London close: Stocks turn negative as caution returns

Sentiment had started the day rosier after Australia's central bank decided to hold interest rates steady.

The FTSE 100 was down 0.5% to close at 7,634.52, while the FTSE 250 slipped 0.34% to 18,815.04.

Sterling was meanwhile in the green, last rising 0.62% on the dollar to trade at $1.2491, while gaining 0.16% against the euro to change hands at €1.1409.

“The FTSE 100 has fallen back from the highs seen yesterday, joining in a more cautious tone on Wall Street,” said IG chief market analyst Chris Beauchamp.

“This comes despite weaker job openings and factory orders that might have been expected to prop up stocks on hopes of a more dovish Fed at upcoming meetings.

“But for the moment, it looks like stocks have come too far, too fast to push much higher in the near-term.”

Australia hits pause on rate hike cycle, US jobs market eases

In economic news, the Reserve Bank of Australia kept interest rates unchanged at 3.6% overnight, following 10 hikes since May last year.

The central bank's governor Philip Lowe said some further tightening of monetary policy might still be required, however, to ensure that inflation returned to its target range of 2% to 3%.

He acknowledged that the outlook for the global economy remained subdued, with below-average growth expected this year and next.

“In light of recent market turmoil, it’s not too surprising to see the Reserve Bank of Australia decide to take a pause when it comes to its own rate hiking cycle,” said CMC Markets analyst Michael Hewson.

“That decision became a lot easier last week, when a fall in headline inflation back to 6.8% in February suggested that the spike up to 8.4% in December may well have been a one-off, giving policymakers’ confidence that a pause was appropriate.”

In the eurozone, industrial producer prices fell by more than expected in February, according to official data from Eurostat.

Industrial prices decreased 0.5% compared to January, driven by a 1.6% drop in energy prices.

However, when stripping out energy, total industry prices increased 0.2%.

Year-on-year, industrial producer prices rose 13.2% and 14.5% in the eurozone and the wider European Union, respectively.

Producer prices in Germany, France, and Italy fell, while Spain saw an increase of 2.2%.

Germany's trade surplus was meanwhile steady at €16bn in February, with exports and imports both increasing slightly.

Exports rose 4% month on month to €136.7bn, while imports increased by 4.6% to €120.7bn.

Finally on data, the US jobs market showed some signs of easing in February, according to the Department of Labor.

Job openings dropped by nearly 6% month on month to 9.931 million - the first reading below 10 million since May 2021.

Hiring fell 2.6% over the month to 6.163 million, while the number of voluntary separations increased by 3.8% to 4.024 million.

The quits rate rose by one-tenth of a percentage point to 2.6%.

“February's JOLTS report is an indication that the softening in the labour market may be gaining some momentum,” said Matthew Martin at Oxford Economics.

“While the Fed will welcome the softening in the data, officials will put much more stock in Friday's employment report and will continue to raise rates at the coming meetings to ensure further progress is made toward softer labour market conditions and lower inflation.”

Glencore rises despite Teck rejection, Vodafone stumbles

On London’s equity markets, Glencore rose 1.67% after Canada's Teck Resources rejected an unsolicited takeover approach from the mining giant.

“While its business combination proposal was rejected, Glencore is likely to be persistent in its pursuit for greater things which means one cannot rule out a higher offer,” said Danni Hewson, head of financial analysis at AJ Bell.

“Teck’s board said it wasn’t contemplating a sale of the business at this time, yet there is a price for everything and so it all boils down to how much Glencore is prepared to pay.”

Investec Group and Rathbones Group also saw their shares increase, by 1.57% and 1.8%, respectively, after agreeing to merge in an £839m all-share deal.

Digital 9 Infrastructure rose following its efforts to reassure investors amidst continued volatility in its share price, while Auto Trader Group and Drax Group saw gains due to an upgrade and upbeat note by JPMorgan and Liberum, respectively.

On the downside, Pennon Group slipped 0.35% after a downgrade to "equalweight" by Morgan Stanley, while Virgin Money UK fell 2.39% despite an upgrade to "outperform" at KBW.

Vodafone Group's shares were also weaker, falling 2.21% after Citi resumed coverage of the stock at "neutral" following a period of restriction.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,634.52 -0.50%
FTSE 250 (MCX) 18,815.04 -0.34%
techMARK (TASX) 4,509.27 -0.50%

FTSE 100 - Risers

Fresnillo (FRES) 770.40p 2.86%
Haleon (HLN) 331.00p 2.59%
Glencore (GLEN) 460.05p 1.67%
London Stock Exchange Group (LSEG) 7,852.00p 1.45%
Admiral Group (ADM) 2,078.00p 1.32%
Endeavour Mining (EDV) 2,048.00p 1.29%
Experian (EXPN) 2,688.00p 1.17%
Hiscox Limited (DI) (HSX) 1,112.00p 1.09%
Auto Trader Group (AUTO) 619.60p 1.08%
National Grid (NG.) 1,103.00p 1.01%

FTSE 100 - Fallers

Ashtead Group (AHT) 4,630.00p -5.72%
Johnson Matthey (JMAT) 1,933.00p -3.40%
Rolls-Royce Holdings (RR.) 145.50p -2.77%
Vodafone Group (VOD) 87.48p -2.21%
British American Tobacco (BATS) 2,811.50p -2.12%
Antofagasta (ANTO) 1,525.50p -2.09%
Ocado Group (OCDO) 513.60p -1.98%
BT Group (BT.A) 144.35p -1.94%
Scottish Mortgage Inv Trust (SMT) 655.40p -1.92%
Shell (SHEL) 2,359.00p -1.91%

FTSE 250 - Risers

Digital 9 Infrastructure NPV (DGI9) 65.30p 6.19%
Moneysupermarket.com Group (MONY) 249.00p 2.81%
FirstGroup (FGP) 107.00p 2.69%
Direct Line Insurance Group (DLG) 143.45p 2.50%
SDCL Energy Efficiency Income Trust (SEIT) 86.60p 2.36%
SSP Group (SSPG) 251.40p 2.20%
Drax Group (DRX) 605.40p 2.09%
Kainos Group (KNOS) 1,359.00p 1.95%
Target Healthcare Reit Ltd (THRL) 73.50p 1.94%
Telecom Plus (TEP) 1,890.00p 1.94%

FTSE 250 - Fallers

TUI AG Reg Shs (DI) (TUI) 574.60p -6.02%
Ferrexpo (FXPO) 111.60p -5.98%
Genuit Group (GEN) 269.50p -5.93%
Vanquis Banking Group 20 (VANQ) 216.00p -5.26%
Renishaw (RSW) 3,850.00p -5.10%
Aston Martin Lagonda Global Holdings (AML) 222.40p -4.55%
Ithaca Energy (ITH) 150.40p -4.20%
TI Fluid Systems (TIFS) 105.60p -3.30%
Carnival (CCL) 690.40p -3.20%
Petershill Partners (PHLL) 164.40p -3.09%