London close: Stocks mixed as Japan ends negative rate policy

The FTSE 100 edged up 0.2% to 7,738.30 points, while the FTSE 250 saw a slight decline of 0.28% to settle at 19,432.81 points.

In currency markets, sterling was last down 0.04% on the dollar to trade at $1.2724, while it managed a slight gain of 0.03% against the euro, changing hands at €1.1711.

“Most equity indices, except those in China and India as well as the Nasdaq 100, were trading in slightly positive territory ahead of Wednesday's Fed meeting which is hoped to provide more clarity with regards to the dot plot,” said IG senior market analyst Axel Rudolph.

“The BoJ's first rate hike in 17 years and the scrapping of yield curve controls propped up the Nikkei 225 but, surprising most investors, led to significant yen depreciation by around 1% versus the US dollar and the euro.

“Australia's unchanged cash rate at its RBA meeting but dovish tone led to a softening Australian dollar which helped the ASX 200 to a positive close.”

Rudolph added that European indices were buoyed by a much better-than-expected German ZEW economic sentiment reading, which hit a two-year high.

“Oil and natural gas prices rallied between 1% and 3% on supply concerns with Brent crude oil staying on track for its fifth consecutive day of gains.

“Cocoa prices, which hit record highs and have risen by around 100% year-to-date, are finally stalling but chocolate producers are hoping for a more substantial pullback ahead of Easter.”

Japan ends negative interest rates, RBA stands pat

In economic news, Japan's central bank opted to raise interest rates on Tuesday, marking the end of an eight-year policy of keeping rates in negative territory.

The Bank of Japan (BoJ) announced its decision to lift its short-term policy rate from -0.1% to a range between zero and 0.1%.

That adjustment - its first in 17 years - came as the central bank looked to stimulate economic growth.

Despite a slowing in price rises, core consumer inflation in Japan held steady at the BoJ’s 2% target in January, according to the latest official data.

Meanwhile, Australia's central bank left interest rates unchanged, as anticipated.

Governor Michele Bullock emphasised the ongoing challenge of high inflation, stating that progress has been made but cautioning that uncertainties remain.

The Reserve Bank of Australia maintained its cash rate at 4.35% for the third consecutive meeting, stressing the importance of returning inflation to its target band of 2% to 3%.

In Europe, German business sentiment showed improvement in March, according to the ZEW Center for European Economic Research.

The ZEW investor expectations index rose to 31.7, up 11.8 points from February.

However, the indicator for the current economic situation saw only a modest uptick, reaching -80.5.

Finally on data, both building permits and housing starts surged in the United States in February, surpassing market expectations.

Building permits increased 1.9% to a seasonally-adjusted annualised rate of 1.51 million, the highest level since August last year.

Housing starts saw a significant jump of 10.7% month-on-month to an annualised rate of 1.52 million, amid a persistent shortage of previously owned houses.

While single-family housing starts rose, units in buildings with five units also saw an increase.

The Midwest and the South experienced rises in starts, while the Northeast and the West witnessed declines.

Unilever rises on restructuring plans, Crest Nicholson in the red

On London’s equity markets, Unilever rose 3.08% after consumer goods giant announced plans to spin off its ice cream division by the end of 2025, accompanied by a restructuring initiative involving job cuts totaling 7,500 across global operations.

Unilever also outlined expectations of achieving cost savings of approximately €800m over the next three years through its productivity programme.

Close Brothers Group added 3.95% after it detailed measures to bolster its available CET1 capital by approximately £400m by the end of 2025.

The move aimed to address potential fallout from the Financial Conduct Authority's review into mis-sold car loans.

Trustpilot Group and Haleon also experienced gains, advancing by 1.36% and 1.71%, respectively.

Trustpilot reported a profitable performance in 2023, with significant revenue growth and an increase in user numbers, while Haleon benefited from Pfizer's larger-than-expected stake sale in the consumer healthcare group.

On the downside, Crest Nicholson Holdings declined 9.11% after revealing build defects on four completed sites predating 2019, potentially incurring remediation costs of up to £15m.

Essentra, despite a resilient performance in 2023 with improved operating profits and margins, closed with a 4.72% decrease in its stock value.

The manufacturer reported a decline in revenues, attributing it to currency fluctuations.

Outside the FTSE 350, DFS Furniture slid 6.03% after a downgrade in its profit and revenue guidance for the 2024 financial year.

The retailer cited weakened market demand over the past two months, contrasting with a solid start to January.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,738.30 0.20%
FTSE 250 (MCX) 19,432.81 -0.28%
techMARK (TASX) 4,465.07 0.12%

FTSE 100 - Risers

Unilever (ULVR) 3,929.00p 3.08%
Rolls-Royce Holdings (RR.) 398.70p 2.23%
International Consolidated Airlines Group SA (CDI) (IAG) 159.90p 2.21%
Ashtead Group (AHT) 5,296.00p 1.85%
BAE Systems (BA.) 1,327.50p 1.72%
Haleon (HLN) 320.40p 1.71%
Smurfit Kappa Group (CDI) (SKG) 3,600.00p 1.69%
Hikma Pharmaceuticals (HIK) 1,913.00p 1.59%
Standard Chartered (STAN) 658.80p 1.32%
Shell (SHEL) 2,594.00p 1.31%

FTSE 100 - Fallers

Reckitt Benckiser Group (RKT) 4,368.00p -4.52%
Fresnillo (FRES) 441.40p -4.29%
Airtel Africa (AAF) 91.35p -3.28%
Burberry Group (BRBY) 1,230.00p -2.07%
Persimmon (PSN) 1,263.00p -2.06%
Taylor Wimpey (TW.) 137.05p -1.62%
DCC (CDI) (DCC) 5,648.00p -1.47%
Diageo (DGE) 2,827.50p -1.43%
Barratt Developments (BDEV) 464.90p -1.40%
Frasers Group (FRAS) 785.50p -1.26%

FTSE 250 - Risers

PureTech Health (PRTC) 223.00p 9.31%
Close Brothers Group (CBG) 347.20p 3.89%
Indivior (INDV) 1,663.00p 3.68%
Wood Group (John) (WG.) 151.90p 2.98%
Bytes Technology Group (BYIT) 538.00p 2.57%
W.A.G Payment Solutions (WPS) 73.80p 2.50%
Keller Group (KLR) 1,030.00p 2.39%
FirstGroup (FGP) 179.30p 2.17%
Abrdn (ABDN) 141.35p 2.09%
Abrdn Private Equity Opportunities Trust (APEO) 542.00p 2.06%

FTSE 250 - Fallers

Crest Nicholson Holdings (CRST) 203.60p -9.11%
Essentra (ESNT) 165.40p -4.72%
Ferrexpo (FXPO) 47.54p -3.92%
Diversified Energy Company (DEC) 888.50p -3.79%
Watches of Switzerland Group (WOSG) 366.40p -3.07%
OSB Group (OSB) 381.20p -2.90%
SDCL Energy Efficiency Income Trust (SEIT) 60.70p -2.72%
Ibstock (IBST) 145.10p -2.68%
Carnival (CCL) 1,132.50p -2.66%
Moneysupermarket.com Group (MONY) 227.80p -2.65%