London close: Stocks finish weaker as ECB stands pat on policy

The FTSE 100 ended the session down 0.16% at 6,003.32, and the FTSE 250 was 0.09% weaker at 17,579.34.

Sterling was sharply weaker in late trading, last falling 1.08% against the dollar to $1.2861, and losing 1.75% on the euro to €1.0822.

The European Central Bank whet investor expectations earlier in the afternoon, keeping all its main policy settings unchanged.

Investor focus was on ECB chief Christine Lagarde, however, who conceded at her press conference that euro strength could negatively impact on prices, adding that the Governing Council was watching it closely.

Interest rates for the ECB's main refinancing operations, marginal lending facility and deposit facility were kept at 0.0%, 0.25% and -0.5%.

“Today’s ECB meeting highlighted the difference between Lagarde and her predecessor, with Draghi’s ability to talk down the euro somewhat lacking from today’s meeting,” said IG senior market analyst Joshua Mahony.

“Euro-dollar strength seen over recent months has come to the detriment of eurozone businesses, yet Lagarde’s decision to push back on claims that the euro is overvalued ultimately sparked a predictable rise for the single currency.

“While some have worried that the average inflation targeting policy of the Fed will signal a more long-lasting policy of easing compared with the ECB, the current consumer price index reading of -0.2% highlights that inflation is more likely to force further easing than bring it to an end.”

On home shores, investors were mulling over the latest survey from the Royal Institution of Chartered Surveyors, which showed house prices rose at the fastest pace for four years in August as buyers sought out properties with gardens or near green space.

A net balance of 44% of estate agents reported rising prices in RICS' monthly survey, up from 13% in July and a turnaround from May when prices were falling.

Only London failed to show growth with prices more or less unchanged in the past two months.

Buyer interest, new instructions and agreed sales all rose sharply as households acted to take account of Chancellor Rishi Sunak's stamp duty holiday, RICS said.

In equity markets, miners were under the cosh as copper prices fell, with BHP down 0.73%, Antofagasta off 1.19% and Anglo American 0.58% weaker.

Supermarket chain Morrisons was in the red by 4.62% after it said first-half like-for-like sales rose 8.7% but revenue declined 1.1% and pre-tax profit was down 28.2%.

Homewares retailer Dunelm slid 8.34%as it reported a drop in full-year profit and revenue, hit by the Covid-19 pandemic and subsequent closure of its stores.

Elsewhere, oilfield services provider Petrofac was knocked 4.58% lower by a downgrade to ‘underperform’ at Bernstein.

British Airways and Iberia parent IAG was flat, after announcing a heavily-discounted rights issue to raise €2.74bn to help bolster its finances.

On the upside, housebuilders were boosted by the RICS survey, with Persimmon up 2.75%, Taylor Wimpey rising 1.11%, Barratt Developments adding 2.28%, and Berkeley 0.99% higher.

Miniature wargames manufacturer Games Workshop surged 11.75% after it declared a 50p a share dividend and said trading in the three months to 30 August was ahead of the board’s expectations thanks to a solid performance from the online segment.

Dixons Carphone rallied 7.39% after saying it was considering a minority listing of its Nordics business and reporting strong trading supported by online sales.

Market Movers

FTSE 100 (UKX) 6,003.32 -0.16%
FTSE 250 (MCX) 17,579.34 -0.09%
techMARK (TASX) 3,822.79 -0.60%

FTSE 100 - Risers

Compass Group (CPG) 1,300.50p 3.83%
GVC Holdings (GVC) 866.80p 3.26%
Persimmon (PSN) 2,546.00p 3.04%
Kingfisher (KGF) 283.90p 2.90%
ITV (ITV) 64.24p 2.62%
Polymetal International (POLY) 1,991.00p 2.34%
Barratt Developments (BDEV) 512.00p 2.28%
Scottish Mortgage Inv Trust (SMT) 927.00p 2.15%
Auto Trader Group (AUTO) 562.80p 1.92%
Informa (INF) 403.90p 1.84%

FTSE 100 - Fallers

Morrison (Wm) Supermarkets (MRW) 186.95p -4.13%
Smith (DS) (SMDS) 280.30p -3.34%
British Land Company (BLND) 342.40p -3.25%
Pearson (PSON) 535.80p -1.98%
British American Tobacco (BATS) 2,620.50p -1.80%
Tesco (TSCO) 219.90p -1.65%
Intermediate Capital Group (ICP) 1,258.00p -1.64%
Sainsbury (J) (SBRY) 188.95p -1.49%
St James's Place (STJ) 957.80p -1.42%
Bunzl (BNZL) 2,364.00p -1.42%

FTSE 250 - Risers

Games Workshop Group (GAW) 9,750.00p 11.75%
Dixons Carphone (DC.) 87.15p 6.41%
TUI AG Reg Shs (DI) (TUI) 356.50p 4.82%
Computacenter (CCC) 2,372.00p 4.49%
William Hill (WMH) 195.50p 3.99%
Pershing Square Holdings Ltd NPV (PSH) 2,160.00p 3.85%
ICG Enterprise Trust (ICGT) 820.00p 3.54%
Carnival (CCL) 1,129.50p 3.24%
Hochschild Mining (HOC) 236.00p 3.15%
Ibstock (IBST) 151.80p 3.13%

FTSE 250 - Fallers

Dunelm Group (DNLM) 1,341.00p -8.34%
Hammerson (HMSO) 23.86p -6.88%
Cineworld Group (CINE) 49.71p -5.82%
St. Modwen Properties (SMP) 317.00p -4.80%
Petrofac Ltd. (PFC) 136.60p -4.58%
Vivo Energy (VVO) 70.20p -3.97%
Aggreko (AGK) 405.60p -3.93%
Derwent London (DLN) 2,612.00p -3.90%
QinetiQ Group (QQ.) 269.40p -3.79%
Essentra (ESNT) 281.40p -3.70%