London close: Stocks bounce after Wall Street tech sell-off
By Josh White
Date: Tuesday 28 Jan 2025
(Sharecast News) - London stocks ended Tuesday on a positive note, as investors largely ignored Monday's tech selloff that weighed on Wall Street.
The FTSE 100 index advanced 0.35% to close at 8,533.87 points, while the FTSE 250 rose 1.08% to 20,588.51 points.
In currency markets, sterling was last down 0.55% on the dollar to trade at $1.2430, while iot edged up 0.08% against the euro, changing hands at €1.1922.
"UK shares are hovering around the flatline Tuesday as investors digest the latest corporate earnings reports and look forward to monetary policy updates from the Federal Reserve and the European Central Bank for further direction," said TickMill market strategy partner Patrick Munnelly.
"The utilities sector notably boosted the benchmark index by surging 2.2%.
"While the pound declined after a three-session climb, benefiting British equities, investor confidence waned on Monday due to the emergence of a cost-effective Chinese artificial intelligence model."
Munnelly said the development raised uncertainties about the dominance of AI frontrunners and their suppliers that previously propelled tech and semiconductor stock prices.
"A significant amount of focus is directed at the earnings reports of four out of the seven major companies set to be released later this week.
"The Federal Reserve's initial interest-rate decision of the year, anticipated to maintain its lending rate, is also in the spotlight on Wednesday.
"Furthermore, the December figures for personal consumption expenditures are due on Friday."
UK shop prices decline in January, rents fall for first time since 2019
In economic news, UK shop prices declined in January as retailers introduced steep discounts on non-food items, such as furniture and fashion, to drive post-holiday sales.
According to the British Retail Consortium, shop prices fell 0.4% from December, following no change in the previous month.
While food prices edged up 0.5% - a slight increase from December's 0.1% - non-food prices dropped 0.9%, accelerating from a 0.1% dip.
Annually, shop prices were 0.7% lower, driven by a notable easing in food inflation, which fell to 1.6%, the lowest rate since November 2021.
"Extensive January sales was good news for bargain hunters, with non-food products showing significant discounts, particularly for furniture and fashion, but less good news for retailers needing to shift excess stock," said the BRC's chief executive Helen Dickinson.
"Price cuts and deflation may not last much longer as retailers will soon feel the full impact of £7bn of new costs announced at the last Budget.
"Higher employer NICs, increased National Living Wage, and a new packaging levy mean that prices are expected to rise across the board."
In the UK rental market, the average advertised rent outside London fell for the first time since 2019, signaling improving supply.
Property marketing platform Rightmove reported that rents outside the capital averaged £1,341 per month in the fourth quarter, down 0.2% from the previous quarter.
Despite the quarterly drop, rents were still 4.7% higher than the same period last year, though that marked the slowest annual growth since 2021.
In London, rents reached a new high of £2,695 per month, up just 0.1% quarterly, with annual growth slowing to 2.4%, its lowest in three years.
"While new tenants are still paying more than they were at this time last year, the pace of growth continues to slow," said Rightmove's property expert Colleen Babcock.
"However, though this is the big picture of market activity, agents on the ground still tell us that the market is very hot, and some areas have improved more than others when it comes to the supply and demand balance.
"Our own data shows that the average rental property is still receiving 10 applications per property, which is lower than the peak, but still double the pre-pandemic norm."
On the continent, consumer confidence in France rose to a three-month high in January, with the household confidence index climbing to 92 from 89 in December, surpassing market expectations of 90.
That marked the highest reading since October but remained below the long-term average of 100, according to INSEE.
The improvement reflected cautious optimism despite ongoing economic uncertainties.
Across the Atlantic, US durable goods orders posted an unexpected decline in December, falling 2.2% month-on-month, the sharpest drop in six months.
The decline, driven by a 7.4% fall in transportation equipment orders, defied market forecasts of a 0.6% increase.
Excluding transportation, durable goods orders rose 0.3%, while core orders - excluding defense and aircraft - grew by 0.5%, exceeding expectations.
