London close: FTSE manages small gains on quiet Monday

Mon 30 May 2022

LONDON (SHARECAST) - (Sharecast News) - London stocks broke back into positive territory by the close on a quiet Monday, at the start of a shortened trading week.
The FTSE 100 ended the session up 0.19% at 7,600.06, and the FTSE 250 was 0.86% firmer at 20,546.89.

Sterling was in a mixed state, meanwhile, to last trade 0.15% stronger on the dollar at $1.2650, while it weakened 0.3% against the euro to €1.1734.

"The US drove the bounce last week, and with the Americans at leisure today, the FTSE has found it almost impossible to maintain the bullish atmosphere," said IG chief market analyst Chris Beauchamp.

"The limited morning gains have shrunk as the day has gone on, as investors struggle to find a reason to drive equities higher from here.

"All eyes will be on the US tomorrow to see if Wall Street can put new energy into the bounce, or whether the usual pre-nonfarm payrolls nervousness will make an early appearance."

On the economic front, the average UK house prices topped £250,000 for the time in history after rising 8.4% year-on-year in April - a slight cooling off from March's 9% clip.

Real estate platform Zoopla revealed on Monday that average UK house prices hit a record high of £250,200 over the 12 months ended 30 April, but the property market appeared to be showing signs of slowing down as potential buyers face pressure on finances amid the ongoing cost of living crisis.

Property values edged ahead by just 0.2% during April, compared with monthly gains of 0.7% at the start of the year, with Wales seeing the strongest price gains for the 15th consecutive month as property values rose 11.6%.

At the other end of the scale, London continued to lag behind other regions, posting growth of just 3.6%.

"The annual rate of price growth will ease this year, on a monthly basis, price growth has already moderated. A continuation of this trend, even with some small monthly declines, means price growth will reach 3% by the end of the year," said Zoopla's head of research Gráinne Gilmore.

"Given the number of homeowners on fixed-rate mortgages, which protect them against interest rate rises in the short to medium-term, the stress tests carried out on those loans, and the healthy employment market, we are not expecting a raft of forced sales in 2022, which is usually the trigger for price falls."

Elsewhere, retail footfall was expected to jump 8% across all UK destinations over the platinum jubilee bank holiday, according to retail consultancy Springboard.

Following a modest rise in footfall last week, Springboard expects the Jubilee and half-term holiday to boost footfall over the weekend, with high streets seeing an increase of up to 10%.

Footfall at shopping centres is expected to rise 7%, while retail parks should see an uplift of 4%.

In the run-up to the extra-long weekend, footfall rose 2.3% last week from the previous week across retail destinations, with footfall up 2.2% on high streets, 2.1% at retail parks and 2.5% at shopping centres.

The week started strongly, with a 6.5% rise in footfall on Sunday, but that fell away between Monday and Wednesday when rain hit many parts of the UK, Springboard said.

"The best performing day was Friday, buoyed by warm sunny weather," said Diane Wehrle, insights director at Springboard.

"The return of employees to the workplace appeared to accelerate last week, with noticeable increases in footfall in central London and in Springboard's Central London 'Back to the Office' benchmark, which tracks footfall in those Central London locations closest to offices, as well as in city centres outside of the capital.

"In contrast, in market towns - where a rise in footfall has become synonymous with home working - footfall remained flat from the week before, and likewise in outer London the increase in footfall was just a third of that in central London."

Across the channel, the cost-of-living in Germany jumped past forecasts last month as food price gains continued to accelerate and energy costs picked up once more.

According to a preliminary estimate from the Federal Office of Statistics, the German consumer price index was up by 0.9% month-on-month in May, pushing the annual rate of inflation from 7.4% in the month before to 7.9%.

Energy inflation reaccelerated a tad, rising from 35.3% versus a year earlier in April to 38.3%, while food prices gained 11.1%, versus an increase of 8.6% in April.

Eurozone economic sentiment was little changed in May, meanwhile, according to a survey released earlier by the European Commission.

The EC's Economic Sentiment Indicator (ESI) for the bloc ticked up to 105.0 from 104.9 in April.

That compared with an average of over 116 recorded in the second half of last year. Meanwhile, the indicator of the European Union nudged down 0.5 points in May to 104.1.

