London close: Stocks mixed as pound pops higher

The FTSE 100 ended the session down 0.1% at 7,019.67, while the FTSE 250 eked out gains of 0.08% to 22,659.04.

Sterling was in the green, last trading 0.44% stronger on the dollar at $1.4181, and gaining 0.41% against the euro to €1.1628.

“Another largely uninspiring day on the markets today, with European markets stuck in neutral gear waiting for a fresh driver of sentiment,” said IG senior market analyst Joshua Mahony.

“With the VIX closing in on levels not seen since the pandemic began, there is undoubtedly a lack of any particular conviction despite ongoing improvements in the US economic front.

“Today has seen better-than-expected data released from the US, with another drop in jobless claims and a 1% rise in core durable goods serving to highlight the improvements seen in April and May.”

Mahony noted that the dollar was lifted by that improved data, with traders casting aside haven concerns to instead focus on the prospect that the figures could help drive further tapering talk.

“Commentary from [Randal] Quarles that tapering will be a key topic at coming meetings does provide a reason for hesitancy amongst traders, with monetary tightening likely to become an increasingly important issue in the second half of 2021.”

The pound popped higher in afternoon trading, after Bank of England policymaker Gertjan Vlieghe said the Bank was most likely to start raising interest rates "well into" next year.

In remarks made at a lecture at the University of Bath, published by the BoE, Vlieghe said the Bank could make a move earlier in 2022 if the economy bounced back faster than expected.

“My central scenario is that the economy evolves similarly to the Monetary Policy Committee’s central projection in May, but with somewhat more slack than in the central projection,” Vlieghe said.

“Relative to the MPC’s central projection, I worry that the transition out of furlough does involve a modest rise in the unemployment rate, while the economy’s supply potential is somewhat less adversely affected, so that there is still some excess supply around the turn of the year.”

UK restaurants, meanwhile, saw a massive surge in bookings as lockdown curbs were eased by the government earlier in the month, according to fresh data from the Office for National Statistics.

Bookings in the week ended 24 May were 132% higher than their level two years earlier, before the pandemic struck.

That was an increase of 59 percentage points from the prior week, and was the highest level seen since the week ended 31 August 2020, around the time of the government’s controversial ‘Eat Out to Help Out’ scheme.

“This latest week's substantial increase follows the reopening of indoor dining in England, Wales, and Scotland on 17 May and continues the rise in seated diner estimates observed since the first reopening of pubs and restaurants in England on 12 April,” the ONS said.

In equity markets, Rolls-Royce was up 3.9% after Airbus said it was ramping up aircraft production as the aviation sector began to recover.

GKN owner Melrose and Meggitt were also trading higher, by 3.63% and 3.09%, respectively.

Aviva gained 3.23% after saying new life business premiums were flat year-on-year in the first quarter, with growth in savings and retirement and lower volumes of annuities and equity release in a subdued market compared to a strong start in 2020.

Industrial software group Aveva was boosted 0.94% by an upgrade to ‘overweight’ from ‘neutral’ at Barclays.

Ferrexpo jumped 5.74%, as iron prices bounced off recent lows.

Pets at Home Group squeezed ahead 0.04% as it increased its final dividend by 10% and predicted a big jump in annual profit, after reporting strong trading fuelled by people buying pets during the pandemic.

On the downside, Johnson Matthey fell 3.56% as it reported a 22% decline in full-year pre-tax profit.

Water company United Utilities Group lost 1.18% as it raised its dividend in line with its policy, but reported a 21% drop in annual profit caused mainly by lower water bills.

Tate & Lyle was in the red by 6.07%, even as it posted a 6% rise in adjusted annual profits, driven by double-digit growth in its food and beverage division.

Gold miner Centamin lost 5.98% after an initiation at ‘sell’ by Liberum.

Market Movers

FTSE 100 (UKX) 7,019.67 -0.10%
FTSE 250 (MCX) 22,659.04 0.08%
techMARK (TASX) 4,381.87 0.19%

FTSE 100 - Risers

Antofagasta (ANTO) 1,579.00p 4.92%
Glencore (GLEN) 321.75p 4.63%
Ashtead Group (AHT) 5,174.00p 4.42%
Fresnillo (FRES) 913.00p 3.94%
Rolls-Royce Holdings (RR.) 107.06p 3.90%
Melrose Industries (MRO) 170.15p 3.63%
Aviva (AV.) 410.90p 3.23%
M&G (MNG) 240.90p 3.11%
Lloyds Banking Group (LLOY) 49.90p 3.08%
Rio Tinto (RIO) 6,074.00p 2.71%

FTSE 100 - Fallers

Johnson Matthey (JMAT) 3,037.00p -3.56%
Imperial Brands (IMB) 1,618.00p -3.35%
Taylor Wimpey (TW.) 167.00p -3.27%
Intertek Group (ITRK) 5,480.00p -2.97%
Severn Trent (SVT) 2,454.00p -2.85%
DCC (CDI) (DCC) 6,026.00p -2.81%
Croda International (CRDA) 6,924.00p -2.79%
Unilever (ULVR) 4,208.50p -2.64%
Barratt Developments (BDEV) 739.20p -2.53%
London Stock Exchange Group (LSEG) 7,354.00p -2.47%

FTSE 250 - Risers

Ferrexpo (FXPO) 468.20p 5.74%
Sirius Real Estate Ltd. (SRE) 101.20p 5.57%
Hammerson (HMSO) 39.05p 5.54%
Aston Martin Lagonda Global Holdings (AML) 2,123.00p 5.46%
Investec (INVP) 305.50p 4.55%
Savills (SVS) 1,235.00p 4.40%
Future (FUTR) 2,952.00p 4.06%
Euromoney Institutional Investor (ERM) 1,026.00p 3.55%
IP Group (IPO) 122.00p 3.39%
Trainline (TRN) 282.00p 3.22%

FTSE 250 - Fallers

Tate & Lyle (TATE) 765.00p -6.07%
Centamin (DI) (CEY) 113.90p -5.98%
Softcat (SCT) 1,855.00p -4.72%
Diversified Energy Company (DEC) 106.00p -3.81%
Plus500 Ltd (DI) (PLUS) 1,515.50p -3.69%
Electrocomponents (ECM) 996.00p -3.58%
Diploma (DPLM) 2,938.00p -3.44%
4Imprint Group (FOUR) 2,815.00p -2.76%
IntegraFin Holding (IHP) 541.00p -2.71%
Bytes Technology Group (BYIT) 496.80p -2.68%