London close: Stocks reverse gains in late trading

by | Sep 4, 2023

(Sharecast News) – London’s leading stock indices closed in negative territory on Monday, despite opening in the green earlier in the day.
Investor optimism was initially buoyed by news of stimulus measures in China and anticipation that the US Federal Reserve would hold off on rate hikes this month.

The FTSE 100 declined 0.16% to close at 7,452.76 points, while the FTSE 250 ended the day down 0.07% at 18,524.14 points.

On the currency front, sterling was last up 0.24% on the dollar, trading at $1.2620, while it gained a more modest 0.09% against the euro to change hands at €1.1693.

“The strong session in Asia overnight thanks to hope of Chinese stimulus and strong Japanese corporate profits has given way to a drift lower for European markets,” said IG chief market analyst Chris Beauchamp.

“It looks like investors will have to wait a day for markets to properly digest last Friday’s payroll report.

“The rise in crude prices will have some investors fretting that the Fed will have to go back to hiking rates, but signs of a recovery in China’s economy will at least offer some comfort.”

Eurozone investor sentiment dips, German trade figures reveal mixed trends

It was a quiet day for economic news in the UK, while US markets remained closed for Labor Day, but fresh data from the continent showed investor sentiment in the eurozone taking a disappointing turn in September.

The Sentix index, which gauges investor confidence, fell to -21.5 in September, a decline from its August figure of -18.9 and well below market expectations, which had predicted a dip to -19.6.

Experts at Pantheon Macroeconomics labelled August’s uptick in sentiment as a mere “blip,” pointing out that Germany’s own index decreased for the fifth consecutive month.

The overall drop in eurozone investor sentiment was influenced by declines in both the expectations gauge, which fell to -21 from -17.3, and the current situation index, which slid to -22 from -20.5.

“We do not have a full country breakdown but we do know that Germany’s headline fell, to -33.1 – its lowest since October 2022 – from -30.7, on the back of a plunge in the current situation index to its lowest since July 2020,” said Pantheon’s senior Europe economist Melanie Debono.

“The press release notes that the only time the German current situations index was lower, was during the global financial crisis of 2008-2009, and that investors have little hope that the situation will change quickly ‘as expectations are also stagnating’.”

In related news, German trade figures released earlier showed mixed trends, with official statistics revealing that German exports dipped by 0.9% on a monthly basis, a downturn from an upwardly-revised increase of 0.2% in June.

Conversely, imports saw a rise of 1.4%, which contrasted sharply with a downwardly-revised drop of 3.2% the month prior.

Exports to fellow EU nations rose modestly by 0.5%, but those to non-EU countries fell by 2.5%.

That decline occurred despite gains in trade with the US and China, and could largely be attributed to a 3.5% reduction in exports to the UK.

Imports also told a varied story – while Germany’s imports from China plummeted by 5.8% and those from the UK fell 3.2%, imports from the United States saw an impressive 6.1% increase, totaling €7.9bn.

Glencore, Rio Tinto rise while CMC Markets slips

On London’s equity markets, the mining sector maintained some of its earlier gains as Glencore saw an increase of 1.85% and Rio Tinto ticked up by 0.46%.

Property developer and investor Hammerson rose 2.42% after receiving an upgrade from Morgan Stanley from ‘equal weight’ to ‘overweight.’

The financial services firm cited significant restructuring progress and current share value as reasons for the upgrade.

Energy engineering specialist John Wood Group saw a 0.26% uptick following its announcement of a $330m services agreement with North Sea oil and gas producer Harbour Energy.

Ladbrokes and Coral parent Entain was among the day’s standout gainers, surging by 2.99%.

The ascent was credited to a research note by Jefferies, which maintained a ‘buy’ rating for the company.

The bank cut its price target on the shares but said: “Despite few shorter-term trading catalysts, we argue a low valuation, scrutiny around capital allocation and ongoing MGM speculation will underpin Entain’s shares.”

Facilities management firm Mitie Group was up 0.92% after the company announced it would acquire Stevenage-based JC Engineering, a specialist in cooling systems for data centres, for £31.5m.

Mitie detailed that the acquisition price would be funded through existing loan facilities and included deferred payments of up to £10.5m over three years.

On the downside, online trading platform CMC Markets dipped by 1.3% after announcing the appointment of Albert Soleiman as the new chief financial officer, replacing the retired Euan Marshall.

Mining giant Anglo American and Asia-focused insurer Prudential had reversed their earlier gains by the close, with respective declines of 0.14% and 0.33%.

Specialty chemicals firm Johnson Matthey experienced a decline of 1.77%, following a surge on Friday after Standard Industries increased its stake in the company to over 10%.

Outside the FTSE 350, biopharmaceutical services group Ergomed saw a massive leap of 26.43%.

The surge came after the company agreed to be acquired by private equity firm Permira for around £703.1m.

Reporting by Josh White for

Market Movers

FTSE 100 (UKX) 7,452.76 -0.16%
FTSE 250 (MCX) 18,524.14 -0.07%
techMARK (TASX) 4,274.97 -0.42%

FTSE 100 – Risers

Entain (ENT) 1,186.00p 2.82%
Glencore (GLEN) 436.00p 2.07%
International Consolidated Airlines Group SA (CDI) (IAG) 161.55p 1.38%
Pearson (PSON) 851.20p 1.36%
Weir Group (WEIR) 1,864.00p 1.22%
Barclays (BARC) 150.80p 1.17%
Compass Group (CPG) 2,010.00p 0.88%
Experian (EXPN) 2,792.00p 0.87%
Ocado Group (OCDO) 878.80p 0.83%
Burberry Group (BRBY) 2,200.00p 0.82%

FTSE 100 – Fallers

Admiral Group (ADM) 2,371.00p -2.43%
Johnson Matthey (JMAT) 1,752.00p -2.15%
Endeavour Mining (EDV) 1,593.00p -1.67%
Croda International (CRDA) 5,468.00p -1.58%
Vodafone Group (VOD) 72.45p -1.56%
Land Securities Group (LAND) 582.80p -1.49%
Standard Chartered (STAN) 709.40p -1.42%
Ashtead Group (AHT) 5,468.00p -1.41%
Hiscox Limited (DI) (HSX) 995.00p -1.39%
Haleon (HLN) 315.70p -1.31%

FTSE 250 – Risers

Ferrexpo (FXPO) 83.55p 7.32%
Watches of Switzerland Group (WOSG) 611.00p 3.65%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,325.00p 3.56%
W.A.G Payment Solutions (WPS) 93.40p 3.32%
ICG Enterprise Trust (ICGT) 1,134.00p 3.28%
Trainline (TRN) 236.40p 2.69%
Vietnam Enterprise Investments (DI) (VEIL) 618.00p 2.66%
Caledonia Investments (CLDN) 3,385.00p 2.58%
Digital 9 Infrastructure NPV (DGI9) 60.50p 2.54%
TUI AG Reg Shs (DI) (TUI) 464.80p 2.51%

FTSE 250 – Fallers

Diversified Energy Company (DEC) 83.90p -4.77%
Direct Line Insurance Group (DLG) 152.05p -4.25%
IP Group (IPO) 56.60p -2.58%
Wetherspoon (J.D.) (JDW) 701.50p -2.37%
Ascential (ASCL) 201.20p -2.24%
OSB Group (OSB) 335.00p -2.05%
PZ Cussons (PZC) 157.00p -2.00%
International Distributions Services (IDS) 237.70p -1.90%
CLS Holdings (CLI) 125.20p -1.88%
Just Group (JUST) 73.70p -1.86%

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