|CATEGORY: MARKET REPORT - CLOSE
Mon 20 Jun 2022
LONDON (SHARECAST) - (Sharecast News) - London stocks closed in positive territory on Monday, with deal news helping to lift investors' spirits, although sentiment remained fragile amid ongoing concerns about a global recession.
The FTSE 100 ended the session up 1.5% at 7,121.81, and the FTSE 250 was ahead 0.45% at 19,010.82.
Sterling was in a mixed state, meanwhile, to last trade up 0.07% on the dollar at $1.2250, while it weakened 0.15% against the euro to change hands at €1.1626.
"Heavyweight US markets are out of the picture for the day, which at least removes the risk of any fresh selling in tech stocks for a few hours," said IG chief market analyst Chris Beauchamp.
"As a result, European markets have attempted to rebound after last week's central bank-induced volatility."
Beauchamp said Friday's options expiry, and the lack of big central bank decisions, might help equity bulls "wrench back control" this week, even if just for a short time.
"Breadth readings suggest stocks might have at least some room to bounce, and traders might seize on any hints from [Fed chair Jerome] Powell about cautiousness on rate hikes, however vague those hints might be, to start one of those famed 'bear market rallies' that we keep hearing about."
In economic news, footfall across all UK retail destinations jumped last week according to fresh industry data, boosted by the weather.
According to retail consultancy Springboard, overall footfall benefited from the sunny weather in the week starting 12 June, rising by 4.1% last week on the previous seven days.
The largest increase - 5% - was seen on high streets, while in retail parks, footfall rose 2.5% and by 3.7% at shopping centres.
Retail parks and shopping centres benefited the most when the warm weather was replaced by rain at the end of the week, however.
Footfall on high streets fell 7.6% on Saturday and rose 5.2% in retail parks and by 3% in shopping centres.
"The very hot weather was a dominant feature last week, making high streets the choice for consumers until Friday," said Diane Wehrle, insights director at Springboard.
"Inevitably, once the rain hit on Saturday it was the enclosed environments of shopping centres that became more appealing.
"All types of town centre benefited from an uplift in footfall but unsurprisingly coast towns were particularly appealing to consumers."
Elsewhere, the price of houses coming to market in the UK hit a fifth consecutive record, although slowing growth saw the speed of the rise moderate significantly from previous months.
According to property marketing platform Rightmove, the average price of property coming to market hit another new record for a fifth consecutive month, rising by 0.3% - or £1,113 - to £368,614.
That was the smallest increase since January, as the pace of price rises started to slow.
"The exceptional pace of the market is easing a little, as demand gradually softens and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years," said Rightmove director of property science Tim Bannister.
"When we look at the number of buyers contacting estate agents compared to 2019 or the pre-pandemic five-year average, demand is still very high compared to what was once considered normal.
"We're hearing from agents that though they might have had slightly fewer enquirers for each property in recent months, they're still seeing significant interest from multiple buyers and are achieving successful sales."
Across the channel, official data showed the eurozone's construction sector faltering in April, with initial estimates published by Eurostat showing seasonally-adjusted production in the construction sector falling by 1.1%, down on March's marginal 0.1% rise.
March's figure was revised upwards from 0.0%, while across the wider EU, production fell by 1.2% in April and rose by 0.1% in March.
"The carryover, if the level of construction activity remains at April's level throughout the second quarter, implies that construction will be a drag on GDP growth this quarter," said Melanie Debono, senior Europe economist at Pantheon Macroeconomics.
"It implies that activity will fall by 0.7% quarter on quarter, after rising 3.7% over the first quarter as a whole.
"We think it will probably fare slightly worse, perhaps falling by 1% to 1.5%."
In Germany, producer prices continued to soar last month according to official data, driven by the growing cost of energy.
According to Destatis, producer prices surged 33.6% in May year-on-year, the fastest increase since the series began in 1949, or by 1.6% on the previous month.
Destatis said increased energy prices were "mainly responsible" for the jump.
Finally, the People's Bank of China kept its main lending rates unchanged, in line with expectations.
The central bank left the key one-year loan prime rate (LPR) at 3.70%, and the five-year LPR at 4.45%. Consensus had been for no change for either rate.
Most new loans are based on the benchmark one-year LPR, while the five-year rate underpins mortgage lending.
On London's equity markets, Euromoney Institutional Investor surged 26.14% after it confirmed it was in talks with a consortium of private equity firms Astorg Asset Management and Epiris about a possible £1.6bn cash takeover.
