London close: Stocks finish weaker on quiet day for data

dl city of london generic river thames square mile finance 20240326 4 — Sharecast / public domain image

Compass Group

2,624.00p

16:59 21/11/24

0.31%

8.00p

London stocks ended in the red on Tuesday, as losses in the mining sector overshadowed gains in other areas.

Travel & Leisure

8,670.24

16:49 21/11/24

0.97%

83.32

The FTSE 100 dropped by 0.38%, closing at 8,167.37 points, while the FTSE 250 slipped by 0.22%, ending the session at 21,091.49 points.

In currency markets, sterling was last down 0.15% against the dollar, trading at $1.2913, while it gained 0.18% on the euro to change hands at €1.1895.

“The morning gains for Europe have mostly slipped away, and it has been an uncertain start on Wall Street too as investors hunker down and await earnings from Tesla and Alphabet,” said IG chief market analyst Chris Beauchamp.

“However, yesterday’s slump in the Vix has continued into today’s session, suggesting that stocks could resume their gains should tonight’s earnings beat expectations.”

Beauchamp added that recent history had shown that oil prices tended to decline over the summer and early autumn, with worries about demand growth sparking fresh losses on Tuesday afternoon.

“This spells fresh trouble for the FTSE 100, which has been desperately seeking a catalyst for a new rally.

“With oil and metals prices suffering it seems the index’s range bound period has some way to go.”

Existing US home sales come in below expectations

In economic news, the data calendar in the UK and Europe was relatively quiet on Tuesday, leaving the spotlight on economic developments from the United States.

In the US, existing home sales for June came in at 3.89 million, below the estimated four million and a decline from May’s 4.11 million.

That represented a 5.4% decrease compared to last month’s 0.7% dip.

Housing inventory increased to 4.1 months from 3.7 months, totaling 1.32 million units.

The median house price reached a record high of $426,900, up 4.1% from June 2023.

Houses sold faster, with an average of 22 days on the market, down from 24 days in May but up from 18 days a year ago.

First-time buyers made up 29% of sales in June, a slight decrease from 31% in May but an increase from 27% in June 2023.

All-cash sales remained steady at 28%, consistent with May and up from 26% a year earlier.

Individual investors or second-home buyers, who often pay in cash, accounted for 16% of purchases, unchanged from May but down from 18% in June 2023.

Meanwhile, the Richmond Federal Reserve’s July manufacturing index fell sharply to -17 from an expected -7 and a prior reading of -10.

The services index, however, improved to 5 from -11.

Its index for manufacturing shipments also dropped significantly to -21 from -9.

The overall manufacturing activity in the Fifth District deteriorated, with the composite index declining from -10 in June to -17 in July.

Component indexes showed shipments plunging from -9 to -21, new orders falling from -16 to -23, and employment slipping from -2 to -5.

Compass a high riser, miners in the red

On London’s equity markets, Compass Group was a high riser with a 4.52% increase after the company raised its full-year guidance, citing a robust third quarter.

The world’s largest catering company reported a 10.3% rise in organic revenues and now anticipates higher growth in underlying profit and organic revenues than the previously projected 15% and 10%, respectively.

Insurer Beazley rose 1.84% following a reassuring update regarding its ongoing IT outage linked to cybersecurity firm CrowdStrike.

The group said the incident was not expected to impact its profitability, maintaining its full-year combined ratio guidance in the low-80s.

Sage Group gained 0.95%, benefiting from positive sentiment surrounding its German peer SAP, which reported strong second-quarter results.

SAP’s impressive growth in cloud-based and AI software solutions boosted Sage’s stock.

On the downside, mining stocks were among the biggest decliners, impacted by a lacklustre reaction to an interest-rate cut in China.

Glencore fell 2.24%, Anglo American by 2.22%, Antofagasta by 1.14%, and Rio Tinto by 1.47%.

“Copper futures have fallen by nearly 7% over the past five days amid concerns about sluggish demand from China as it struggles with a slowdown in economic growth,” said Dan Coatsworth, investment analyst at AJ Bell.

“The market has taken the view that China isn’t digging deep enough with stimulus measures to fire up the economy and therefore commodities demand is at risk.”

Anglo American specifically faced pressure after reporting that its South African iron ore mining subsidiary had a “solid” first half of the year but highlighted challenges in the macro and logistics environment.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,167.37 -0.38%
FTSE 250 (MCX) 21,091.49 -0.22%
techMARK (TASX) 4,773.35 -0.15%

FTSE 100 - Risers

Compass Group (CPG) 2,288.00p 4.52%
Smurfit Westrock (DI) (SWR) 3,750.00p 3.91%
Rolls-Royce Holdings (RR.) 460.00p 3.77%
Melrose Industries (MRO) 563.00p 2.07%
Beazley (BEZ) 662.00p 1.85%
Marks & Spencer Group (MKS) 325.60p 1.75%
JD Sports Fashion (JD.) 119.85p 1.65%
Centrica (CNA) 141.70p 1.43%
Intermediate Capital Group (ICG) 2,148.00p 1.31%
CRH (CDI) (CRH) 6,344.00p 1.21%