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London close: Earlier gains wiped out as nerves set in

By Benjamin Chiou

Date: Friday 22 Sep 2023

London close: Earlier gains wiped out as nerves set in

(Sharecast News) - London's FTSE 100 had come off earlier highs to settle flat by Friday's close, in an underwhelming finish to a busy week full of interest-rate decisions and cautious comments from policymakers.
Six of the G10's central banks gave monetary policy updates this week, but it was the Federal Reserve and Bank of England that were grabbing the headlines. Both left interest rates unchanged, but policymakers argued that rates are likely to stay elevated for some time yet, and even another rate hike might be possible depending on incoming economic data.

After rising as much as 0.8% at lunchtime, the FTSE 100 finished just a handful of points higher (+0.07%) at 7,683.91.

Meanwhile, indices across Europe stayed firmly in the red all session as investors digested a barrage of mixed economic data.

"Following a week which saw investors shed stocks at the fastest weekly rate in 2023 while US yields rallied to more than decade highs, stock indices stabilised near key technical support on short-covering into the weekend," said Axel Rudolph, market analyst at IG.

"Next week's Eurozone and US consumer confidence, business climate and unemployment data could trigger further sell-offs in global stock markets, though."

PMIs paint mixed outlook

Purchasing managers' indices (PMIs) across the Eurozone, UK and US were out on Friday.

The flash HCOB Eurozone composite PMI output index came in at 47.1 in September, up from 46.7 in August but still remained below the 50 mark which separates growth from contraction as the downturn in the manufacturing sector accelerated.

The S&P Global/CIPS UK composite PMI fell to 46.8 in September, down from 48.6 in August as the service-sector contraction worsened.

Meanwhile, the S&P Global/CIPS US composite PMI eased to 50.1 in September, just a hair below the 50.2 print the month before with the services PMI missing expectations.

Other data revealed that UK retail sales rebounded in August from the rain affected prior month, rising 0.4% on the back of strong food and clothing purchases by consumers. This was an improvement from the 1.1% decline in July but slightly below the 0.5% increase expected by analysts.

Meanwhile, the GfK US Consumer Confidence index increased four points to -21, the highest reading since January 2022.

Ocado, financials and miners gain

Ocado was up 7% in afternoon trade as the grocery delivery group attempted to claw its way back after plummeting 20% yesterday following a broker downgrade by Exane Paribas to 'underperform', despite a solid third-quarter trading update earlier in the week. Prior to this week, the stock had more than doubled since June.

Mining stocks were performing well as risk appetite returned somewhat with metals prices rebounding after heavy falls the previous session. Anglo American and Glencore were on the rise.

Banking peers Lloyds and HSBC were also putting in a decent performance. Lloyds was being helped by comments from analysts at Barclays, who named the lender as one of its top European banking picks, saying the valuation is "simply too cheap" compared to continental peers. Deutsche Bank also called Lloyds its preferred UK banking play.

JD Sports Fashion was extending gains after impressing the market with its interim results yesterday, with pre-tax profits jumping by 26%. Bank of America analysts said the company keeping full-year guidance unchanged was "encouraging amidst a backdrop of disappointing results from US peers in recent weeks".

AstraZeneca was higher after announcing positive results from the TROPION-Breast01 phase three trial.

On the downside was Halma, which dropped 4% as it continued to fall following an underwhelming first-half trading update yesterday. Analysts at Hargreaves Lansdown said there were supportive of Halma's business model and growth drivers. But its valuation is still ahead of the wider sector, adding: "There's plenty of pressure to deliver."

Phoenix Group was under pressure after JP Morgan cut its rating on the insurer from 'neutral' to 'underweight', and reduced its target price from 655p to 500p.

FTSE 100 - Risers

Ocado Group (OCDO) 691.20p 6.70%
Rightmove (RMV) 567.60p 2.38%
Lloyds Banking Group (LLOY) 45.45p 2.32%
Hargreaves Lansdown (HL.) 826.20p 1.80%
AstraZeneca (AZN) 11,046.00p 1.47%
JD Sports Fashion (JD.) 147.00p 1.45%
Croda International (CRDA) 4,935.00p 1.11%
HSBC Holdings (HSBA) 643.10p 1.10%
BP (BP.) 525.70p 1.02%
F&C Investment Trust (FCIT) 894.00p 1.02%

FTSE 100 - Fallers

Halma (HLMA) 1,949.00p -3.75%
Entain (ENT) 1,056.00p -3.03%
Centrica (CNA) 167.65p -2.78%
B&M European Value Retail S.A. (DI) (BME) 573.40p -1.92%
BAE Systems (BA.) 1,011.00p -1.80%
Ashtead Group (AHT) 5,096.00p -1.70%
Phoenix Group Holdings (PHNX) 527.40p -1.60%
SSE (SSE) 1,674.00p -1.44%
Compass Group (CPG) 2,017.00p -1.42%
Smurfit Kappa Group (CDI) (SKG) 2,720.00p -1.38%

FTSE 250 - Risers

Ascential (ASCL) 201.80p 6.04%
Trainline (TRN) 271.40p 4.14%
TP Icap Group (TCAP) 173.00p 4.03%
Rathbones Group (RAT) 1,806.00p 3.20%
BlackRock World Mining Trust (BRWM) 601.00p 2.91%
Investec (INVP) 484.80p 2.71%
Mobico Group (MCG) 87.75p 2.57%
NCC Group (NCC) 105.60p 2.52%
Abrdn Private Equity Opportunities Trust (APEO) 449.00p 2.39%
Coats Group (COA) 81.30p 2.39%

FTSE 250 - Fallers

PureTech Health (PRTC) 209.50p -5.42%
SSP Group (SSPG) 215.00p -4.44%
Ceres Power Holdings (CWR) 334.20p -3.91%
Hilton Food Group (HFG) 762.00p -3.67%
Petershill Partners (PHLL) 155.00p -3.61%
Drax Group (DRX) 472.30p -3.51%
IP Group (IPO) 58.50p -3.31%
Digital 9 Infrastructure NPV (DGI9) 55.30p -2.98%
Renishaw (RSW) 3,562.00p -2.41%
Close Brothers Group (CBG) 849.00p -2.30%


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