Josh White Sharecast News

05 Dec, 2023 17:31

London close: Stocks mixed as investors mull fresh data

dl city of london west end westminster winter christmas shopping regent street oxford street lights cold dark unsplash — Sharecast / Jamie Davies via Unsplash

Barclays

243.50p

17:15 04/11/24

1.21%

2.90p

London’s financial markets finished with a mixed performance on Tuesday as investors considered key economic data and developments from both sides of the Atlantic.

Electronic & Electrical Equipment

9,451.64

16:54 04/11/24

-0.10%

-9.15

Support Services

11,090.61

16:54 04/11/24

-0.50%

-55.39

The FTSE 100 saw a minor setback, closing down 0.31% at 7,489.84 points, while the FTSE 250 posted a gain of 0.69% to reach 18,487.53 points.

In currency markets, sterling was last down 0.33% on the dollar, trading at $1.2591, while it strengthened slightly against the euro, rising 0.11% to change hands at €1.1671.

“While the DAX hits a new record high and the Nasdaq 100 starts to move higher again, the FTSE 100 has been left out,” said IG chief market analyst Chris Beauchamp.

“Losses in commodity prices have sent the mining sector into retreat, weighing on the index.”

Beauchamp said the year that started so well for the FTSE 100 had turned into yet another “dismal period” of underperformance.

“International investors continue to avoid the UK, starving the FTSE 100 and its constituents of the flows needed to fuel a proper rally.”

UK services sector shows signs of recovery, US labour market eases

In economic news, the UK services sector showed signs of recovery in November, according to the S&P Global/CIPS purchasing managers’ index (PMI).

It rose to 50.9 from October’s 49.5, surpassing the initial estimate of 50.5 and marking its highest since July.

A reading above 50.0 suggests expansion, while below 50.0 signals contraction.

“UK service providers moved back into expansion mode during November as stabilising demand conditions helped to lift business activity from its recent malaise,” said Tim Moore, economics director at S&P Global Market Intelligence.

“Despite tentative signs of a turnaround in new orders, survey respondents once again commented on a lack of willingness to spend among clients.

“Many firms noted that low levels of business and consumer confidence, alongside elevated borrowing costs, had constrained sales opportunities in November.”

Meanwhile, data from KPMG and the British Retail Consortium revealed that UK retail sales in November grew modestly despite increased discounts leading up to Black Friday.

The BRC-KPMG retail sales monitor reported a 2.7% increase in total retail sales for November, slightly above the three-month average but below the 12-month average.

Food sales slowed to 7.6%, while non-food sales declined by 1.6% in the three months.

“Black Friday began earlier this year as many retailers tried to give sales a much-needed boost in November,” said Helen Dickinson, chief executive of the BRC.

“While this had the desired effect initially, the momentum failed to hold throughout the month, as many households held back on Christmas spending.

“Retailers are banking on a last-minute flurry of festive frivolity in December and will continue working hard to deliver an affordable Christmas for customers so everyone can enjoy some Christmas cheer.”

In the grocery sector, Kantar predicted that UK grocery sales would exceed £13bn in December for the first time, driven by rising prices and holiday celebrations.

Sales increased by 6.3% in the four weeks ended 26 November, with grocery price inflation easing to 9.1%.

“The scene is set for record-breaking spend through the supermarket tills this Christmas,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

“The festive period is always a bumper one for the grocers, with consumers buying on average 10% more items than in a typical month.

“Some of the increase, of course, will also be driven by the ongoing price inflation we’ve seen this year.”

Turning to the US, the labour market slightly eased in October, with job openings decreasing to 8,733 million, their lowest level since March 2021, according to the US Department of Labor’s JOLTS survey.

Hires dipped by 0.3%, total separations rose by 0.9%, while the quits rate remained at 2.3%.

In the eurozone, economic activity continued to contract in November despite the composite purchasing managers’ index (PMI) rising to 47.6, its highest since July.

The industrial producer prices in the eurozone increased by 0.2% in October, with energy prices up by 1%.

Further afield, the Reserve Bank of Australia decided to maintain its cash rate at 4.35% overnight after last month’s increase to a 12-year high, following a decline in inflation to 4.9% in October.

Finally on data, China’s services sector exceeded expectations in November, with the Caixin services PMI rising to 51.5 from 50.4 in October, marking a three-month high.

Moonpig and Quiz tumble, DiscoverIE surges on improved profits

On London’s equity markets, Barclays fell 4.53% after news that the Qatar Investment Authority, the bank’s second-largest shareholder, had sold nearly half of its stake.

Both Prudential and HSBC Holdings decreased, with Prudential down 1.25% and HSBC slipping 0.12%.

The moves came after Moody’s cut its credit outlook on China to ‘negative’.

Auction Technology Group slid 4.27% after a downgrade from ‘overweight’ to ‘equalweight’ by Barclays.

Equipment hire specialist Ashtead Group saw its shares drop 3.76% after reporting flat second-quarter profits, although it noted that demand in the US remained robust.

Online gifts and greeting cards retailer Moonpig Group lost 10.31% despite announcing a jump in first-half profits.

Outside the FTSE 350, fashion retailer Quiz tumbled 11.11% after it issued a warning on full-year revenues following a disappointing Black Friday performance, as it reported a loss in the first half.

On the upside, DiscoverIE Group jumped 16.39% after the industrial electronics group lifted its interim dividend and reported a 7% increase in first-half underlying profits, driven by better-than-expected margins.

BT Group was a standout gainer, rising 3.85% after its joint venture broadcaster TNT Sports acquired the rights to transmit Premier League matches.

Land Securities Group was ahead 1.34% after receiving an upgrade to ‘buy’ from Goldman Sachs.

Travel caterer SSP Group added 3.45% after the company reinstated its dividend and reported nearly doubled annual core profits, driven by the resurgence in passenger numbers and the return of workers to offices.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,489.84 -0.31%
FTSE 250 (MCX) 18,487.53 0.69%
techMARK (TASX) 4,075.80 0.10%

FTSE 100 - Risers

BT Group (BT.A) 130.25p 3.29%
Beazley (BEZ) 544.50p 2.35%
IMI (IMI) 1,592.00p 1.92%
Whitbread (WTB) 3,240.00p 1.89%
Croda International (CRDA) 4,544.00p 1.68%
Melrose Industries (MRO) 536.20p 1.67%
Hikma Pharmaceuticals (HIK) 1,799.00p 1.67%
Airtel Africa (AAF) 111.30p 1.64%
Sainsbury (J) (SBRY) 289.20p 1.54%
RS Group (RS1) 762.20p 1.49%