LONDON (ShareCast) - (Sharecast News) - London stocks closed with little direction on Friday as investors weighed fresh economic data, including signs of slowing private sector growth.
The FTSE 100 index edged down 0.04% to 8,659.37 points, while the FTSE 250 rose just 0.01% to 20,613.89 points.

In currency markets, sterling was last down 0.24% on the dollar to trade at $1.2638, as it gained 0.26% against the euro, changing hands at €1.2095.

"US stock indices resumed their descents with their European peers mostly following suit ahead of Sunday's German parliamentary elections," said IG senior technical analyst Axel Rudolph.

"The underperforming Dow Jones Industrial index has been dragged down by UnitedHealth's 12% fall due to a Department of Justice investigation into its Medicare billing practices.

"On the data front, a plethora of manufacturing and services PMIs provided some volatility as Eurozone private sector growth disappoints."

Rudolph noted that gold prices had come off record highs earlier in the week on profit taking, but still managed to close higher for an eighth consecutive week.

"The oil price ended this week's four straight day winning streak by falling by over a percentage point.

"Natural gas prices are set for their third consecutive week of gains, having earlier this week hit a 25-month high amid an ongoing cold spell."

UK private sector growth slows, consumer confidence improves

In economic news, the latest purchasing managers' index (PMI) data from S&P Global showed a slight decline in UK private sector activity, as a deepening manufacturing contraction offset modest growth in services.

The composite PMI slipped to 50.5 in February from 50.6 in January, in line with forecasts.

While services activity picked up more than expected, with the PMI rising to 51.1, manufacturing saw its steepest contraction in over a year, with the sector's reading dropping to 46.4 from 48.3.

New business continued to decline, marking the sharpest drop since August 2023, while private sector employment saw its largest fall since November 2020 due to rising payroll costs and subdued demand.

"Early PMI survey data for February indicate that business activity remained largely stalled for a fourth successive month, with job losses mounting amid falling sales and rising costs," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

"The lack of growth alongside rising price pressures points to a stagflationary environment which will present a growing dilemma for the Bank of England."

Despite the weakness in business activity, UK consumer confidence improved, according to GfK's latest survey.

The consumer confidence index rose two points to -20 in February, as optimism about personal finances over the next year improved.

However, sentiment toward the broader economy remained fragile, with expectations for the country's economic outlook deteriorating further.

A measure of willingness to make major purchases rose three points, suggesting consumers were becoming more inclined to spend on big-ticket items.

"In contrast to last month when all five core measures were down, this month they are all up," said NIQ GfK consumer insights director Neil Bellamy.

"The biggest improvement is in how consumers see their personal finances for the coming year with an increase of four points that takes this measure out of negative territory to +2.

"The Bank of England interest rate cut on 6 February will have brightened the mood for some people, but the majority are still struggling with a cost-of-living crisis that is far from over."

Retail sales meanwhile provided a positive surprise, rebounding 1.7% in January following four months of declines.

The increase, significantly above the 0.3% expected by economists, was driven by strong food store sales, which saw their biggest monthly jump since March 2020.

However, non-food store sales continued to decline, reflecting ongoing consumer caution.

"The 1.7% month-on-month leap in retail sales volumes in January suggests the retail sector shot out of the blocks at the start of the year," said Paul Dales, chief UK economist at Capital Economics.

"But some of that strength will have come at the expense of weakness in other parts of the economy.

"And with households in a fairly glum mood, we doubt it will last."

Public finances also remained a focal point, with the UK government recording a £15.4bn surplus in January, the highest for that month since records began in 1993.

However, the figure fell short of the £20.5bn forecast by the Office for Budget Responsibility.

The surplus was bolstered by a record £36.2bn in self-assessed income and capital gains tax receipts, an increase of £3.8bn from the prior year.

"While January's disappointing public finances figures may not be as bad as they first appear, they continue the run of bad news for the Chancellor in 2025 and underline the difficult choices she faces," commented Alex Kerr, UK economist at Capital Economics.

"While there is increasing pressure on the government to commit to higher defence spending, the OBR is likely to conclude that the Chancellor's headroom against her fiscal rules has been wiped out and she will probably need to tighten fiscal policy as a result."

Beyond the UK, eurozone business activity stagnated, with the region's composite PMI holding steady at 50.2.

Demand weakened further, and manufacturing continued to contract despite a slight improvement in February.

In the US, consumer sentiment took a hit, with the University of Michigan's index falling to 64.7, its lowest level since November.

