London close: Stocks mixed as weaker pound lifts FTSE 100

The FTSE 100 rose 0.21% to finish the day at 7,441.72, while the FTSE 250 fell 0.37% to end at 18,383.85.

In currency markets, sterling was last down 0.22% on the dollar, trading at $1.2479, while it had dipped 0.03% against the euro to change hands at €1.1656.

“European markets initially started the day on the back foot after another set of poor trade numbers from China in August,” said CMC Markets chief market analyst Michael Hewson.

“We did see an improvement from July with declines in imports of -8.8% and a -7.3% decline in exports.

“While better than the consensus view, the numbers still pointed to weak demand from a domestic as well as international standpoint, which may well explain why basic resources are acting as a drag.”

Hewson noted that real estate was also underperforming, after data showing UK house prices saw their biggest percentage decline in over a decade, as high interest rates continued to bite.

“We’ve started to see a modest rebound off the lows, in what has been another choppy session, largely due to the weakness of the pound which slipped below the 1.2500 level for the first time since early June, as the FTSE 100 looks to carve out a gain for the first time in a week.”

UK house prices experience steepest fall since 2009; eurozone economy stagnates

In economic news, the UK's housing market experienced its most significant setback since 2009, with data from Halifax revealing a 4.6% annual drop in house prices for August.

The decline followed a 2.5% decrease in July.

August's figures showed a monthly slump of 1.2% - the largest since November 2022, surpassing the prior month's 0.4% decrease.

Currently, an average UK home stood at £279,569, marking a decline of roughly £14,000 over the last year.

Halifax pinpointed southern England and Wales as the areas most affected, while Scotland's property market remained relatively robust.

“Market activity levels slowed during August, and while there is always a seasonality effect at this time of year, it also isn’t surprising given the pace of mortgage rate increases over June and July,” said Kim Kinnaird, director at Halifax Mortgages.

“While these did ease last month, rates remain much higher compared to recent years.

“This may well have prompted prospective buyers to defer transactions in the hope of some stability, and greater clarity on the future direction of rates in the coming months.”

Kinnaird said the market would continue to rebalance until it found an equilibrium where buyers were comfortable with mortgage costs in a higher range than seen over the last 15 years.

“We do expect further downward pressure on property prices through to the end of this year and into next, in line with previous forecasts.”

On the continent, the eurozone economy showed marginal growth during the second quarter, with a worrying hint of an impending recession.

Eurostat reported a mere 0.1% GDP expansion between April and June, marking a downward adjustment from its initial 0.3% growth estimate.

Annually, GDP growth decelerated to 0.5% from the 1.1% observed in the first quarter.

In Germany, industrial production stumbled yet again in July, as the manufacturing sector grappled with the detrimental impacts of inflation and rising costs.

Data for July showed a decline of 0.8%, primarily influenced by capital and consumer goods sectors, surpassing analysts' predictions of a 0.4% to 0.5% downturn.

Over a three-month assessment, production from May to July was seen as 1.9% lower than the preceding three months.

Across the pond, the US job market showed signs of resilience, as the Department of Labor reported an unexpected decline in the initial jobless claims, reaching their lowest since February.

Applications for unemployment benefits dipped by 13,000, amounting to 216,000 for the week ended 2 September, as opposed to the previous week's revised 229,000.

Finally on data, China's export activities showed persistent weakening for the fourth consecutive month in August, as the nation grappled with subdued demand and ongoing supply chain disruptions post-Covid.

The August data showed an 8.8% decrease, totaling $284.9bn in exports, though slightly improved from July's 14.5% drop.

Furthermore, import activities shrunk by 7.3% to $216.5bn, a more modest decrease than the anticipated 8.2% and July's recorded 12.4% decline.

Melrose Industries and Direct Line soar, miners and insurers face pressure

On London’s equity markets, Melrose Industries jumped 5.34% after an optimistic amendment to its annual outlook, with trading that had surpassed expectations.

That was attributed in part to unexpectedly high margins in the firm's engines division.

