London close: Stocks finish higher ahead of US Fed

The FTSE 100 index gained 0.38%, finishing at 8,309.86 points, while the FTSE 250 also edged upward, closing 0.07% higher at 20,944.60 points.

In currency markets, sterling was down 0.4% on the dollar to last trade at $1.3163, while it fell 0.27% against the euro, changing hands at €1.1839.

“Equity indices continue their bullish run with the Dow once more trading in record highs and the S&P 500 within a whisker of an all-time high,” said Axel Rudolph at IG.

“Despite German ZEW investor morale falling to an 11-month low, the DAX 40 also added around half a percentage point.

“Unexpectedly rising US August retail sales not only boosted stocks but also triggered a rebound in US Treasury yields from their one-to-two year lows.”

Rudolph noted that a near 8% recovery rally in crude oil prices from last week’s 16-month low came as the latest CFTC Commitment of Traders report showed that traders were the least bullish on oil in more than a decade.

“West Texas Intermediate is trading back around the $70 per barrel mark as Brent crude oil flirts with the $73 level.

“The gold price remains close to Monday's record high, made near the psychological $2,600 per troy ounce mark, amid more probable central bank buying.”

Retail sales grow at a slower pace in the US, German business sentiment deteriorates

In economic news, US retail sales saw a slight uptick in August, although consumers remained cautious in their spending due to challenging economic conditions.

The US Census Bureau reported that advance retail and food services sales reached $710.8bn last month, marking a 0.1% increase from July.

While that was down from the revised 1.1% growth in July - the highest since early 2023 - it surpassed economists' expectations of a 0.2% decline.

Excluding the often-volatile categories of motor vehicles, parts dealers, and gasoline stations - which contributed $134bn and $52bn respectively - retail sales actually rose by 0.2%.

Sectors such as furniture and home goods, food and beverage stores, and clothing retailers each experienced a 0.7% decline in sales.

Electronics and appliance stores saw a sharper drop of 1.1%.

Those decreases were offset by a robust 1.4% increase in online sales and gains in smaller retail categories.

Closer to home, German business sentiment deteriorated more than anticipated in September.

The ZEW Center for European Economic Research reported that its economic sentiment indicator fell sharply to 3.6, down 15.6 points from August's reading and significantly below the projected 17.1.

Its assessment of the current economic situation also worsened, declining 7.2 points to -84.5 - the lowest level since May 2020.

“The hope for a swift improvement in the economic situation is visibly fading,” said ZEW president Achim Wambach.

“In the latest survey, we once again observe a noticeable decline in economic expectations for Germany.

“The number of optimists and pessimists is now evenly balanced.”

Kingfisher jumps on revised guidance, Essentra tumbles

On London’s equity markets, Kingfisher surged 11.23% after the owner of B&Q and Castorama raised the lower end of its full-year adjusted pre-tax profit forecast.

The company now expected profits between £510m and £550m, up from the previous range of £490m to £550m.

That adjustment came as Kingfisher reported interim results in line with expectations, with pre-tax profit for the six months ending 31 July increasing by 2.3% to £324m.

Elsewhere, Wizz Air Holdings climbed 9.23% on reports that the budget airline anticipated 15% to 20% growth in passenger volume next year.

Chief executive officer Jozsef Varadi attributed the optimistic outlook to new low-cost routes to the Middle East, including services from Europe to the United Arab Emirates, which were expected to provide an additional boost.

Elsewhere in the aviation sector, easyJet and International Consolidated Airlines Group rose 6.18% and 3.41%, respectively.

Those gains followed comments from Ryanair chief Michael O’Leary, who told Reuters that the airline had seen improved booking momentum since August, indicating a potential uplift for the industry.

Private equity firm Bridgepoint Group advanced 4.13% after Jefferies raised its price target on the stock from 320p to 400p.

The investment bank's upgrade came ahead of Bridgepoint's capital markets day next month.

On the downside, Playtech fell 5.18% after the gambling technology firm agreed to sell its Italian business, Snaitech, to Flutter Entertainment for €2.3bn in cash.

