LONDON (ShareCast) - (Sharecast News) - London markets experienced a downturn in trading on Thursday, with stocks relinquishing earlier gains as investors processed a decrease in jobless claims in the United States.

AstraZeneca shares also dropped following the release of its results.

The FTSE 100 closed down 0.44% at 7,595.48 points, while the FTSE 250 saw a more marginal decrease of 0.01% to reach 19,102.72 points.

In currency markets, sterling was last down 0.05% on the dollar to trade at $1.2620, while it weakened 0.09% against the euro to change hands at €1.1711.

"A big drop for AstraZeneca has wiped 40 points off the FTSE 100 today, with the result that the index has been left behind as other European markets make headway today," said IG chief market analyst Chris Beauchamp.

"Astra's poor performance since the summer has been a key driver for the FTSE 100's inability to keep up with its peers, and today's numbers suggest that weight will continue for the time being."

Beauchamp added that the S&P 500 failed to hit 5,000 by "the slimmest of margins" on Wednesday, but said it was only a matter of time.

"While it might seem outlandish, a Dow 40,000 might not be too far behind, especially if the market continues in its present frame of mind.

"Crucially, indices have remained solid despite the latest strong US data and the diminishing chance of a March cut, showing that there is more to this rally than just hopes of a looser policy environment."

US jobless claims fall more than expected

In economic news, fresh data from the Labor Department showed Americans filed for unemployment benefits at a slower pace for the week ended 2 February.

Initial jobless claims decreased by 9,000 to 218,000, slightly below the anticipated 220,000 mark.

The figure, while indicative of a slowing trend, still suggested a resilient labour market.

Continuing claims also saw a decline, dropping by 23,000 to 1.87 million in the last week of January.

However, the four-week moving average increased by 3,750 to 212,250.

Non-seasonally adjusted claims experienced a notable decrease of 31,192 to 232,727, with some states such as Oregon, Ohio, and California reporting declines, while Missouri and Texas noted increases.

On home shores, the UK housing market showed signs of stabilisation in January, according to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors.

Buyer demand, agreed sales, and new instructions all strengthened last month, buoyed by hopes of a potential interest rate cut.

New buyer enquiries saw a notable increase, reaching a balance of 7, the highest since February 2022.

Agreed sales also entered positive territory, rising to 5 from -5.

Respondents expressed optimism for future conditions, with expectations of further improvement in sales over the next three and 12 months.

Although house prices remained in negative territory at -18, it marked a significant improvement from December's figure of -30, indicating a more optimistic outlook amidst economic uncertainties.

"The UK housing market has seen a continued improvement in buyer activity through the early part of the year, supported by the recent easing in mortgage rates," said Tarrant Parsons, senior economist at RICS.

"Although sales volumes through much of the year ahead are likely to remain relatively subdued compared to the longer-term average, the outlook has now turned modestly brighter on a consistent basis over the past few survey reports.

"However, this is not to say that mortgage affordability isn't still a significant challenge, and any further unwelcome surprises with regards to inflation may still cause interest rates expectations to be revised."

However, amid the positive indicators there were concerns around the UK mortgage market, as the number of mortgages in arrears increased 7% in the fourth quarter of 2023, with homeowner mortgages seeing a rise from the prior quarter and year.

Buy-to-let mortgages also experienced an 18% increase from the previous quarter and a substantial 124% rise from the previous year.

The number of homes repossessed decreased, with just 540 homeowner mortgages and 500 buy-to-let properties being possessed in the period.

Finally on data, China continued to grapple with deepening deflation, marking its fastest pace in 15 years.

The consumer price index fell by 0.8% year-on-year in January, surpassing expectations and marking the fourth consecutive month of decline.

Food prices, particularly pork, contributed significantly to this contraction, with a 17% decrease in pork prices driving overall food price decline.

AstraZeneca slides, British American Tobacco climbs on results

On London's equity markets, pharmaceutical giant AstraZeneca slid 6.36% after announcing a 6% increase in sales for 2023, offset by a $3.7bn drop in Covid-19 medicine revenue.

While AstraZeneca projected robust growth for the year ahead, profits fell slightly short of analysts' expectations.

Digital 9 Infrastructure tumbled 21.98% after Icelandic authorities initiated an investigation into its proposed sale of Verne Global, while SSE was off 4.69% after a third-quarter trading statement.

Watches of Switzerland Group also saw a downturn of 2.46%, despite maintaining its full-year guidance, as third-quarter revenues dipped due to shifting consumer preferences.

