London close: Stocks manage gains as miners surge
London’s stock markets closed marginally higher on Tuesday, driven by positive performances from the mining sector and consumer goods behemoth Unilever, which enjoyed a boost from robust second-quarter results.
The FTSE 100 ended the trading day up 0.17% at 7,691.80 points, while the FTSE 250 edged up 0.03% to settle at 19,149.88.
Currency markets saw sterling advance, with the pound last up 0.34% on the dollar at $1.2873, while it climbed 0.53% against the common currency to change hands at €1.1653.
“After a poor start to the week as investors grew tired of waiting for the next stimulus initiative from China to boost its economy, Asia stocks rallied on Tuesday as investors got some of the news they wanted,” said AJ Bell head of financial analysis Danni Hewson.
“Reports suggested Beijing will provide more support, albeit details remain thin on the ground at present.
“Good news from China always makes its way to the UK market in a flash, with commodity producers riding high.”
Rising finance costs dampen UK manufacturers' investment intentions
In economic news, a surge in financing costs looked to be constraining UK manufacturers' investment ambitions, despite increased optimism, according to the Confederation of British Industry (CBI).
In the CBI's quarterly review ending in July, British manufacturers demonstrated heightened positivity, with the business sentiment index rising to a net balance of +6%, a significant recovery from April's -2%.
However, the increased confidence was paired with a drop in investment intentions due to escalating finance costs.
The report indicated that the proportion of companies identifying financial costs as an investment obstacle has hit a 32-year peak.
In terms of barriers to investment, uncertainty around demand topped the list for 40% of manufacturers.
Following closely were inadequate net returns, mentioned by 35% of firms.
The availability of internal finance and cost of finance, both peaking since July 2020, were cited by 24% and 15% of manufacturers respectively.
Positive news emerged on the export front, as the export optimism index for the forthcoming year advanced to +5% from a previous -17%.
However, that optimism was countered by a marginal slump in the index for total new orders, which fell to -6% from -3%.
In terms of pricing, domestic selling price growth decelerated, while the pace of average cost growth quickened, indicating a squeeze on manufacturers' margins.
Elsewhere, fresh survey data from PwC showed a significant uplift in UK consumer confidence, which now stood at -13, a marked improvement from the -25 recorded in spring and the highest level in 18 months.
The figure also represented a 31-point rise compared to last September and a 32-point surge since January.
The survey disclosed improvements in sentiment across all demographic groups since Spring, with a shrinking disparity between different age and socio-economic categories.
The under-25s remained the most optimistic age group, while those aged 55 to 64 were the least positive.
Mining giants lead London higher; Compass, Auto Trader suffer losses
On London’s equity markets, key mining stocks were among the biggest gainers as base metal prices surged following China's announcement of additional economic support measures.
Anglo American was up 4.83% and Rio Tinto Group gained 4.19%, while Antofagasta and Glencore also saw their share prices ascend, by 6.59% and 0.71%, respectively.
Consumer goods giant Unilever saw a boost of 4.69% after reporting a 3.3% increase in interim earnings.
That growth was propelled by increased prices, and the company declared an underlying operating profit of €5.2bn as underlying sales expanded 9.1% to €30.4n.
However, Unilever said it was anticipating a moderation in underlying price growth throughout the year.
Croda International shares increased by 4.73% following the release of its half-year results.
Other winners included Tyman and SThree, with rises of 4.56% and 2.87% respectively, both rallying on the back of favourable results.
On the downside, Compass Group dropped 4.83% despite the catering company confirming its full-year outlook and registering a rise in third-quarter organic revenue.
Auto Trader Group experienced a 3.56% decline following a downgrade from 'neutral' to 'underweight' by JPMorgan.
The downgrade was justified by decelerating momentum in the core business and an unattractive valuation, according to the financial services firm.
Bridgepoint Group also suffered a slump, with shares down by 6.98% following the release of its latest results.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 7,691.80 0.17%
FTSE 250 (MCX) 19,149.88 0.03%
techMARK (TASX) 4,450.96 -0.24%
FTSE 100 - Risers
Antofagasta (ANTO) 1,657.00p 6.59%
Anglo American (AAL) 2,506.00p 4.83%
Croda International (CRDA) 5,930.00p 4.73%
Unilever (ULVR) 4,193.00p 4.34%
Rio Tinto (RIO) 5,394.00p 4.19%
Prudential (PRU) 1,089.00p 3.37%
Admiral Group (ADM) 2,293.00p 3.14%
Smith (DS) (SMDS) 301.70p 2.86%
Mondi (MNDI) 1,336.50p 2.37%
Smurfit Kappa Group (CDI) (SKG) 3,024.00p 2.23%
FTSE 100 - Fallers
Compass Group (CPG) 2,016.00p -5.17%
Melrose Industries (MRO) 518.40p -2.74%
International Consolidated Airlines Group SA (CDI) (IAG) 149.65p -2.65%
Rolls-Royce Holdings (RR.) 152.65p -2.58%
Associated British Foods (ABF) 2,038.00p -2.53%
Auto Trader Group (AUTO) 634.80p -2.34%
Flutter Entertainment (CDI) (FLTR) 14,940.00p -2.26%
Next (NXT) 7,058.00p -2.04%
Ocado Group (OCDO) 769.40p -1.99%
Shell (SHEL) 2,410.00p -1.35%
FTSE 250 - Risers
Me Group International (MEGP) 159.20p 4.87%
Tyman (TYMN) 298.00p 4.56%
Elementis (ELM) 108.80p 4.41%
W.A.G Payment Solutions (WPS) 97.60p 2.74%
Jupiter Fund Management (JUP) 107.40p 2.58%
Lancashire Holdings Limited (LRE) 606.00p 2.54%
IP Group (IPO) 60.80p 2.53%
Pagegroup (PAGE) 448.60p 2.23%
Essentra (ESNT) 166.00p 2.22%
Domino's Pizza Group (DOM) 333.00p 2.21%
FTSE 250 - Fallers
Bridgepoint Group (Reg S) (BPT) 190.50p -9.80%
Moneysupermarket.com Group (MONY) 257.40p -6.81%
Wizz Air Holdings (WIZZ) 2,416.00p -3.53%
Aston Martin Lagonda Global Holdings (AML) 340.20p -3.35%
Mitchells & Butlers (MAB) 210.40p -3.04%
Playtech (PTEC) 580.50p -2.68%
Target Healthcare Reit Ltd (THRL) 74.00p -2.62%
easyJet (EZJ) 446.00p -2.06%
BH Macro Ltd. GBP Shares (BHMG) 362.50p -2.03%
Discoverie Group (DSCV) 823.00p -2.02%