London close: Stocks jump on weaker sterling, easing geopolitics

dl city of london generic walkie talkie square mile finance 20240326 5 — Sharecast / public domain image

Marks & Spencer Group

382.20p

17:15 04/11/24

0.37%

1.40p

London's financial markets closed in the green on Monday, with the top-flight index remaining near record highs by the close.

B&M European Value Retail S.A. (DI)

393.20p

17:15 04/11/24

0.28%

1.10p

Tyman

n/a

The FTSE 100 rose 1.62% to reach 8,023.87 points by the end of trading, while the FTSE 250 added 1.07% to settle at 19,599.39 points.

In currency markets, sterling was last down 0.42% on the dollar, trading at $1.2318, while it dipped 0.26% against the euro to change hands at €1.1579.

“A combination of a depreciating British pound - making UK stocks cheaper to buy for international investors - and de-escalation in the Middle East, propelled the FTSE 100 close to its record high,” said IG senior market analyst Axel Rudolph.

“Last week's dovish comments by Bank of England governor Andrew Bailey regarding rapidly falling UK inflation, pushed GBP-USD to levels last traded in mid-November and EUR-GBP towards its early January highs.

“Further pound weakness remains on the cards.”

Rudolph added that de-escalating tensions in the Middle East led to the unwinding of flight-to-safety trades, which last week triggered strong gains in precious metal prices and a short-lived spike in crude prices.

“On Monday afternoon, the gold price dropped over 2%, the silver price over 4% and the oil price over 0.5%.”

UK housing market sees upswing, China stands pat on interest rates

In economic news, the UK housing market saw a notable surge in April, with the average asking price of a home soaring to its highest annual growth rate in a year.

According to a survey from property website Rightmove, asking prices rose 1.7% compared to the prior year, following a 0.8% increase in March.

Despite a slight slowdown in monthly growth to 1.1% from 1.5% in March, the average house price reached £372,324, only £570 shy of the record set in May 2023, versus £368,118 in March.

Rightmove reported a significant uptick in both seller and buyer activity compared to last year, with new sellers entering the market up by 12% and the number of sales agreed increasing by 13%.

Larger homes experienced the most substantial growth, with new sellers up by 18% and sales agreed rising by 20%.

“The top-of-the-ladder sector continues to drive pricing activity at the start of the year, with movers in this sector typically less sensitive to higher mortgage rates, and more equity rich, contributing to their ability to move,” said Tim Bannister, Rightmove’s director of property science.

“While some buyers, across all sectors, will feel that their affordability has improved compared to last year due to wage growth and stable house prices, others will be more impacted by cost-of-living challenges and stickier than expected high mortgage rates.

“Despite these factors, it has been a positive start to the year in comparison to the more muted start to 2023.”

Across the Atlantic, the Chicago Federal Reserve's national activity index for March rose to +0.15, surpassing expectations and marking the highest reading since November 2023.

Employment-related indicators showed improvement, with a rise to +0.04 from -0.01 in February, while production-related indicators slightly decreased to +0.11 from +0.13.

Meanwhile, China maintained its benchmark lending rates unchanged, aligning with market forecasts.

The one-year loan prime rate (LPR) remained steady at 3.45%, while the five-year rate, which influences mortgage pricing, stayed at 3.95%.

Retailers rise on RBC comments, Fresnillo in the red

On London’s equity markets, the retail sector was in focus as Marks and Spencer Group jumped 4.39% on the back of positive remarks from RBC Capital Markets regarding the potential uptick in spending on travel, entertainment, and clothing.

RBC named M&S its top pick in the sector, citing anticipated moderate growth driven by structural improvements in food and womenswear.

Other retailers like J Sainsbury, B&M European Value Retail, Tesco, and Next also posted solid gains.

Ocado Group rose 3.23% after reports shareholders were pressuring the grocery delivery company to consider a US listing.

Meanwhile, Tyman shares soared 34.46% after the company agreed to be acquired by US metal window and door manufacturer Quanex in a £788m cash and stock deal.

The acquisition was expected to strengthen the enlarged business, according to Tyman's non-executive chair, Nicky Hartery.

On the downside, precious metals miner Fresnillo declined 2.49% as gold and silver prices fell due to decreased demand for safe havens.

Mobico Group tumbled 9.83% after the company reported a statutory operating loss influenced by restructuring costs and charges related to a German rail contract provision.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,023.87 1.62%
FTSE 250 (MCX) 19,599.39 1.07%
techMARK (TASX) 4,460.95 1.37%

FTSE 100 - Risers

Marks & Spencer Group (MKS) 256.60p 4.39%
Pershing Square Holdings Ltd NPV (PSH) 3,970.00p 4.14%
Sainsbury (J) (SBRY) 269.00p 3.94%
Vodafone Group (VOD) 69.58p 3.91%
Tesco (TSCO) 291.10p 3.45%
International Consolidated Airlines Group SA (CDI) (IAG) 175.20p 3.36%
Ocado Group (OCDO) 358.40p 3.23%
Next (NXT) 9,056.00p 3.21%
HSBC Holdings (HSBA) 666.80p 3.14%
B&M European Value Retail S.A. (DI) (BME) 524.80p 2.82%