London stocks closed in the red on Monday, after fresh data continued to paint a disappointing picture of the UK economy, and as ongoing Covid-19 lockdowns in China dented sentiment further.
The FTSE 100 ended the session down 1.88% at 7,380.54, and the FTSE 250 was off 1.35% at 20,599.22.
Sterling was also in negative territory, and was last trading down 1.03% on the dollar at $1.2707, and lost 0.17% against the euro to €1.1870.
“The global worries about slowing growth have really hit the FTSE 100 hard today, as slumping metal and oil prices drag down commodity stocks in both the mining and oil sectors,” said IG chief market analyst Chris Beauchamp.
“Friday’s selling has continued into a new week, as demand fears prompt investors to cut back sharply on these names.
“Selling is widespread across global markets and asset classes, indicating that we could be on the cusp of a much bigger leg lower that risks a return to the lows of early March for many indices.”
On the economic front, business optimism in the manufacturing sector tumbled according to new research, after growth slowed and costs surged.
According to the latest Industrial Trends Survey from the Confederation of British Industry, business optimism fell to a net balance of -34% in April, from -9% in January.
The CBI said it was the sharpest pace of decline since April 2020, at the start of the Covid crisis.
Output volumes and new orders both continued to grow, but at a slower pace that in the previous quarter.
The total orders balance was 14%, compared to 26% in March, the lowest since October and well below consensus for 22%.
Average costs, meanwhile, surged at the fastest rate since July 1975, with a net balance of 87% reporting increases, up from 74% in January.
Domestic prices grew at the sharpest pace since October 1979, with a net balance 60% compared to 40% at the start of the year.
Respondents said the price of raw materials was the most important factor behind expectations for cost growth in the next three months, followed by energy, transport and labour costs.
“The war in Ukraine is exacerbating the Covid-related supply crunch, with cost increases and concerns over the availability of raw materials at the highest since the mid-1970s,” said Anna Leach, CBI deputy chief economist.
“It’s little wonder that sentiment has deteriorated sharply and manufacturers are now scaling back their investment plans.”
Elsewhere, the Office for National Statistics reported that almost 90% of British adults reported an increase in the cost of living last month.
According to the ONS’s latest Opinions and Lifestyle Survey, 87% of respondents said their cost of living had increased between 16 to 27 March over the previous month, up from the 62% who reported a rise in November 2021.
Nearly a quarter said they had found it “very difficult or difficult” to pay their usual household bills compared to a year ago, while of those who paid energy bills, 43% reported that they had found them hard to pay.
As a result, 17% of respondents reported borrowing more money than they did a year previously, while more than half – 54% – said they were spending less on non-essential goods and services.
Still on data, average UK house asking prices hit a new record in the first three months of 2022, according to website Rightmove.
The average asking price surged by £19,082 to £360,101, with 53% of properties selling at or over their final advertised asking price – the highest percentage Rightmove said it had recorded.
Timescales to shift properties also halved over the past three years – from an average of 67 days three years ago to 33.
“With three new monthly price records in a row, 2022 has started with price rise momentum even greater than during the stamp duty holiday-fuelled market of last year,” said Tim Bannister, Rightmove’s director of property data.
“While growing affordability constraints mean that this momentum is not sustainable for the longer term, the high demand from a large number of buyers chasing too few properties for sale has led to a spring price frenzy, a hat-trick of record price months, and the largest price increase for a three-month period Rightmove has ever recorded.”
On the continent, meanwhile, a closely-watched survey showed German business sentiment unexpectedly strengthening in April, despite the ongoing war in Ukraine.
Ifo’s Business Climate Index rose to 91.8 points in April, from 90.8 in March.
The current situation index rose only marginally, to 97.2 from 97.1, but the expectations index – which tumbled last month to 84.9 from 98.7 in February – rose to 86.7.
In the latest from Ukraine, Russian forces announced a unilateral ceasefire earlier in order to allow for the evacuation of civilians from the besieged Azovstal steel plant in Mariupol, Ukraine.
The head of Russia’s National Defence Coordination Center, Mijail Mizintsev, said that Russian troops and those of the self-proclaimed independent republics of Donetsk and Luhansk would cease all hostilities and that the civilians would be allowed to head in whichever direction they chose.
