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London close: FTSE falls but Rolls-Royce bucks trend

By Michele Maatouk

London stocks ended lower on Tuesday as a downbeat reading on the UK construction sector and worries about the pace of rate hikes in the US dented sentiment.
The FTSE 100 closed down 0.6% at 7,521.39.

Russ Mould, investment director at AJ Bell, said: “We’re very much in looking glass territory again with investors desperate for the Fed to ease up on rate hikes and therefore taking any bit of good news about the economy as bad news because it will delay the longed-for pivot.

“Better-than-expected figures from the US services sector, combined with some profit taking after a strong run, resulted in losses across the Atlantic overnight and the negativity permeated into Asian shares with some of the optimism about a loosening of Chinese restrictions also beginning to fade.

“The next key US releases come on Friday with producer prices data and a reading of consumer sentiment. Next Wednesday is decision day on US rates and the Fed’s actions could help set the tone for the tail end of 2022 and first weeks of 2023.”

On home shores, investors were mulling a survey showing that the construction sector faltered last month as higher borrowing costs and the weaker economic outlook curbed demand.

The S&P Global/CIPS UK construction purchasing managers’ index fell to 50.4 in November, from 53.2 in October. It is the third consecutive month that the index has fallen, and well below the consensus for 52.0.

A reading above 50.0 indicates growth, while a reading below suggests contraction.

The latest data from retail consultancy Kantar was also in focus, showing that food inflation eased marginally in November, the first decline in nearly two years.

Grocery price inflation eased 0.1 percentage points to 14.6% last month, the first fall in 21 months. However, it remains at record highs, with the price of a traditional Christmas dinner, including frozen turkey, sprouts, sparkling wine and cranberry sauce, now costing £31, up 9.3% on 2021.

In equity markets, broker notes were having an impact. Mondi was the worst performer on the FTSE 100 after a double downgrade to ‘underperform’ at Credit Suisse, while Close Brothers slumped after a downgrade to ‘underweight’ at JPMorgan.

United Utilities was also in the red after a downgrade to ‘neutral’ at JPM.

Online greeting card and gift retailer Moonpig was under the cosh ahead of half-year results on Wednesday.

On the upside, Rolls-Royce rallied after the US awarded its Future Long-Range Assault Aircraft, FLRAA to Textron’s V-280 Valor project. Rolls-Royce provides two AE 1107F engines to power the V-280 Valor.

Phoenix Group rose after a well-received trading statement in which it said it remains on track to deliver 2022 cash generation at the top end of its target range of £1.3bn to £1.4bn.

Barclays was higher after an upgrade to ‘overweight at JPM, while DS Smith was lifted by an upgrade to ‘outperform’ at Credit Suisse.

Travel food outlet operator SSP Group pushed up after saying it swung to a full-year profit as passenger numbers rebounded from the Covid pandemic.

Market Movers

FTSE 100 (UKX) 7,521.39 -0.61%
FTSE 250 (MCX) 19,100.08 -1.19%
techMARK (TASX) 4,377.23 -1.06%

FTSE 100 – Risers

Rolls-Royce Holdings (RR.) 93.49p 3.20%
Phoenix Group Holdings (PHNX) 610.80p 2.55%
Barclays (BARC) 158.76p 1.59%
BAE Systems (BA.) 827.60p 1.23%
Smith (DS) (SMDS) 308.90p 1.18%
Land Securities Group (LAND) 626.00p 0.71%
Ashtead Group (AHT) 5,068.00p 0.64%
Smiths Group (SMIN) 1,598.50p 0.53%
Bunzl (BNZL) 3,035.00p 0.46%
Sainsbury (J) (SBRY) 226.40p 0.44%

FTSE 100 – Fallers

Mondi (MNDI) 1,468.00p -4.74%
Scottish Mortgage Inv Trust (SMT) 760.00p -3.13%
Endeavour Mining (EDV) 1,697.00p -3.03%
Dechra Pharmaceuticals (DPH) 2,680.00p -2.97%
Halma (HLMA) 2,160.00p -2.61%
Intermediate Capital Group (ICP) 1,204.00p -2.51%
GSK (GSK) 1,387.80p -2.42%
Fresnillo (FRES) 877.60p -2.16%
Spirax-Sarco Engineering (SPX) 11,105.00p -2.07%
F&C Investment Trust (FCIT) 906.00p -2.06%

FTSE 250 – Risers

Ferrexpo (FXPO) 162.40p 5.80%
Paragon Banking Group (PAG) 486.20p 4.69%
Coats Group (COA) 69.70p 4.34%
Bank of Georgia Group (BGEO) 2,635.00p 3.13%
SSP Group (SSPG) 222.80p 2.96%
Synthomer (SYNT) 132.80p 2.15%
Home Reit (HOME) 51.00p 1.80%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 160.80p 1.77%
Abrdn (ABDN) 202.10p 1.56%
Virgin Money UK (VMUK) 178.55p 1.08%

FTSE 250 – Fallers

Darktrace (DARK) 323.90p -7.59%
Moonpig Group (MOON) 151.20p -6.95%
Clarkson (CKN) 2,890.00p -6.77%
Aston Martin Lagonda Global Holdings (AML) 131.75p -6.56%
Carnival (CCL) 675.40p -6.30%
IP Group (IPO) 63.05p -5.40%
Victrex plc (VCT) 1,686.00p -5.39%
Edinburgh Worldwide Inv Trust (EWI) 176.80p -5.07%
Vietnam Enterprise Investments (DI) (VEIL) 578.00p -4.30%
Liontrust Asset Management (LIO) 1,070.00p -4.29%

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