London close: Stocks manage gains ahead of US payrolls report

The FTSE 100 index rose 0.48% to 7,975.89, while the FTSE 250 saw gains of 0.61% to 19,873.19.

In currency markets, sterling was last up 0.11% on the dollar to trade at $1.2666, while it declined 0.16% against the euro, changing hands at €1.1658.

“Today’s action on the FTSE 100 has been driven by a combination of mining stocks and yield plays,” said IG chief market analyst Chris Beauchamp.

“While the commodity rally might be taking a breather today, mining stocks like Fresnillo and Anglo American have been firm favourites of late, and there’s no sign of that move slowing down.

“Meanwhile, investors continue to snap up yield stocks, as expectations of lower rates later in the year dominate.”

Beauchamp added that a rise in unemployment claims was helping US stocks to build on Wednesday’s recovery, but after a solid ADP report, traders were preferring to “sit on their hands” ahead of Friday’s non-farm payrolls report.

“A procession of Fed speakers is also keeping risk appetite in check, though once more US indices appear to have successfully avoided a deeper sell-off, continuing the overall bullish theme.”

UK business activity expands in March, still misses expectations

In economic news, the UK saw continued expansion in business activity during March, albeit slightly below expectations.

The S&P Global services purchasing managers' index (PMI) dipped to 53.1 from February's 53.8.

While still comfortably above the 50.0 mark indicating expansion, it fell short of the forecast 53.4, and signalled the slowest rate of growth since November last year.

The composite output index, which measures activity in both the services and manufacturing sectors, stood at 52.8, indicating a solid upturn despite a slight decrease from February's figure.

“The recovery in service sector output lost a little bit of momentum during March, and more so than suggested by the flash PMI results, but the overall picture remains reasonably positive,” said Tim Moore, economics director at S&P Global Market Intelligence.

“Business activity has now expanded for five consecutive months, supported by sustained improvements in new order intakes.

“The solid growth rate achieved in March reinforces the view that a rebound in service sector performance is helping the UK economy to pull out of last year's shallow recession.”

Elsewhere, new car registrations in the UK surged 10.4% in March, marking the strongest performance for the month since 2019, according to the Society of Motor Manufacturers and Traders (SMMT).

Despite the growth, registrations remained 30.6% below pre-pandemic levels, reflecting ongoing challenges in the automotive industry.

Fleet investment drove much of the growth, rising by 29.6%, while registrations by private buyers fell by 7.7%, indicating a challenging economic environment.

“Market growth continues, fuelled by fleets investing after two tough years of constrained supply,” commented SMMT chief executive Mike Hawes.

“A sluggish private market and shrinking EV market share, however, show the challenge ahead.

“Manufacturers are providing compelling offers, but they can't single-handedly fund the transition indefinitely.”

On the continent, economic activity in the eurozone's private sector showed signs of improvement, expanding for the first time in 10 months.

Revised figures from HCOB showed that the eurozone composite PMI rose to 50.3 in March, indicating growth across both manufacturing and services sectors.

The uptick suggested a potential turnaround in economic activity after months of contraction.

In the US, however, layoff announcements continued to rise in March, according to consultancy Challenger, Gray & Christmas.

The number of announcements increased 7% compared to February, reaching 90,039.

While the figure was similar to that of March last year, job cut announcements for the first quarter surged 120% compared to the prior quarter, indicating ongoing challenges in the labour market despite signs of economic recovery.

Entain rises on management changes, ex-divs hog the downside

On London’s equity markets, Entain rose 5.11% after announcing the departure of its chair Barry Gibson and the appointment of Stella David as the new CEO.

Meanwhile, miners Anglo American and Antofagasta both rose as metals prices climbed.

“Miners were in demand as commodities prices continued to surge - an inflationary development which might provoke some nervousness about the fate of long-awaited interest rate cuts,” said Russ Mould, investment director at AJ Bell.

BT Group rallied by 2.77% following an endorsement from JPMorgan, which highlighted the undervaluation of its shares and the potential for a significant re-rating.

Future soared 10.43% after it reported a return to organic revenue growth, primarily driven by strong performances in various sectors.

Ascential also saw demand rise, jumping 2.56%, after unveiling plans to return £850m to shareholders.

Dowlais Group advanced by 3.11% after initiating a £50m share buyback, while Aston Martin Lagonda Global surged by 3.52%, coinciding with positive sales news from Volvo.

Drax Group edged up by 1.03% after securing a new £150m term-loan facility to refinance its debt.

On the downside, Vodafone Group experienced a 1.54% decline as regulatory concerns loomed over its merger with CK Hutchison’s Three.

Ocado Group slipped by 1.83% following the announcement of chairman Rick Haythornthwaite's upcoming departure.

Ex-dividends were a drag, with InterContinental Hotels Group, Rentokil Initial, IMI, Direct Line, Domino's Pizza, Games Workshop, Hammerson, and OSB Group all in the red due to the absence of entitlement to dividends.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,975.89 0.48%
FTSE 250 (MCX) 19,873.19 0.61%
techMARK (TASX) 4,473.14 0.26%

FTSE 100 - Risers

Entain (ENT) 797.40p 5.03%
Antofagasta (ANTO) 2,198.00p 4.67%
Mondi (MNDI) 1,420.50p 3.42%
Fresnillo (FRES) 540.50p 3.15%
Anglo American (AAL) 2,110.50p 3.05%
NATWEST GROUP (NWG) 280.50p 2.86%
Lloyds Banking Group (LLOY) 53.86p 2.83%
easyJet (EZJ) 569.80p 2.63%
Ashtead Group (AHT) 5,742.00p 2.54%
Barclays (BARC) 193.16p 2.45%

FTSE 100 - Fallers

Ocado Group (OCDO) 417.20p -5.03%
St James's Place (STJ) 448.20p -2.48%
Admiral Group (ADM) 2,637.00p -2.12%
InterContinental Hotels Group (IHG) 7,954.00p -1.90%
Croda International (CRDA) 4,671.00p -1.58%
Vodafone Group (VOD) 70.10p -1.54%
Whitbread (WTB) 3,227.00p -1.53%
Convatec Group (CTEC) 289.20p -1.43%
Compass Group (CPG) 2,221.00p -1.24%
DCC (CDI) (DCC) 5,650.00p -1.22%

FTSE 250 - Risers

Future (FUTR) 695.00p 15.93%
Mitie Group (MTO) 114.60p 8.32%
Pagegroup (PAGE) 485.20p 7.68%
Wizz Air Holdings (WIZZ) 2,286.00p 5.64%
Dr. Martens (DOCS) 97.00p 4.53%
TUI AG Reg Shs (DI) (TUI) 664.50p 3.75%
Aston Martin Lagonda Global Holdings (AML) 167.50p 3.52%
W.A.G Payment Solutions (WPS) 69.00p 2.99%
Mobico Group (MCG) 65.65p 2.98%
Hays (HAS) 96.65p 2.93%

FTSE 250 - Fallers

OSB Group (OSB) 365.60p -3.43%
Hammerson (HMSO) 27.82p -2.52%
Abrdn (ABDN) 140.60p -1.64%
Jlen Environmental Assets Group Limited NPV (JLEN) 90.10p -1.64%
Me Group International (MEGP) 166.80p -1.53%
Hill and Smith (HILS) 1,936.00p -1.53%
Hiscox Limited (DI) (HSX) 1,203.00p -1.39%
Domino's Pizza Group (DOM) 341.80p -1.38%
Bakkavor Group (BAKK) 112.00p -1.32%
Direct Line Insurance Group (DLG) 189.50p -1.20%