On the upside, DS Smith rocketed 11.82% after confirming interest from rival Mondi.

Packaging sector peer Smurfit Kappa Group also experienced strong gains.

British American Tobacco climbed 7.12%, despite reporting a full-year loss attributed to an impairment charge.

Investors were encouraged by the company's successful performance in new categories, driving revenue growth.

"Usually, a company announcing losses running into the tens of billions of pounds wouldn't be cause for celebration among investors," said Russ Mould, investment director at AJ Bell.

"However, British American Tobacco has done just that this morning and been rewarded with share price gains.

"The impairments which have tipped British American Tobacco into a mega loss are non-cash items, relating to a write-down of the value of its acquisition of the part of Reynolds American it did not already own in 2017."

Mould said that while the size of the write-down had grown slightly, it was previously flagged in December.

"There was also a nugget of good news in today's results for the market to latch on to - the company has hit profitability with its 'new categories' products.

"These include its big vaping brands Vuse and Velo and these 'new categories' sales are seen as the company's answer to declining levels of cigarette smoking in the West."

Elsewhere, Unilever advanced 7.12% after announcing a €1.5bn share buyback, accompanied by a return to volume growth in the final quarter of 2023.

Compass Group rose 3.59% following a strong start to its financial year, with organic revenue surpassing full-year guidance.

Babcock International Group soared by 7.09% after JPMorgan raised its price target, citing increased earnings per share estimates post-capital markets day.

Finally, media business Future gained 3.08% despite reporting challenges in digital advertising revenues and foreign exchange fluctuations on Wednesday, as year-to-date trading remained broadly in line with expectations.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,595.48 -0.44%
FTSE 250 (MCX) 19,102.72 -0.01%
techMARK (TASX) 4,393.75 -0.47%

FTSE 100 - Risers

Smith (DS) (SMDS) 308.60p 9.78%
British American Tobacco (BATS) 2,484.00p 7.12%
Smurfit Kappa Group (CDI) (SKG) 3,130.00p 5.32%
Unilever (ULVR) 4,024.50p 3.15%
Diploma (DPLM) 3,386.00p 2.92%
Compass Group (CPG) 2,211.00p 2.84%
3i Group (III) 2,382.00p 2.06%
Admiral Group (ADM) 2,531.00p 1.69%
Entain (ENT) 986.60p 1.46%
Experian (EXPN) 3,338.00p 1.46%

FTSE 100 - Fallers

AstraZeneca (AZN) 9,823.00p -6.36%
SSE (SSE) 1,575.50p -4.69%
Persimmon (PSN) 1,377.00p -4.31%
Mondi (MNDI) 1,336.50p -3.26%
Antofagasta (ANTO) 1,650.00p -2.80%
Coca-Cola HBC AG (CDI) (CCH) 2,188.00p -2.77%
Barratt Developments (BDEV) 487.50p -2.69%
JD Sports Fashion (JD.) 104.50p -2.65%
Standard Chartered (STAN) 579.40p -2.43%
Taylor Wimpey (TW.) 145.25p -2.35%

FTSE 250 - Risers

Ashmore Group (ASHM) 232.40p 9.93%
Babcock International Group (BAB) 459.20p 8.25%
Syncona Limited NPV (SYNC) 122.80p 6.23%
Me Group International (MEGP) 134.60p 4.34%
Tullow Oil (TLW) 30.04p 3.59%
Dr. Martens (DOCS) 86.95p 3.20%
Future (FUTR) 685.50p 3.08%
Bridgepoint Group (Reg S) (BPT) 267.20p 3.01%
Spirent Communications (SPT) 118.90p 2.85%
Diversified Energy Company (DEC) 935.00p 2.80%

FTSE 250 - Fallers

PZ Cussons (PZC) 100.60p -5.98%
Bluefield Solar Income Fund Limited (BSIF) 105.00p -3.49%
Darktrace (DARK) 347.90p -3.08%
Wizz Air Holdings (WIZZ) 2,114.00p -2.98%
Close Brothers Group (CBG) 465.40p -2.80%
Kainos Group (KNOS) 1,113.00p -2.62%
Pennon Group (PNN) 668.50p -2.55%
Watches of Switzerland Group (WOSG) 372.40p -2.46%
Aberforth Smaller Companies Trust (ASL) 1,310.00p -2.38%
Harbour Energy (HBR) 254.90p -2.22%

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