Retailers rise on lower shop prices, Smiths Group down after cybersecurity incident
On London's equity markets, retailers were among the gainers on the back of news of declining shop prices in January.
B&Q owner Kingfisher rose 3.19%, while Primark parent Associated British Foods climbed 2.83%.
Marks & Spencer gained 2.72%, and JD Sports Fashion advanced 1.38%.
Elsewhere, Computacenter gained 7.2% after reporting a record second-half performance, though it flagged that pre-tax profit for 2024 would fall to the lower end of expectations.
SSP Group added 4.38%, after the travel caterer maintained annual guidance following a 6% rise in first-quarter like-for-like sales, underpinned by growth in global travel demand.
Pets at Home Group rose 5.89% despite reporting a dip in third-quarter revenue, with the company reaffirming full-year guidance.
Soft drinks maker AG Barr climbed 6.69% after posting higher full-year sales and profits, while Rentokil Initial edged up 1.09%, supported by improved North American organic growth.
Outside the FTSE 350, Halfords surged 13.33% after upgrading its full-year profit expectations.
On the downside, Smiths Group fell 2.02% after disclosing a cybersecurity incident, while RS Group dropped 1.41%, citing lower third-quarter revenues and weaker European business confidence.
Recruitment firm SThree declined 1.58%, warning of a challenging year ahead due to a sluggish jobs market.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,533.87 0.35%
FTSE 250 (MCX) 20,588.51 1.08%
techMARK (TASX) 4,762.79 1.03%
FTSE 100 - Risers
Experian (EXPN) 3,966.00p 3.74%
Scottish Mortgage Inv Trust (SMT) 1,042.00p 3.73%
Spirax Group (SPX) 7,960.00p 3.71%
Halma (HLMA) 2,944.00p 3.70%
Barratt Redrow (BTRW) 452.50p 3.59%
Whitbread (WTB) 2,905.00p 3.38%
Kingfisher (KGF) 246.00p 3.19%
Centrica (CNA) 136.40p 3.18%
Persimmon (PSN) 1,274.00p 2.70%
Associated British Foods (ABF) 1,919.50p 2.67%
FTSE 100 - Fallers
Beazley (BEZ) 812.00p -2.46%
Antofagasta (ANTO) 1,659.00p -2.21%
Fresnillo (FRES) 657.00p -2.16%
Smiths Group (SMIN) 1,845.00p -2.02%
Smurfit Westrock (DI) (SWR) 4,345.00p -1.99%
Glencore (GLEN) 354.95p -1.81%
Rio Tinto (RIO) 4,813.00p -1.77%
Rolls-Royce Holdings (RR.) 582.80p -1.19%
Mondi (MNDI) 1,209.50p -1.14%
Ashtead Group (AHT) 5,204.00p -1.14%
FTSE 250 - Risers
Carnival (CCL) 2,005.00p 8.76%
Computacenter (CCC) 2,268.00p 7.39%
Barr (A.G.) (BAG) 622.00p 6.69%
Oxford Nanopore Technologies (ONT) 146.00p 6.41%
Pets at Home Group (PETS) 221.80p 5.42%
Raspberry PI Holdings (RPI) 699.75p 5.19%
Mony Group (MONY) 189.60p 4.41%
SSP Group (SSPG) 178.90p 4.38%
Ashmore Group (ASHM) 169.60p 4.31%
Foresight Group Holdings Limited NPV (FSG) 381.00p 3.81%
FTSE 250 - Fallers
Burberry Group (BRBY) 1,113.50p -1.72%
Discoverie Group (DSCV) 648.00p -1.67%
Softcat (SCT) 1,497.00p -1.64%
Harbour Energy (HBR) 237.60p -1.61%
SThree (STEM) 280.50p -1.58%
RS Group (RS1) 663.50p -1.41%
Diversified Energy Company (DEC) 1,288.00p -1.38%
Energean (ENOG) 932.50p -1.17%
Hochschild Mining (HOC) 170.00p -1.16%
Herald Investment Trust (HRI) 2,310.00p -1.07%
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