London stocks finished the three-day week lower on Wednesday, as investors mulled a slew of data, and looked ahead to the Platinum Jubilee bank holiday.
The FTSE 100 ended the session down 0.98% at 7,532.95, and the FTSE 250 was off 0.71% at 20,272.90.
Sterling was also in the red, last trading down 1.03% on the dollar at $1.2472, and losing 0.2% against the euro to €1.1717.
“It looks like it’ll be 7,600 and no further for the FTSE 100 ahead of the UK’s Jubilee holiday,” said IG chief market analyst Chris Beauchamp.
“UK markets have been in no mood for celebrations today, running out of steam after last week’s rebound and suggesting that we are in for more losses as June gets underway.
“It looks like investors remain much more cautious about chasing gain in equities, and if anything remain firmly averse to recommitting themselves to stocks as the outlook for growth and inflation continues to worsen.”
In economic news, investors were digesting the news that UK manufacturing growth slowed to its weakest pace in seven months in May, as output, new orders and employment rose at weaker rates.
The seasonally-adjusted S&P Global/CIPS UK manufacturing purchasing managers’ index (PMI) came in at 54.6 for the month – unchanged from the earlier flash estimate, and down from 55.8 in April.
It was still, however, above the 50-point level that separates expansion from contraction, where it has remained for 24 months.
“The rate of expansion in UK manufacturing output eased to a seven-month low in May as companies face a barrage of headwinds,” said Rob Dobson, director at S&P Global Market Intelligence.
“Factories are reporting a slowdown in domestic demand, falling exports, shortages of inputs and staff, rising cost pressures and heightened concern about the outlook given geopolitical uncertainties.
“The consumer goods sector was especially hard hit, as household demand slumped in response to the ongoing cost of living crisis.”
Elsewhere, the latest BRC-Nielsen IQ shop price index showed that food price inflation reached a 10-year high in May.
Food inflation rose to 4.3% from 3.5% in April, marking the highest rate since April 2012, with fresh food inflation rising 4.5% from 3.4%, while ambient food inflation pushed up to 4% in May from 3.5% a month earlier.
Shop price annual inflation accelerated to 2.8% in May from 2.7% the month before, marking the highest rate of inflation since July 2011.
“Retailers have been working hard to protect their customers from these rising costs, particularly at a time when households are being impacted by a huge rise in household energy bills,” said BRC chief executive Helen Dickinson.
“It is likely to get worse before it gets better for consumers with prices continuing to rise and a further jump in energy costs coming in October.
“With little sign that the cost burden on retailers will ease any time soon, they will be left with little room for manoeuvre, especially those whose supply chains are affected by lockdowns in China and the war in Ukraine.”
Still on data, the latest survey from Nationwide showed that house prices grew for a 10th consecutive month in May, but the rate of growth appeared to be slowing as the ongoing cost of living crisis looked set to weigh on prices.
On the continent, German retail sales plunged far beyond expectations in May, as rising consumer prices and lockdowns in China took their toll.
According to Destatis, retail sales slumped 5.4% month-on-month, making for the biggest fall in a year, seriously beating market forecasts for a 0.2% decline.
Eurozone manufacturing growth, meanwhile, fell to an 18-month low in May, with orders down for the first time in nearly two years amid inflationary pressures.
The S&P Global eurozone manufacturing purchasing managers’ index declined to 54.6 from 55.5 in April.
Finally, China’s Caixin general manufacturing purchasing managers index increased to 49.1 in May, up from April’s 26-month low of 46.0 to beat market forecasts of 48.0.
However, May’s reading also marked the third consecutive monthly decline in factory activity, due to stringent Covid-19 control measures, as both output and new orders fell, albeit at a softer rate, amid further declines in both export orders and employment.
On London’s equity markets, iconic bootmaker Dr. Martens rocketed 19.59% by the close after it posted a surge in annual pre-tax profits, driven by a “very strong performance” in the Americas and Europe, the Middle East and Africa.
Retailer Frasers Group ticked 1.09% after it announced the acquisition of embattled online womenswear retailer Missguided for £20m in cash.
BT Group managed gains of 0.19%, even after the Competition and Markets Authority said it was launching an investigation into the planned sports broadcasting joint venture between it and Warner Bros. Discovery.
