LONDON (ShareCast) - (Sharecast News) - London's stock markets experienced a mixed day of trading on Wednesday after a robust performance from the retail sector, led by gains from Marks and Spencer.

However, those gains were offset by declines in the financial and mining sectors.

The FTSE 100 closed with a marginal decline of 0.11% at 7,401.72 points, while the FTSE 250 index managed gains of 0.48%, finishing at 17,846.26.

In currency markets, sterling was last down 0.04% on the dollar, trading at $1.2295, while it declined 0.15% against the euro to change hands at €1.1478.

"After a slow start to the week, things have picked up for stocks," said IG chief market analyst Chris Beauchamp.

"European markets have made solid gains while on Wall Street, things are more muted.

"But overall the outlook in the short-term continues to look good for stock markets."

Beauchamp noted that oil was down sharply from its highs while inflation expectations had come down too.

"Investors no longer seem to fear that more rate hikes are on their way, though they do seem to be getting a little ahead of themselves in anticipating multiple rate cuts in 2024."

Retail sales fall further in the eurozone, US mortgage applications rise

In economic news, eurozone retail sales experienced a third consecutive monthly decline in September, according to data from Eurostat.

The data showed a 0.3% decrease, slightly worse than the 0.2% expected by analysts.

However, there was a silver lining as August's figures were revised upward to -0.7% from the initial estimate of -1.2%.

In September, gains were observed in food, drinks, and tobacco sales at 1.4%, offset by notable drops in non-food products at 1.9% and automotive fuel at 0.9%.

According to Melanie Debono, senior Europe economist at Pantheon Macroeconomics, non-food sales, excluding fuel, account for around 52% of total trade.

Compared with September 2022, sales were 2.9% lower, worse than the revised 1.8% annual decline in August but better than the 3.2% drop expected.

"Looking ahead to the fourth quarter, the squeeze on real incomes should end, as inflation continues to slide and wage growth remains elevated," Debono said.

"But survey measures of demand suggest consumers are in little mood to spend and consumer confidence remains subdued."

In Germany, inflation reached its lowest point in over two years in the previous month, according to final figures from Destatis.

The annual consumer price increase eased to 3.8% in October, matching the initial estimate and marking the lowest rate since August 2021.

That slowdown, from the previous month's 4.5%, was in line with economists' expectations and was primarily attributed to declining energy prices and a deceleration in food inflation.

Meanwhile, mortgage applications in the United States surged in the past week, driven by lower borrowing fees and concerns over a softening labour market.

The Mortgage Bankers Association's (MBA) weekly mortgage applications survey showed a 2.5% increase for the week ended 3 November, following a 2.1% decrease in the prior week.

Refinancing applications saw a 2% rise, while purchasing applications jumped by 3%.

Both measures were, however, still down 7% and 20% compared to the same period last year, respectively.

"The 30-year fixed mortgage rate dropped by 25 basis points to 7.61%, the largest single-week decline since July 2022," said Joel Kan, MBA vice president and deputy chief economist.

"Last week's decrease in rates was driven by the US Treasury's issuance update, the Fed striking a dovish tone in the November FOMC statement, and data indicating a slower job market."

Nevertheless, Kan pointed out that purchase levels were still substantially lower than last year, as "many homebuyers remain on the sidelines until more for-sale inventory becomes available".

M&S leads retailers higher, mining and financial plays slide

On London's equity markets, Marks and Spencer Group soared 8.88% after reinstating its dividend and reporting a 56.2% surge in first-half profits.

The retailer posted pre-tax profits of £325.6m for the six months ended 30 September - a substantial increase from the £208m reported a year ago.

That stellar performance was underpinned by a 10.8% rise in revenue, reaching £6.1bn, driven by a remarkable 14.7% increase in food sales, up 11% on a like-for-like basis.