Inflation expectations surged, with concerns about the impact of new tariffs contributing to a sharp drop in durable goods purchasing conditions.

Standard Chartered rises on shareholder return plans, GSK in the red

On London's equity markets, Standard Chartered rose 3.77% after announcing plans to return $1.5bn to shareholders following a rise in annual earnings.

The Asia-focused bank reported a pre-tax profit of $6bn for 2024, up from $5.1bn the prior year, though slightly below analyst expectations of $6.2bn.

NatWest and Barclays also advanced, gaining 4.17% and 2.01%, respectively.

Ferrexpo surged 12.74% in a sharp rebound after tumbling in the previous session.

The mining firm had faced heavy losses on Thursday after Ukrainian authorities announced plans to nationalize its Poltava mining and processing plant, citing allegations of illegal mining and financial misconduct.

Centrica added 1.08% as its rally continued following strong earnings earlier in the week.

Citi reaffirmed its 'buy' rating on the British Gas owner and raised its price target to 187p from 174p, citing the company's improved balance sheet management and earnings stability.

Meanwhile, Aston Martin Lagonda climbed 6% ahead of its earnings report due next Wednesday.

!"There's no getting around it - Aston Martin's in a tough spot," noted Aarin Chiekrie, equity analyst at Hargreaves Lansdown.

"2024 brought with it a couple of profit warnings due to delays with its new high-end Valiant models.

"Now full-year underlying cash profits are set to land in the £270m to £280m range, a backward step from the £306m seen in the prior year."

On the downside, GSK slipped 1.83% following a Bloomberg report suggesting the pharmaceutical giant could become a target for activist investors.

The stock had lagged behind industry peers for an extended period, raising speculation about potential strategic shifts.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,659.37 -0.04%
FTSE 250 (MCX) 20,613.89 0.01%
techMARK (TASX) 4,698.48 -0.30%

FTSE 100 - Risers

Standard Chartered (STAN) 1,183.00p 3.77%
NATWEST GROUP (NWG) 451.80p 3.60%
Diageo (DGE) 2,190.00p 3.13%
Convatec Group (CTEC) 247.40p 2.57%
BT Group (BT.A) 150.60p 2.45%
Lloyds Banking Group (LLOY) 67.20p 1.97%
Croda International (CRDA) 3,206.00p 1.84%
Barclays (BARC) 303.80p 1.81%
Airtel Africa (AAF) 138.00p 1.77%
Vodafone Group (VOD) 66.20p 1.69%

FTSE 100 - Fallers

British American Tobacco (BATS) 2,965.00p -2.31%
BAE Systems (BA.) 1,255.50p -2.22%
Imperial Brands (IMB) 2,684.00p -2.08%
Mondi (MNDI) 1,239.00p -2.06%
Melrose Industries (MRO) 612.80p -2.05%
Relx plc (REL) 3,906.00p -1.96%
Shell (SHEL) 2,637.50p -1.73%
Antofagasta (ANTO) 1,820.00p -1.46%
Fresnillo (FRES) 776.50p -1.33%
GSK (GSK) 1,429.00p -1.24%

FTSE 250 - Risers

Ferrexpo (FXPO) 77.00p 11.43%
Aston Martin Lagonda Global Holdings (AML) 119.00p 4.94%
Alpha Group International (ALPH) 2,650.00p 3.92%
Lion Finance Group (BGEO) 5,330.00p 3.09%
Domino's Pizza Group (DOM) 297.80p 2.76%
Helios Towers (HTWS) 95.60p 2.58%
Bakkavor Group (BAKK) 146.50p 2.45%
Chrysalis Investments Limited NPV (CHRY) 102.40p 2.40%
Wood Group (John) (WG.) 26.40p 2.33%
C&C Group (CDI) (CCR) 150.60p 2.31%

FTSE 250 - Fallers

Oxford Nanopore Technologies (ONT) 116.80p -11.52%
Indivior (INDV) 688.50p -5.94%
Burberry Group (BRBY) 1,063.00p -3.80%
Oxford Instruments (OXIG) 1,950.00p -3.70%
Endeavour Mining (EDV) 1,740.00p -3.60%
Diversified Energy Company (DEC) 1,113.00p -3.22%
Harbour Energy (HBR) 231.50p -2.73%
North Atlantic Smaller Companies Inv Trust (NAS) 3,660.00p -2.66%
Hochschild Mining (HOC) 189.00p -2.58%
XPS Pensions Group (XPS) 389.00p -2.26%

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