London close: Stocks turn weaker in afternoon trading

London stocks fell back into the red in late trading on Wednesday, after a session which saw investors digesting the latest reading on the UK services and manufacturing sectors.
The FTSE 100 ended the session down 0.22% at 7,074.06, and the FTSE 250 was off 0.09% at 22,659.42.

Sterling was in positive territory, meanwhile, last up 0.18% on the dollar at $1.3974, and trading 0.14% stronger against the euro at €1.1697.

“Stock markets are struggling to make headway this afternoon, but another drop in crude inventories has boosted oil,” said IG chief market analyst Chris Beauchamp.

“The rebound in risk appetite continues to fizzle out, with equity indices mostly unimpressed by the ongoing high PMI readings that signal a continued economic rebound.

“Good data is still perhaps to be viewed as bad news, since it pushes central banks towards gradually tightening policy, while the swings and roundabouts of Fed pronouncements over the past week have left markets dazed and confused.”

Beauchamp said that while the Dow was still lagging, the S&P 500 was close to a record high, but without the momentum to carry it much higher, while European markets had seen more marked losses, putting Monday’s gains at risk of being given back entirely.

“At least oil can still be relied on, as yet another drop in US crude stockpiles pushes Brent and West Texas Intermediate to new multi-year highs,” Chris Beauchamp added.

“Predictions of the demise of oil, and of oil demand, have been wildly premature, and rebounding economies seemingly cannot get enough of the commodity.

“This should continue to provide a foundation for further crude oil gains this year, although a correction of some sort is wildly overdue.”

Survey data released earlier in the day showed the UK’s economic recovery continued in June, prompting a record hike in employment, although inflationary pressures gathered pace.

The IHS Markit flash UK composite output index was 61.7 in June, down on May’s final reading of 62.9, and marginally below consensus for 61.5.

It still remained among the fastest rates of expansion seen since the series began in January 1998.

The services business activity index was 61.7, compared to 62.9 in May, while the manufacturing PMI printed at 64.2 against May’s 65.6.

Manufacturing output came in at 62.0, one point lower than May’s 63.0 reading.

IHS Markit said companies had responded to rising workloads by hiring extra staff “at an unprecedented rate”, with the composite employment index reaching a record high of 58.5 in June, up on May’s 57.4.

But it also noted input costs and output prices had reached fresh highs, as supply-chain disruptions weighed heavily.

In equity markets, Royal Dutch Shell gained 1.54% after Societe Generale upgraded the shares to ‘buy’.

In other broker note action, luxury brand Burberry Group was knocked 0.27% lower by a downgrade to ‘hold’ at HSBC, while Virgin Money UK rose 1.09% after an upgrade at Investec.

Tullow Oil and Cairn Energy gushed 4.06% and 1.08% higher, respectively, after upgrades at Canaccord Genuity.

Elsewhere, housebuilder Berkeley fell 0.45% even after it reported a rise in annual profits driven by sales of new homes in London and the South East.

Phoenix Group lost 2.54% after Swiss Re sold a 6.6% stake in the company.

Market Movers

FTSE 100 (UKX) 7,074.06 -0.22%
FTSE 250 (MCX) 22,659.42 -0.09%
techMARK (TASX) 4,475.16 0.07%

FTSE 100 – Risers

JD Sports Fashion (JD.) 903.20p 1.83%
Royal Dutch Shell ‘B’ (RDSB) 1,421.80p 1.54%
Royal Dutch Shell ‘A’ (RDSA) 1,472.60p 1.38%
BT Group (BT.A) 205.30p 1.33%
Rolls-Royce Holdings (RR.) 109.44p 1.15%
Anglo American (AAL) 2,822.00p 1.07%
GlaxoSmithKline (GSK) 1,409.20p 1.03%
Auto Trader Group (AUTO) 639.60p 0.98%
Antofagasta (ANTO) 1,447.50p 0.98%
Ashtead Group (AHT) 5,214.00p 0.97%

FTSE 100 – Fallers

Melrose Industries (MRO) 158.10p -2.65%
Phoenix Group Holdings (PHNX) 676.00p -2.54%
Informa (INF) 515.80p -2.50%
Taylor Wimpey (TW.) 160.60p -2.25%
Compass Group (CPG) 1,536.00p -1.83%
Evraz (EVR) 614.80p -1.76%
Barratt Developments (BDEV) 696.80p -1.75%
Persimmon (PSN) 2,990.00p -1.72%
Fresnillo (FRES) 814.00p -1.64%
London Stock Exchange Group (LSEG) 8,098.00p -1.48%

FTSE 250 – Risers

Trainline (TRN) 303.20p 4.86%
Micro Focus International (MCRO) 523.00p 4.35%
Tullow Oil (TLW) 64.10p 4.06%
Kainos Group (KNOS) 1,386.00p 3.43%
Chrysalis Investments Limited NPV (CHRY) 243.00p 2.97%
FDM Group (Holdings) (FDM) 1,022.00p 2.92%
Morgan Advanced Materials (MGAM) 359.00p 2.87%
NCC Group (NCC) 291.50p 2.84%
Spirent Communications (SPT) 251.80p 2.69%
Savills (SVS) 1,133.00p 2.63%

FTSE 250 – Fallers

Beazley (BEZ) 325.60p -4.49%
Meggitt (MGGT) 469.40p -3.81%
RHI Magnesita N.V. (DI) (RHIM) 4,120.00p -3.11%
Shaftesbury (SHB) 595.50p -3.09%
Hiscox Limited (DI) (HSX) 829.60p -3.04%
Lancashire Holdings Limited (LRE) 634.00p -2.53%
Sirius Real Estate Ltd. (SRE) 110.40p -2.47%
TI Fluid Systems (TIFS) 310.00p -2.36%
Renishaw (RSW) 5,190.00p -2.26%
Morrison (Wm) Supermarkets (MRW) 232.90p -2.06%

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