Direct Line Insurance Group surged 15.09% after the insurer decided to implement a 25% premium hike for drivers, aimed at boosting operating profit for the subsequent year.

On the downside, the mining sector was in the red as major players Anglo American, Rio Tinto and Antofagasta faced falls of 2.9%, 2.63%, and 2.04%, respectively.

Insurance firm Beazley dropped 2.61%, after boasting record profits in the first half of the year, but reporting an increased combined ratio, causing investor concern.

London Stock Exchange Group declined 2.35% after significant stakeholders Blackstone and Thomson Reuters offloaded shares worth around £2.75bn.

Paper and packaging specialist Smurfit Kappa Group was off 3.36% after the company confirmed ongoing merger dialogues with its American counterpart, WestRock.

The pet care market felt the jolt as Pets at Home Group dropped 8.63%.

That decline followed the Competition and Markets Authority's announcement of an investigation into the veterinary services arena for domestic pets.

Self-storage operator Safestore Holdings was in the red, with a warning that full-year earnings could hit the lower spectrum of analysts' predictions contributing to a 6.67% decline.

Chemical company Synthomer plunged 24.74% after it unveiled a £276m rights issue.

Elsewhere, equities including Prudential, Admiral Group, DS Smith, Harbour Energy, and TBC Bank were all below the waterline as they traded ex-dividend.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,441.72 0.21%
FTSE 250 (MCX) 18,383.85 -0.37%
techMARK (TASX) 4,262.07 0.21%

FTSE 100 - Risers

Melrose Industries (MRO) 537.20p 5.54%
Rolls-Royce Holdings (RR.) 223.80p 4.24%
National Grid (NG.) 994.80p 2.22%
Relx plc (REL) 2,695.00p 2.20%
DCC (CDI) (DCC) 4,382.00p 2.17%
Centrica (CNA) 159.30p 2.08%
AstraZeneca (AZN) 10,824.00p 2.06%
Sage Group (SGE) 1,009.00p 1.88%
United Utilities Group (UU.) 944.40p 1.88%
Severn Trent (SVT) 2,410.00p 1.77%

FTSE 100 - Fallers

Smurfit Kappa Group (CDI) (SKG) 3,096.00p -3.79%
JD Sports Fashion (JD.) 134.25p -3.63%
Smith (DS) (SMDS) 294.00p -3.45%
Prudential (PRU) 903.40p -3.19%
Anglo American (AAL) 2,025.50p -2.90%
Ocado Group (OCDO) 823.40p -2.79%
Rio Tinto (RIO) 4,847.00p -2.64%
Entain (ENT) 1,130.50p -2.42%
Endeavour Mining (EDV) 1,555.00p -2.08%
Airtel Africa (AAF) 113.30p -2.07%

FTSE 250 - Risers

Direct Line Insurance Group (DLG) 173.85p 15.82%
Darktrace (DARK) 383.40p 6.50%
Vistry Group (VTY) 796.00p 3.11%
Chemring Group (CHG) 300.00p 2.92%
Mitie Group (MTO) 103.40p 2.58%
Barr (A.G.) (BAG) 496.00p 2.48%
Marshalls (MSLH) 266.40p 1.99%
SThree (STEM) 351.50p 1.88%
Babcock International Group (BAB) 395.00p 1.80%
FirstGroup (FGP) 153.40p 1.79%

FTSE 250 - Fallers

Synthomer (SYNT) 45.00p -25.99%
Pets at Home Group (PETS) 343.20p -9.35%
Genus (GNS) 2,062.00p -7.70%
Safestore Holdings (SAFE) 804.00p -6.67%
Harbour Energy (HBR) 241.00p -5.16%
Digital 9 Infrastructure NPV (DGI9) 55.50p -3.98%
Warehouse Reit (WHR) 80.80p -3.92%
Morgan Advanced Materials (MGAM) 249.00p -3.68%
Baltic Classifieds Group (BCG) 200.00p -3.38%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 135.20p -3.15%