On the downside, Tullow Oil reversed earlier gains to close down 2.01%, after it agreed to buy Capricorn Energy in an all-share deal.
Under the terms of the transaction, Capricorn shareholders would be entitled to 3.8068 new Tullow shares for each of their Capricorn shares.
Vodafone Group was 2.97% weaker as JPMorgan said its near-term growth outlook was underwhelming.
“Following several years of ongoing European service revenue decline, March saw Vodafone finally creep back into positive growth territory,” JPMorgan said.
“Unhelpfully, the analysis within this report suggests near-term headwinds in Germany are likely to more than offset improvements elsewhere, leaving the growth outlook screening both underwhelming and barely positive.”
Unilever was also on the back foot by 3.14%, having surged a day earlier after the consumer goods giant added billionaire investor Nelson Peltz – the founder and chief executive of Trian Fund Management – to its board as a non-executive director.
Trian owns a 1.5% stake in the company.
Elsewhere, John Wood Group tumbled 6.37% after it agreed to sell its Built Environment consulting business to WSP for around $1.9bn.
The company said proceeds from the sale will be used to reduce net debt and strengthen the balance, and “provide financial flexibility” to deliver its strategy.
Pets at Home fell 2.36% after it announced the appointment of Lyssa McGowan as group chief executive with immediate effect.
She was succeeding Peter Pritchard, who announced his intention to step down in November last year after 11 years at the company.
Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk and Iain Gilbert.
Market Movers
FTSE 100 (UKX) 7,532.95 -0.98%
FTSE 250 (MCX) 20,272.90 -0.71%
techMARK (TASX) 4,383.63 -0.90%
FTSE 100 – Risers
BAE Systems (BA.) 778.20p 2.94%
Rolls-Royce Holdings (RR.) 88.73p 2.35%
Bunzl (BNZL) 2,811.00p 1.59%
Antofagasta (ANTO) 1,495.00p 1.18%
British American Tobacco (BATS) 3,536.50p 0.99%
Berkeley Group Holdings (The) (BKG) 4,238.00p 0.90%
Reckitt Benckiser Group (RKT) 6,180.00p 0.68%
Endeavour Mining (EDV) 1,804.00p 0.67%
Lloyds Banking Group (LLOY) 45.12p 0.52%
Standard Chartered (STAN) 632.80p 0.48%
FTSE 100 – Fallers
Flutter Entertainment (CDI) (FLTR) 9,254.00p -4.90%
National Grid (NG.) 1,121.00p -4.27%
St James’s Place (STJ) 1,247.50p -3.59%
London Stock Exchange Group (LSEG) 7,144.00p -3.49%
Whitbread (WTB) 2,629.00p -3.45%
Ashtead Group (AHT) 4,011.00p -3.42%
Royal Mail (RMG) 300.30p -3.32%
Experian (EXPN) 2,568.00p -3.31%
Unilever (ULVR) 3,705.00p -3.14%
Relx plc (REL) 2,207.00p -3.03%
FTSE 250 – Risers
Dr. Martens (DOCS) 258.80p 19.59%
Ferrexpo (FXPO) 186.90p 6.98%
RHI Magnesita N.V. (DI) (RHIM) 2,566.00p 6.47%
Helios Towers (HTWS) 118.00p 3.69%
Babcock International Group (BAB) 350.00p 3.67%
Drax Group (DRX) 688.50p 2.90%
Mediclinic International (MDC) 399.60p 2.72%
IntegraFin Holding (IHP) 309.80p 2.72%
Vesuvius (VSVS) 361.00p 2.27%
Chemring Group (CHG) 358.00p 2.12%
FTSE 250 – Fallers
Baltic Classifieds Group (BCG) 144.20p -6.61%
Synthomer (SYNT) 307.00p -6.46%
Wood Group (John) (WG.) 223.40p -6.37%
NB Private Equity Partners Ltd. (NBPE) 1,440.00p -4.95%
JTC (JTC) 709.00p -4.85%
Ninety One (N91) 215.20p -4.78%
IP Group (IPO) 83.05p -4.70%
Auction Technology Group (ATG) 970.00p -4.34%
Chrysalis Investments Limited NPV (CHRY) 129.80p -4.14%
Liontrust Asset Management (LIO) 1,070.00p -4.12%
