London close: FTSE ends a little lower amid recessions fears

by | Dec 8, 2022

London stocks ended a little lower on Thursday as recession fears continued to weigh on sentiment.
The FTSE 100 closed down 0.2% at 7,472.17.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The risk-off sentiment more widely on stock markets this week remains hard to kick into touch as concerns about recession stay front and centre. The evil twins of recession and persistently higher inflation are lurking, keeping investors on edge.”

Market participants were digesting the latest residential survey from the Royal Institution of Chartered Surveyors, which showed that house prices fell across the UK last month as higher borrowing costs and the weakened economic outlook weighed on sentiment.

The survey found that a net balance of -25% of participants reported a fall in house prices during November, compared to -2% in October.

It is the lowest reading since May 2020, when the UK was in lockdown early in the pandemic, and well below consensus, for -10%. Participants also reported falls across the UK, with the exception of Scotland and Northern Ireland only.

Nor are prices expected to pick up in the coming year, with a net balance of -62% forecasting further falls.

Buyer demand also fell, with a net balance of -38%, although it was an improvement on October’s balance of -53%.

Agreed sales were lower, with a net balance of -35%, the second month in a row that respondents in every region reported a decline. It was, however, marginally stronger that October’s balance of -45%.

Simon Rubinsohn, chief economist at Rics, said: “The overall tone of the latest survey is understandably more downbeat than previously, reflecting the uncertain macro environment and the higher cost of mortgage finance.”

In equity markets, Sports Direct and House of Fraser owner Frasers Group slumped as it posted a jump in interim profits but warned over a challenging backdrop.

British American Tobacco lost ground despite saying it was on course to meet full-year guidance, after strong growth in vaping products.

BT was down as the company’s pension scheme told politicians it could require more support from the telecoms group after it made changes to its investment strategy.

On the upside, infrastructure group Balfour Beatty rallied after saying annual profit was set to be ahead of expectations due to positive net interest income and lower tax charges.

Packaging company DS Smith also gained as it lifted its full-year outlook, hailing an “excellent performance” in the first half.

In broker note action, Travis Perkins was knocked lower by a downgrade to ‘underweight’ at JPMorgan, while LSE was hit by a downgrade to ‘neutral’ at UBS. But BA and Iberia owner IAG and Wizz Air flew higher after an upgrade to ‘buy’ at Bank of America Merrill Lynch.

Market Movers

FTSE 100 (UKX) 7,472.17 -0.23%
FTSE 250 (MCX) 18,824.01 -0.56%
techMARK (TASX) 4,389.32 -0.19%

FTSE 100 – Risers

Haleon (HLN) 316.15p 3.42%
Rio Tinto (RIO) 5,780.00p 2.92%
Fresnillo (FRES) 885.40p 2.22%
Pershing Square Holdings Ltd NPV (PSH) 2,885.00p 1.94%
Hargreaves Lansdown (HL.) 850.40p 1.84%
Antofagasta (ANTO) 1,437.50p 1.73%
Glencore (GLEN) 548.60p 1.54%
Scottish Mortgage Inv Trust (SMT) 769.00p 1.37%
International Consolidated Airlines Group SA (CDI) (IAG) 134.56p 1.34%
Entain (ENT) 1,378.00p 1.25%

FTSE 100 – Fallers

Frasers Group (FRAS) 814.50p -8.99%
London Stock Exchange Group (LSEG) 7,380.00p -6.44%
Intermediate Capital Group (ICP) 1,163.00p -4.89%
BT Group (BT.A) 112.55p -3.72%
Airtel Africa (AAF) 116.80p -3.63%
British American Tobacco (BATS) 3,305.00p -3.09%
JD Sports Fashion (JD.) 123.20p -2.34%
Halma (HLMA) 2,077.00p -2.21%
Dechra Pharmaceuticals (DPH) 2,676.00p -2.19%
Vodafone Group (VOD) 85.93p -1.97%

FTSE 250 – Risers

Aston Martin Lagonda Global Holdings (AML) 146.00p 8.11%
Wizz Air Holdings (WIZZ) 2,385.00p 4.33%
SSP Group (SSPG) 230.80p 3.64%
Redde Northgate (REDD) 409.50p 3.15%
Wood Group (John) (WG.) 128.60p 2.84%
Paragon Banking Group (PAG) 512.50p 2.58%
Diversified Energy Company (DEC) 119.60p 2.48%
TUI AG Reg Shs (DI) (TUI) 144.10p 2.42%
Hipgnosis Songs Fund Limited NPV (SONG) 81.90p 2.37%
RHI Magnesita N.V. (DI) (RHIM) 2,174.00p 2.26%

FTSE 250 – Fallers

Mitchells & Butlers (MAB) 135.80p -10.19%
Synthomer (SYNT) 120.90p -6.28%
Home Reit (HOME) 47.00p -6.19%
IP Group (IPO) 58.05p -5.92%
Moonpig Group (MOON) 130.60p -5.16%
ASOS (ASC) 576.50p -5.10%
Sirius Real Estate Ltd. (SRE) 79.80p -4.66%
Shaftesbury (SHB) 341.60p -4.47%
SDCL Energy Efficiency Income Trust (SEIT) 101.00p -3.99%
Liontrust Asset Management (LIO) 1,016.00p -3.79%

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