London close: Stocks mixed as investors assess hung French parliament

The FTSE 100 index edged down by 0.13%, closing at 8,193.49 points, while the FTSE 250 showed a slight gain of 0.06% to end at 20,798.32 points.

In currency markets, sterling was last up 0.05% on the dollar to trade at $1.2821, while it advanced 0.14% against the euro, changing hands at €1.1838.

The unexpected outcome of the second round of the French elections saw the left-wing New Popular Front (NFP) emerge as the largest party, claiming 182 of the 577 parliamentary seats.

Marine Le Pen’s National Rally secured third place with 143 seats, while Emanuel Macron’s centrist Ensemble coalition obtained 168 seats.

“While it began the week in a good mood, the FTSE 100, along with other European markets, has seen its gains slip away,” said IG chief market analyst Chris Beauchamp.

“While the lack of a clear immediate winner from France’s elections provided a short boost this morning, that optimism has been hard to sustain.

“France’s budget problems still need to be solved, and Sunday’s result doesn’t provide much hope that a resolution can be found quickly.”

Beauchamp noted that Friday’s US payrolls number revived hopes of a September rate cut, adding that investors were now looking towards Tuesday’s testimony from Jerome Powell and inflation figures later in the week to provide further reinforcement.

“If the case for a September move gathers pace, it will help investors to view earnings season in a more positive light too.”

Investor sentiment falls more than expected in the eurozone

In economic news, investor sentiment in the eurozone experienced a sharper-than-anticipated decline in July, according to a fresh survey release, influenced by geopolitical concerns.

The Sentix index for the euro area fell to -7.3 points in July from 0.3 in June, a more significant drop than the forecasted fall to zero.

Additionally, the expectations index decreased from 10.0 in June to 1.5 in July, a shift Sentix described as “likely to worry forecasters”.

The survey highlighted investor anxiety over political stalemates following the French elections, impending German state elections, and the uncertainty surrounding the upcoming US presidential election.

Meanwhile, Germany's trade surplus expanded to a four-month high in May, driven by a significant reduction in imports.

According to data from the Federal Statistical Office, the trade balance increased to €24.9bn in May, up from a revised €22.2bn in April, defying economists' expectations of a decrease to €20.3bn.

That marked the second-highest nominal surplus on record, trailing only the €26.8bn surplus reported in January. Imports to Germany fell by 6.6% from April to €106.7bn, following a 1.2% growth the previous month, largely due to a sharp decline in imports from Europe.

Exports also decreased, though less sharply, by 3.6% to €131.6bn.

Compared to May 2023, exports were down 1.6% while imports had dropped by 8.7%.

Hiscox and Britvic rise on takeover news, Plus500 in the red

On London’s equity markets, Hiscox surged 13.43% after a report by Insurance Insider indicating potential takeover interest, with Japanese insurer Sompo and Italy’s Generali reportedly considering bids.

The speculation also boosted other insurers like Beazley and Lancashire.

Britvic experienced a significant rally, climbing 4.63%, after announcing its agreement to be acquired by Danish brewing giant Carlsberg for £3.3bn.

The agreement followed Britvic's rejection of two previous bids.

Ocado Group shares rose by 6.46% on news of its plan to construct a third customer fulfilment centre in Japan, in collaboration with its partner Aeon, continuing its expansion in the Japanese market.

Melrose Industries saw a modest increase of 0.76%, benefitting from an upgrade to ‘outperform’ from ‘sector perform’ by RBC Capital Markets.

RBC highlighted the company's strong fundamentals despite a recent 15% drop in share price from April highs.

B&M European Value Retail's shares gained 2.32% after Canaccord Genuity initiated coverage with a ‘buy’ rating and a 600p price target, citing significant long-term store expansion potential in the UK and France, alongside like-for-like growth and potential for a special dividend.

Greencoat UK Wind rose 2.51% following the UK Labour government's announcement of ending the ban on onshore wind farms, which was expected to positively impact the renewable energy sector.

On the downside, Unite Group edged down by 0.01% despite revising its rental growth expectations for the 2024/25 academic year to at least 7%.

Plus500 saw a decline of 3.89% after reiterating its full-year expectations despite a strong first half in challenging market conditions.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,193.49 -0.13%
FTSE 250 (MCX) 20,798.32 0.06%
techMARK (TASX) 4,748.58 -0.15%

FTSE 100 - Risers

Beazley (BEZ) 684.50p 3.56%
B&M European Value Retail S.A. (DI) (BME) 456.50p 2.93%
CRH (CDI) (CRH) 5,800.00p 2.00%
International Consolidated Airlines Group SA (CDI) (IAG) 176.10p 1.97%
Convatec Group (CTEC) 243.80p 1.92%
Coca-Cola HBC AG (CDI) (CCH) 2,728.00p 1.87%
Rolls-Royce Holdings (RR.) 461.30p 1.56%
Prudential (PRU) 717.20p 1.44%
NATWEST GROUP (NWG) 329.40p 1.42%
easyJet (EZJ) 471.60p 1.33%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 3,574.00p -2.24%
Schroders (SDR) 374.00p -1.99%
Centrica (CNA) 139.10p -1.97%
Fresnillo (FRES) 582.00p -1.85%
Sage Group (SGE) 1,067.00p -1.75%
BP (BP.) 474.65p -1.57%
Airtel Africa (AAF) 117.10p -1.51%
SSE (SSE) 1,829.00p -1.40%
Croda International (CRDA) 3,995.00p -1.38%
SEGRO (SGRO) 900.40p -1.34%

FTSE 250 - Risers

Hiscox Limited (DI) (HSX) 1,267.00p 13.43%
Ocado Group (OCDO) 345.90p 5.39%
Lancashire Holdings Limited (LRE) 623.00p 5.06%
Bank of Georgia Group (BGEO) 4,380.00p 5.04%
Britvic (BVIC) 1,264.00p 4.46%
Ibstock (IBST) 186.80p 4.24%
TBC Bank Group (TBCG) 2,870.00p 4.17%
Wizz Air Holdings (WIZZ) 2,114.00p 3.62%
Alpha Group International (ALPH) 2,400.00p 3.00%
Hill and Smith (HILS) 2,055.00p 2.98%

FTSE 250 - Fallers

Ithaca Energy (ITH) 122.80p -5.25%
W.A.G Payment Solutions (WPS) 65.20p -4.68%
AJ Bell (AJB) 385.00p -3.39%
Plus500 Ltd (DI) (PLUS) 2,238.00p -3.28%
PureTech Health (PRTC) 181.00p -3.10%
SDCL Energy Efficiency Income Trust (SEIT) 63.10p -2.92%
Harbour Energy (HBR) 299.00p -2.92%
Endeavour Mining (EDV) 1,741.00p -2.90%
Bytes Technology Group (BYIT) 537.50p -2.80%
Balanced Commercial Property Trust Limited (BCPT) 81.80p -2.62%