"Marks and Spencer's first-half results are so good that management's biggest challenge now may be to stop analysts getting over-excited and prevent them from upgrading their numbers too much and setting too high a bar of expectations," said AJ Bell investment director Russ Mould

Sector peers also experienced gains, with Next posting a modest increase of 0.49%, B&M European Value Retail rising by 0.86%, and Associated British Foods climbing by 2.36%.

Pub operator JD Wetherspoon joined the positive trend, with shares rising by 0.3% after reporting a robust 9.5% growth in like-for-like sales in the first quarter, driven by increased bar, food, and fruit machine sales.

On the downside, a number of financial and mining stocks saw declines as risk appetite waned.

Hargreaves Lansdown, Prudential, Legal & General Group, Fresnillo, and Endeavour Mining closed lower.

Anglo American also faced a downturn after reporting a substantial drop in diamond sales at its latest De Beers tender and citing ongoing macroeconomic challenges.

De Beers' sales in its ninth cycle of the year plummeted to just $80m, down from $200m in the previous tender and $454m in the same period last year.

ITV disappointed investors with a meagre 1% improvement in total revenue for the first nine months of the year, amounting to £2.98bn.

That led to a 5.7% slide in shares for the broadcaster.

ITV attributed its sluggish performance to the decline in linear advertising revenue, partially offset by revenue growth from ITV Studios and M&E digital revenues as the company continued to diversify its business.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,401.72 -0.11%
FTSE 250 (MCX) 17,846.26 0.48%
techMARK (TASX) 4,086.94 -0.15%

FTSE 100 - Risers

Marks & Spencer Group (MKS) 244.10p 8.39%
Rolls-Royce Holdings (RR.) 232.40p 2.83%
Associated British Foods (ABF) 2,307.00p 2.53%
3i Group (III) 2,041.00p 2.41%
Unite Group (UTG) 939.50p 2.22%
International Consolidated Airlines Group SA (CDI) (IAG) 152.75p 2.07%
Entain (ENT) 958.00p 1.81%
CRH (CDI) (CRH) 4,767.00p 1.69%
IMI (IMI) 1,515.00p 1.61%
Weir Group (WEIR) 1,771.50p 1.55%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 710.80p -2.34%
National Grid (NG.) 968.20p -2.06%
Anglo American (AAL) 2,095.50p -2.06%
SSE (SSE) 1,627.50p -2.05%
BT Group (BT.A) 121.55p -2.02%
Ocado Group (OCDO) 539.20p -2.00%
Fresnillo (FRES) 541.80p -1.63%
Vodafone Group (VOD) 77.02p -1.47%
Sainsbury (J) (SBRY) 267.70p -1.40%
Centrica (CNA) 148.80p -1.36%

FTSE 250 - Risers

Hilton Food Group (HFG) 706.00p 4.75%
Caledonia Investments (CLDN) 3,345.00p 4.69%
Investec (INVP) 497.10p 3.95%
Tate & Lyle (TATE) 652.50p 3.64%
Octopus Renewables Infrastructure Trust (ORIT) 92.90p 3.22%
Carnival (CCL) 926.00p 3.19%
Vietnam Enterprise Investments (DI) (VEIL) 556.00p 3.15%
Just Group (JUST) 78.50p 3.15%
Digital 9 Infrastructure NPV (DGI9) 50.00p 2.89%
PureTech Health (PRTC) 164.20p 2.88%

FTSE 250 - Fallers

ITV (ITV) 61.82p -5.98%
Ceres Power Holdings (CWR) 204.60p -4.03%
Watches of Switzerland Group (WOSG) 571.50p -2.64%
Drax Group (DRX) 424.10p -2.51%
Harbour Energy (HBR) 222.30p -2.50%
Pennon Group (PNN) 723.50p -2.49%
Ithaca Energy (ITH) 156.60p -2.37%
CLS Holdings (CLI) 92.80p -2.21%
Diversified Energy Company (DEC) 67.10p -2.04%
Energean (ENOG) 851.00p -1.85%

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