lynch, Babcock International's shares rose by 2.81%.

On the downside, however, Melrose Industries decreased 5.29% after RBC Capital Markets downgraded the stock from 'outperform' to 'sector perform'.

Syncona took a hit of 5.47% as the company announced Novartis' decision to halt the development of its experimental eye treatment, GT005.

The move would lead to a milestone payments write-off amounting to £54.5m for Gyroscope Holdings, in which Syncona holds a 54% stake.

Outside the FTSE 350, Restaurant Group gained 3.37% after announcing its exit from its underperforming leisure business, transferring 75 trading sites, including brands like Frankie & Benny’s and Chiquito, to the Big Table Group.

Internationally, American electric car giant Tesla was last up 9.07% after Morgan Stanley upgraded its rating to 'overweight' and increased the price target from $250 to $400.

According to Morgan Stanley, Tesla’s supercomputer ‘Dojo’ had the potential to add up to $500bn to the company’s enterprise value, making Tesla its new "top pick".

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,496.87 0.25%
FTSE 250 (MCX) 18,522.44 0.32%
techMARK (TASX) 4,326.89 0.07%

FTSE 100 - Risers

Fresnillo (FRES) 580.00p 4.62%
Rio Tinto (RIO) 5,001.00p 3.44%
Antofagasta (ANTO) 1,509.50p 2.93%
Vodafone Group (VOD) 75.13p 2.61%
M&G (MNG) 198.25p 2.40%
Anglo American (AAL) 2,071.50p 2.40%
Smurfit Kappa Group (CDI) (SKG) 3,068.00p 2.33%
Glencore (GLEN) 435.35p 2.19%
Persimmon (PSN) 1,037.00p 1.87%
Haleon (HLN) 324.80p 1.87%

FTSE 100 - Fallers

Melrose Industries (MRO) 485.50p -4.95%
AstraZeneca (AZN) 10,502.00p -3.17%
Ocado Group (OCDO) 808.20p -2.25%
Endeavour Mining (EDV) 1,520.00p -2.19%
Croda International (CRDA) 5,142.00p -1.87%
IMI (IMI) 1,473.00p -1.34%
Compass Group (CPG) 2,024.00p -1.22%
Spirax-Sarco Engineering (SPX) 9,876.00p -1.08%
Rightmove (RMV) 557.00p -1.03%
Entain (ENT) 1,162.00p -0.94%

FTSE 250 - Risers

Vistry Group (VTY) 900.50p 12.56%
Jupiter Fund Management (JUP) 96.25p 2.94%
Hipgnosis Songs Fund Limited NPV (SONG) 94.90p 2.82%
Molten Ventures (GROW) 247.60p 2.74%
Vanquis Banking Group 20 (VANQ) 120.00p 2.56%
TUI AG Reg Shs (DI) (TUI) 476.60p 2.54%
Tritax Eurobox (GBP) (EBOX) 53.90p 2.47%
Auction Technology Group (ATG) 707.00p 2.46%
Lancashire Holdings Limited (LRE) 588.50p 2.35%
Morgan Sindall Group (MGNS) 2,025.00p 2.27%

FTSE 250 - Fallers

Syncona Limited NPV (SYNC) 121.00p -5.47%
Playtech (PTEC) 508.00p -4.33%
Wizz Air Holdings (WIZZ) 1,960.50p -4.09%
Senior (SNR) 169.00p -3.76%
W.A.G Payment Solutions (WPS) 88.00p -3.30%
Direct Line Insurance Group (DLG) 176.00p -3.03%
Baltic Classifieds Group (BCG) 192.40p -3.02%
NCC Group (NCC) 94.80p -1.76%
Moneysupermarket.com Group (MONY) 244.00p -1.69%
Smithson Investment Trust (SSON) 1,337.00p -1.55%