London close: Stocks start new week in muted mood
By Josh White
Date: Monday 18 Oct 2021
(Sharecast News) - London stocks closed in negative territory on Monday, after a session which began with disappointing growth figures out of China, with little else to improve the mood through the afternoon.
The FTSE 100 ended the session down 0.42% at 7,203.83, and the FTSE 250 was 0.07% weaker at 22,968.74.
Sterling was in the red against its major trading pairs as well, and was last 0.23% weaker on the dollar at $1.3720, while losing 0.33% on the euro to change hands at €1.1824.
"It should come as no surprise that today has seen equity markets take a bit of a breather after their sudden leap forward last week," said IG chief market analyst Chris Beauchamp.
"Within the space of a few sessions the atmosphere had turned from bearish to firmly bullish.
"Today's hesitation doesn't change that fact, and with so little news on the calendar today some indecision was to be expected."
Beauchamp said the "wall of earnings" over the next fortnight would be key as to the market's next move, adding that a continuation of the positive commentary should help keep the rally well-supported.
"Judging by the figures so far it seems like earnings season will be the catalyst for further gains that eluded investors throughout September and early October.
"The FTSE 100 continues to show some hesitation around the 7,220 zone, but the 400-point rally from the September low does suggest that traders are happy to buy the dip even in this underperforming index."
China's economic growth was the story of the day, with official data showing it slowing sharply in the third quarter amid power shortages and supply chain issues.
The National Bureau of Statistics reported that GDP growth slowed to 4.9% in the three months ended 30 September, from 7.9% in the previous quarter, marking the weakest growth in a year.
It was below economists' expectations for a 5.0% increase.
Growth also slowed sharply in seasonally-adjusted quarter-on-quarter terms, from 1.2% in the second quarter to 0.2% in the third.
Pantheon Macroeconomics economist Craig Botham said a year-on-year slowdown was always on the cards given base effects, but the slowdown on the quarter reflected more recent headwinds.
"An obvious candidate for such a headwind is the energy crisis that emerged in September, and sure enough, delving into the subcomponents, there was a particularly sharp slowdown in secondary sector GDP growth, from 7.5% year-on-year to 3.6%," he said.
"Meanwhile, tertiary sector GDP growth also saw a considerable slowdown, to 5.4% year-on-year from 8.3%."
Botham said a larger part of this decline could be attributed to base effects, but added that it also showed the chill extending across the property sector.
"We will need to wait for a more detailed industry breakdown to confirm the drivers, but the monthly data does seem to support this interpretation."
On home shores, UK house prices jumped in October, with the Rightmove house price index showing residential prices rose 1.8%, or £5,983, making for the biggest rise at this time of year since 2015.
The average asking price was now £344,445, up 6.5% annually.
"Competition for property for sale remains hot this autumn," said Tim Bannister, director of property data at Rightmove.
"Although more properties are coming to market, the level is still not enough to replenish the stock that's being snapped up.
"Consequently, new price records have been set across the board."
Retail footfall, meanwhile, dipped across the UK last week, with retail analyst Springboard reporting a 0.7% decline from the week before.
The number of consumers heading for the shops was flat on high streets, but declined by 1.5% at retail parks and by 1.6% in shopping centres.
Footfall rose 2.7% in central London and 2.1% in regional cities, as the return to the office continued to accelerate.
"Last week UK footfall was flat in high streets, but small declines in activity in both retail parks and shopping centres suggests that discussions in the media around the impact of supply issues on the availability of Christmas products have not yet impacted consumer behaviour," said Diane Wehrle, insights director at Springboard.
"In parallel, indications are that the trickle back to the office is accelerating, with footfall in both outer London and market towns - locations where resilient activity levels are synonymous with home working - declining from the week before, whilst rising in Central London and regional cities outside the capital."
On the equity front, travel-related shares were under the cosh following gains at the end of last week, with British Airways parent IAG down 3.94%, Wizz Air descending 2.98%, and easyJet 2.67% lower.
UK bus and train operator National Express slumped 3.81% after it said it had been given until 16 November to make a bid for rival Stagecoach.
On the upside, gambling software group Playtech surged 58.08% after agreeing to be bought by Australian gaming machine maker Aristocrat Leisure in a £2.1bn deal.
Shares in gambling peers Rank and 888 Holdings also gained on the news, by 1.61% and 4.52%, respectively.
Drinks manufacturer C&C Group fizzed 2.41% higher after an upgrade to 'overweight' at Barclays, while Drax powered ahead 1.5% after an upgrade to 'buy' from 'hold' at Jefferies.
National Grid managed gains of 0.97% after reporting that it had continued to perform in line with expectations, ahead of its first-half results on 18 November.
Tesco was also in the black by 0.7% after the supermarket chain said it had started its planned buyback of up to £500m in shares.
It had announced the move with its interim results on 6 October, saying improved profits had given it room to start a multi-year repurchase to return cash to shareholders.
Market Movers
FTSE 100 (UKX) 7,203.83 -0.42%
FTSE 250 (MCX) 22,968.74 -0.07%
techMARK (TASX) 4,540.39 -0.89%
FTSE 100 - Risers
Hargreaves Lansdown (HL.) 1,510.00p 2.55%
Fresnillo (FRES) 863.00p 2.06%
Evraz (EVR) 632.80p 1.98%
Pershing Square Holdings Ltd NPV (PSH) 2,880.00p 1.59%
Entain (ENT) 2,124.00p 1.29%
Polymetal International (POLY) 1,343.50p 1.02%
National Grid (NG.) 905.90p 0.97%
Reckitt Benckiser Group (RKT) 5,500.00p 0.95%
Barclays (BARC) 199.62p 0.83%
Experian (EXPN) 3,239.00p 0.81%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 175.72p -3.94%
Informa (INF) 533.00p -2.99%
Anglo American (AAL) 2,826.00p -2.95%
Antofagasta (ANTO) 1,476.50p -2.49%
Whitbread (WTB) 3,287.00p -2.43%
BT Group (BT.A) 137.85p -2.24%
Smurfit Kappa Group (CDI) (SKG) 3,675.00p -2.23%
Compass Group (CPG) 1,457.50p -2.21%
Land Securities Group (LAND) 696.40p -2.14%
Burberry Group (BRBY) 1,836.50p -1.92%
FTSE 250 - Risers
Playtech (PTEC) 678.50p 58.08%
Diversified Energy Company (DEC) 113.60p 4.66%
888 Holdings (888) 416.00p 4.52%
Network International Holdings (NETW) 339.60p 3.41%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 494.50p 3.02%
C&C Group (CDI) (CCR) 255.20p 2.41%
Spire Healthcare Group (SPI) 235.00p 2.17%
Petropavlovsk (POG) 24.52p 2.17%
LXI Reit (LXI) 147.40p 1.93%
Mitie Group (MTO) 67.00p 1.84%
FTSE 250 - Fallers
Carnival (CCL) 1,535.20p -4.69%
Aston Martin Lagonda Global Holdings (AML) 1,733.00p -4.68%
National Express Group (NEX) 227.20p -3.81%
Greencore Group (CDI) (GNC) 130.30p -3.62%
FirstGroup (FGP) 89.50p -3.35%
Restaurant Group (RTN) 86.90p -3.34%
Vesuvius (VSVS) 449.60p -3.10%
Hays (HAS) 161.70p -3.06%
Wizz Air Holdings (WIZZ) 4,519.00p -2.98%
Shaftesbury (SHB) 597.50p -2.85%
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