In equity markets in London, JD Sports Fashion jumped 3.79%, having tumbled a week earlier after it surprised markets with news that chair Peter Cowgill was leaving.

Countryside Partnerships rocketed 18.61% after San Francisco-based Inclusive Capital said it was looking to make a £1.47bn bid, but accused the company of refusing to engage with it.

In-Cap, which holds a 9.2% stake in Countryside, said the possible offer was to buy the remaining shares in the house builder it does not already own for 295 pence each.

"The bid is testament to the appeal of the UK housebuilding sector which, regardless of the economic backdrop, should benefit in the long term from supportive supply and demand dynamics," said Russ Mould, investment director at AJ Bell.

Elsewhere, IMI gained 3.73% after the specialist engineer said it planned to buy Germany's Bahr Modultechnik for an enterprise value of €98m (£83m).

On the downside, energy sales, marketing and support services firm DCC lost 0.11% after a downgrade to 'sector perform' from 'outperform' at RBC Capital Markets, which slashed its price target to 5,800p from 7,500p.

"We are big fans of the company and management, and believe there is scope for a re-rating over time if it can skew the business away from traditional energy," RBC said.

"However, we believe the exposure to a squeezed consumer warrants some forecast caution in the current environment."

Transport operator FirstGroup was off 0.82%, having rallied last week after saying it was evaluating a takeover offer from private equity firm I Squared, which owns Irish energy supplier Energia.

Market Movers

FTSE 100 (UKX) 7,600.06 0.19%
FTSE 250 (MCX) 20,546.89 0.86%
techMARK (TASX) 4,450.33 0.11%

FTSE 100 - Risers

Melrose Industries (MRO) 135.85p 5.16%
JD Sports Fashion (JD.) 124.50p 3.79%
Ocado Group (OCDO) 935.20p 3.75%
RS Group (RS1) 966.50p 3.65%
International Consolidated Airlines Group SA (CDI) (IAG) 135.04p 3.49%
Antofagasta (ANTO) 1,518.50p 3.30%
Scottish Mortgage Inv Trust (SMT) 818.80p 3.02%
Ashtead Group (AHT) 4,237.00p 2.84%
Royal Mail (RMG) 328.90p 2.46%
Auto Trader Group (AUTO) 590.80p 2.43%

FTSE 100 - Fallers

Airtel Africa (AAF) 151.80p -5.07%
British American Tobacco (BATS) 3,456.00p -2.66%
Imperial Brands (IMB) 1,769.50p -1.53%
Aviva (AV.) 434.70p -1.41%
AstraZeneca (AZN) 10,468.00p -1.06%
Harbour Energy (HBR) 378.90p -0.84%
HSBC Holdings (HSBA) 528.60p -0.71%
BAE Systems (BA.) 761.60p -0.68%
Vodafone Group (VOD) 129.32p -0.63%
Admiral Group (ADM) 2,229.00p -0.40%

FTSE 250 - Risers

Countryside Partnerships (CSP) 283.00p 18.61%
Aston Martin Lagonda Global Holdings (AML) 737.60p 7.96%
Dr. Martens (DOCS) 222.80p 6.50%
Baltic Classifieds Group (BCG) 144.20p 6.38%
Baillie Gifford US Growth Trust (USA) 175.80p 5.52%
AJ Bell (AJB) 284.60p 5.02%
TUI AG Reg Shs (DI) (TUI) 197.05p 4.87%
Chrysalis Investments Limited NPV (CHRY) 136.00p 4.45%
Renishaw (RSW) 4,086.00p 4.18%
IMI (IMI) 1,417.00p 3.73%

FTSE 250 - Fallers

Helios Towers (HTWS) 113.90p -2.65%
UK Commercial Property Reit Limited (UKCM) 86.40p -2.15%
QinetiQ Group (QQ.) 361.60p -2.11%
Ninety One (N91) 229.80p -2.05%
Wood Group (John) (WG.) 245.30p -2.00%
Petrofac Ltd. (PFC) 144.90p -1.96%
NB Private Equity Partners Ltd. (NBPE) 1,500.00p -1.94%
Hiscox Limited (DI) (HSX) 938.40p -1.84%
Playtech (PTEC) 552.50p -1.69%
FDM Group (Holdings) (FDM) 960.00p -1.64%
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