However, the NDCR also insisted that in order to proceed Ukraine forces would need to signal their intention by “raising white flags”, Europa Press reported.
“If civilians remain at the steel plant, we categorically demand that authorities in Kyiv immediately issue the corresponding order to the commanders of the nationalist groups present to free them,” Mizintsev reportedly demanded.
In equities, Anglo American was down 6.85% after the Chilean environmental regulator recommended denying an extension to its Los Bronces copper project.
Chile’s Environmental Assessment Service (SEA) issued the recommendation last week, with a final decision on $3.3bn investment expected soon.
“The SEA’s recommendation is despite the strong support for the project offered to date by 23 of the 25 technical services bodies and government ministries that form part of the assessment process,” Anglo American said in a statement.
Elsewhere, real estate investor British Land was off 1.59% after it sold a 75% stake in the bulk of its Paddington Central assets to GIC for £694.0m, to establish a new joint venture between the pair.
Urban Logistics was 3.07% lower after reporting the deployment of a further £45m of capital at a blended net initial yield of 6.7% since 28 March, while LondonMetric Property slipped 0.8% after buying six London urban logistics warehouses in separate transactions for £26.7m.
Polymetal International reversed earlier gains to close down 0.93%, even after it reported a rise in first-quarter revenue, driven by higher prices and despite a fall in production.
Market Movers
FTSE 100 (UKX) 7,380.54 -1.88%
FTSE 250 (MCX) 20,599.22 -1.35%
techMARK (TASX) 4,346.72 -0.91%
FTSE 100 – Risers
Reckitt Benckiser Group (RKT) 6,316.00p 2.90%
Unilever (ULVR) 3,606.50p 1.85%
Hikma Pharmaceuticals (HIK) 2,036.00p 1.34%
Hargreaves Lansdown (HL.) 978.80p 1.24%
Dechra Pharmaceuticals (DPH) 3,764.00p 1.18%
Tesco (TSCO) 268.60p 1.13%
Sainsbury (J) (SBRY) 243.40p 1.12%
Diageo (DGE) 3,939.00p 1.08%
BT Group (BT.A) 188.20p 0.97%
Coca-Cola HBC AG (CDI) (CCH) 1,640.50p 0.86%
FTSE 100 – Fallers
Anglo American (AAL) 3,230.00p -6.85%
BP (BP.) 368.85p -6.18%
Glencore (GLEN) 449.35p -5.64%
Aveva Group (AVV) 2,381.00p -5.48%
Ashtead Group (AHT) 4,394.00p -5.28%
Prudential (PRU) 989.20p -5.25%
Shell (SHEL) 2,074.50p -5.19%
Rolls-Royce Holdings (RR.) 86.83p -5.18%
Rio Tinto (RIO) 5,372.00p -5.16%
Burberry Group (BRBY) 1,558.00p -4.68%
FTSE 250 – Risers
PureTech Health (PRTC) 191.20p 2.80%
Syncona Limited NPV (SYNC) 172.80p 1.65%
Greggs (GRG) 2,380.00p 1.36%
Indivior (INDV) 323.60p 1.25%
Wizz Air Holdings (WIZZ) 3,159.00p 1.22%
C&C Group (CDI) (CCR) 207.40p 1.17%
CMC Markets (CMCX) 284.50p 0.89%
Centrica (CNA) 79.72p 0.73%
Playtech (PTEC) 551.00p 0.73%
Marks & Spencer Group (MKS) 153.00p 0.72%
FTSE 250 – Fallers
BlackRock World Mining Trust (BRWM) 655.00p -9.15%
Tullow Oil (TLW) 52.55p -6.49%
IWG (IWG) 253.70p -6.07%
Dr. Martens (DOCS) 223.20p -5.74%
Watches of Switzerland Group (WOSG) 1,058.00p -5.28%
Hochschild Mining (HOC) 120.40p -5.27%
Ferrexpo (FXPO) 165.20p -5.22%
Apax Global Alpha Limited (APAX) 185.80p -5.01%
National Express Group (NEX) 225.00p -4.98%
Molten Ventures (GROW) 698.50p -4.11%