The decline came despite a sharp rise in Playtech's shares on Monday, when it announced a revised deal with Mexican gambling operator Caliente Interactive and projected annual adjusted earnings slightly ahead of expectations.

British American Tobacco dipped 2.36% after it unveiled leadership changes aimed at accelerating its transition to a smoke-free future and enhancing sustainability.

The company appointed Kingsley Wheaton to the newly-created position of chief corporate officer, effective immediately.

Essentra tumbled 15.19% after warning that its full-year adjusted operating profit would fall below market expectations.

The company cited softer market conditions in Europe and a slower-than-expected recovery in the Americas as key factors impacting its performance.

THG declined 12.37% following confirmation that the e-commerce firm was “actively undertaking detailed work” to explore the demerger of its technology services arm, THG Ingenuity.

JTC slid 4.59% after releasing its financial results, while Auction Technology Group gave up earlier gains to close down 0.13%.

That came despite an upgrade to ‘overweight’ from ‘neutral’ by JPMorgan Cazenove, which noted that the shares were overly discounting earnings risk into 2025.

Compass Group edged lower by 0.16% after RBC Capital Markets downgraded the caterer's shares to ‘sector perform’ from ‘outperform’.

RBC said that while Compass remained a strong company with structural growth characteristics and a defensive earnings profile, the shares were now trading ahead of its unchanged price target of 2,400p and their 10-year average price-to-earnings ratio.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,309.86 0.38%
FTSE 250 (MCX) 20,944.60 0.07%
techMARK (TASX) 4,855.59 -0.88%

FTSE 100 - Risers

Kingfisher (KGF) 322.90p 11.23%
easyJet (EZJ) 515.80p 6.18%
JD Sports Fashion (JD.) 159.70p 3.50%
International Consolidated Airlines Group SA (CDI) (IAG) 206.40p 3.41%
Smurfit Westrock (DI) (SWR) 3,562.00p 3.40%
Ashtead Group (AHT) 5,522.00p 3.29%
Flutter Entertainment (DI) (FLTR) 17,435.00p 3.23%
Burberry Group (BRBY) 605.20p 3.14%
Mondi (MNDI) 1,442.50p 2.85%
Prudential (PRU) 630.20p 2.47%

FTSE 100 - Fallers

BAE Systems (BA.) 1,273.00p -4.68%
British American Tobacco (BATS) 2,900.00p -2.36%
Hikma Pharmaceuticals (HIK) 1,915.00p -1.95%
Pearson (PSON) 1,045.50p -1.65%
SEGRO (SGRO) 890.40p -1.55%
Imperial Brands (IMB) 2,210.00p -1.38%
GSK (GSK) 1,609.50p -1.38%
Smith & Nephew (SN.) 1,176.00p -1.18%
Vodafone Group (VOD) 77.62p -1.02%
Convatec Group (CTEC) 232.00p -0.94%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 1,278.00p 9.23%
Travis Perkins (TPK) 959.50p 4.75%
Ocado Group (OCDO) 352.90p 4.47%
Bridgepoint Group (Reg S) (BPT) 373.60p 4.24%
Bytes Technology Group (BYIT) 475.80p 3.80%
Watches of Switzerland Group (WOSG) 402.80p 3.12%
Harbour Energy (HBR) 263.60p 3.01%
Howden Joinery Group (HWDN) 978.00p 2.62%
Hays (HAS) 92.70p 2.49%
Allianz Technology Trust (ATT) 351.00p 2.48%

FTSE 250 - Fallers

Essentra (ESNT) 141.80p -15.19%
Playtech (PTEC) 714.00p -5.18%
JTC (JTC) 1,082.00p -4.59%
North Atlantic Smaller Companies Inv Trust (NAS) 3,840.00p -4.48%
Senior (SNR) 152.40p -4.15%
Chemring Group (CHG) 371.50p -3.13%
QinetiQ Group (QQ.) 446.00p -2.92%
Genus (GNS) 1,894.00p -2.86%
OSB Group (OSB) 380.00p -2.61%
Harworth Group (HWG) 190.00p -2.60%