Responding to media speculation over the weekend, Euromoney said they were in discussions about a possible offer at £14.61 per share.
That followed earlier approaches from the consortium at £11.75, £12.50, £13.10 and £13.50 per share.
Associated British Foods rallied 2.39% after a well-received trading update, as it said Primark sales in the third quarter were 4% higher than the comparable pre-Covid period three years ago.
Low-cost airline easyJet reversed earlier losses to close up 1.53%, even after it said it was "consolidating" flights this summer and facing higher-than-expected costs as a result of staff shortages across the industry.
The company said it expected fourth-quarter capacity to be around 90% of pre-Covid pandemic levels.
Sector peers were also faring well, with British Airways and Iberia owner IAG rising 7.24% by the close.
"Capacity problems affecting airlines show little sign of easing any time soon, with fresh cancellations due to baggage handling faults now appearing on screens at Heathrow," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
"As the update from easyJet shows, the headwinds now constraining summer operations will be another delay to long awaited recovery for the industry."
On the downside, housebuilders slumped after the survey from Rightmove, with Barratt Developments down 3.71%, Berkeley Group off 4.14%, Persimmon falling 4.46%, and Taylor Wimpey 3.23% weaker.
Construction materials supplier Travis Perkins was also down on the news, settling 3.06% lower by the end of the day.
Rank Group tumbled 16.94% after it warned on full-year profits, citing the recent performance in Grosvenor venues and continued inflationary cost pressures across the group.
For the year ending 30 June, it now expected like-for-like underlying operating profit of around £40m, down from previous guidance of between £47m and £55m.
Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk, Frank Prenesti and Abigail Townsend.
FTSE 100 (UKX) 7,121.81 1.50%
FTSE 250 (MCX) 19,010.82 0.45%
techMARK (TASX) 4,234.04 0.59%
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 120.58p 7.24%
HSBC Holdings (HSBA) 537.50p 5.66%
Ocado Group (OCDO) 872.60p 5.01%
Melrose Industries (MRO) 152.35p 4.64%
BT Group (BT.A) 188.45p 4.58%
Rolls-Royce Holdings (RR.) 91.50p 4.32%
Centrica (CNA) 80.64p 4.13%
Standard Chartered (STAN) 604.00p 3.57%
Lloyds Banking Group (LLOY) 43.74p 3.51%
Shell (SHEL) 2,110.50p 3.25%
FTSE 100 - Fallers
Intermediate Capital Group (ICP) 1,342.50p -4.75%
Persimmon (PSN) 1,851.00p -4.46%
Berkeley Group Holdings (The) (BKG) 3,730.00p -4.14%
Barratt Developments (BDEV) 454.40p -3.71%
Howden Joinery Group (HWDN) 586.80p -3.39%
Taylor Wimpey (TW.) 116.95p -3.23%
Ashtead Group (AHT) 3,404.00p -3.10%
CRH (CDI) (CRH) 2,832.50p -2.51%
Severn Trent (SVT) 2,794.00p -2.21%
Fresnillo (FRES) 786.20p -1.95%
FTSE 250 - Risers
Euromoney Institutional Investor (ERM) 1,382.00p 26.33%
TUI AG Reg Shs (DI) (TUI) 165.45p 8.35%
Carnival (CCL) 727.60p 7.82%
Drax Group (DRX) 646.00p 7.31%
ITV (ITV) 69.72p 6.61%
Wizz Air Holdings (WIZZ) 2,124.00p 6.49%
Moonpig Group (MOON) 221.60p 5.52%
Currys (CURY) 77.95p 4.56%
Trainline (TRN) 309.70p 4.56%
Petrofac Ltd. (PFC) 131.10p 4.05%
FTSE 250 - Fallers
XP Power Ltd. (DI) (XPP) 2,930.00p -7.28%
Genuit Group (GEN) 388.50p -5.24%
Pennon Group (PNN) 1,007.00p -5.18%
Grafton Group Ut (CDI) (GFTU) 775.50p -5.11%
Tyman (TYMN) 247.00p -4.63%
Marshalls (MSLH) 450.80p -4.41%
Spirent Communications (SPT) 231.60p -3.98%
Volution Group (FAN) 340.00p -3.68%
Mediclinic International (MDC) 442.20p -3.32%
Polymetal International (POLY) 205.00p -3.30%