London stocks were still a little firmer by midday on Monday despite a grim consumer confidence survey, underpinned by solid gains in the housebuilding sector.
The FTSE 100 was up 0.2% at 7,549.93, with all eyes still on the Ukraine conflict amid news the U is preparing to impose further sanctions against Russia followings reports that its troops executed unarmed civilians in Ukrainian towns.
Russ Mould, investment director at AJ Bell, said: “With the calendar looking thin on big corporate announcements, the market’s focus this week, beyond events in Ukraine, is likely to be drawn to two releases in the US.
“Tomorrow sees the release of PMI data for the country’s services sector, while on Wednesday the minutes of the latest US Federal Reserve meeting are published. These will be trawled for insight into the balance the Fed is looking to draw between tackling inflation and not pushing too hard on rates so that the economy slips into recession.”
On the home front, the latest survey from PwC showed that consumer confidence suffered its biggest fall in March since the financial crisis of 2008 as worries about inflation and disposable income took their toll.
The consumer sentiment index declined to -20 after peaking at +10 in June last year. This 30-point drop in nine months marks the biggest sustained fall since the financial crisis, although the index remains higher than it was at the start of the pandemic, when it stood at -26. This time last year, the index stood at +8 amid the prospect of lockdown easing.
The survey showed that spending expectations on going out and eating out have dropped significantly, with both categories now the lowest. Meanwhile, holidays and fashion spending have also seen substantial falls since last Spring.
Grocery shopping was the only category where people expect to spend more, rather than less in the next 12 months. However, this is likely to be driven almost exclusively by inflation, rather than specifically heightened consumer demand.
The survey also found that sentiment has fallen in almost every age group, but the gap between the most and least optimistic is wider than ever.
Lisa Hooker, consumer markets Leader at PwC, said: “The shift in sentiment is both significant and sudden. Whilst there is still some post-Covid recovery, spending expectations on eating out and going out have plummeted as consumers look to tighten their belt as they face up to cost of living pressures. Even after the extensive travel disruption over the last two years, holiday spending is not immune and will consumers prioritise their main holiday over other breaks, like we saw during the global financial crisis?”
In equity markets, housebuilders surged following a report the government is dropping its demand for them to contribute towards a £4bn cladding remediation fund. Barratt, Persimmon, Taylor Wimpey, Redrow, Crest Nicholson, Bellway and Vistry were all sharply higher.
Endeavour Mining rose after saying it was set to start construction of the $290m expansion of its Sabodala-Massawa gold project in Senegal.
B&Q owner Kingfisher was boosted by an upgrade to ‘buy’ from ‘hold’ at Deutsche Bank, while Just Group surged after an upgrade to ‘overweight’ at Barclays.
On the downside, BA owner IAG and budget airline easyJet were both sharply lower after saying they had been forced to cancel dozens of flights due to Covid-related staff absences.
Mould said: “If the current disruption continues into the Easter weekend, we could easily see airlines like EasyJet have to downgrade their earnings forecasts. Making matters worse is the fact that oil prices remain stubbornly high which is putting pressure on fuel costs. Ryanair is clearly concerned about the situation given how it has announced increased fuel hedging.”
NatWest was weaker following a Sky News report over the weekend that it is considering a£3bn takeover bid for wealth manager Tilney Smith & Williamson.
Aviva was in the red after a downgrade to ‘equalweight’ at Barclays.
Market Movers
FTSE 100 (UKX) 7,552.10 0.19%
FTSE 250 (MCX) 21,298.36 0.38%
techMARK (TASX) 4,348.73 0.55%
FTSE 100 – Risers
Barratt Developments (BDEV) 550.60p 6.25%
Endeavour Mining (EDV) 2,020.00p 5.43%
Persimmon (PSN) 2,260.00p 5.21%
Berkeley Group Holdings (The) (BKG) 3,913.00p 4.96%
Taylor Wimpey (TW.) 137.40p 4.69%
Rightmove (RMV) 659.40p 3.84%
Airtel Africa (AAF) 146.00p 3.18%
B&M European Value Retail S.A. (DI) (BME) 550.60p 3.07%
Hargreaves Lansdown (HL.) 1,015.00p 3.02%
BAE Systems (BA.) 730.40p 2.33%
FTSE 100 – Fallers
Standard Chartered (STAN) 501.00p -1.73%
Aviva (AV.) 438.10p -1.46%
M&G (MNG) 219.50p -1.39%
Lloyds Banking Group (LLOY) 46.75p -1.35%
Antofagasta (ANTO) 1,669.50p -1.24%
NATWEST GROUP PLC ORD 100P (NWG) 215.50p -1.10%
Rio Tinto (RIO) 6,157.00p -1.09%
International Consolidated Airlines Group SA (CDI) (IAG) 139.78p -0.99%
Vodafone Group (VOD) 125.18p -0.97%
HSBC Holdings (HSBA) 523.80p -0.96%
FTSE 250 – Risers
Just Group (JUST) 96.20p 6.71%
Redrow (RDW) 546.50p 5.71%
Crest Nicholson Holdings (CRST) 283.20p 5.04%
PureTech Health (PRTC) 215.50p 4.87%
Bellway (BWY) 2,558.00p 4.79%
Vistry Group (VTY) 986.50p 4.50%
Countryside Partnerships (CSP) 284.60p 4.33%
Indivior (INDV) 296.40p 4.00%
Trainline (TRN) 266.40p 3.62%
888 Holdings (888) 200.80p 3.40%
FTSE 250 – Fallers
Clarkson (CKN) 3,565.00p -3.65%
Standard Life Private Equity Trust (SLPE) 504.00p -3.08%
SSP Group (SSPG) 221.20p -2.51%
Baltic Classifieds Group (BCG) 141.40p -2.08%
Helios Towers (HTWS) 117.40p -2.00%
Liontrust Asset Management (LIO) 1,282.00p -1.99%
CMC Markets (CMCX) 248.50p -1.97%
Clipper Logistics (CLG) 858.00p -1.94%
Ferrexpo (FXPO) 191.70p -1.84%
Bridgepoint Group (Reg S) (BPT) 358.40p -1.81%
