London close: Stocks manage positive finish after mixed session

(Sharecast News) - London's financial markets experienced a mixed trading day on Monday, with the FTSE 100 and FTSE 250 indices closing in positive territory after spending much of the session in the red. The FTSE 100 inched up by 0.06%, reaching 7,694.19 points, while the FTSE 250 gained 0.95% to settle at 19,393.80 points.

Stocks faced initial downward pressure, primarily led by the mining sector, as investors turned their attention to the release of the latest US inflation data later in the week.

In currency markets, sterling was last up 0.32% on the dollar, trading at $1.2761, while it managed gains of 0.03% against the euro to change hands at €1.1628.

"After staging a late rally to end the year the FTSE 100 found itself unable to make further gains, but the index has weathered the losses for BP and Shell reasonably well this afternoon," said IG chief market analyst Chris Beauchamp.

"A strong update from Next puts investors on notice for a better set of trading updates this week and next, which could help the index to make further headway now that the initial January weakness is out of the way."

Beauchamp noted that Friday's post-non-farm payrolls bounce struggled to maintain momentum into the weekend, but with oil prices slumping again on Monday, traders still managed to rediscover their bullish mood.

"Saudi Arabia's move to reduce the official selling price for oil sends worrying signals for the crude market, but stocks will be grateful for any sign that inflation will keep abating.

"But the pending US CPI figure and upcoming earnings means inflows could remain limited for the time being."

Manufacturers more optimistic, recruiters remain cautious

In economic news, UK manufacturers showed increased optimism about the outlook for their sector compared to a year ago, according to fresh survey data from Make UK and PwC.

The survey, featuring responses from more than 200 senior manufacturing executives, revealed that 44.4% of companies anticipated a moderate to significant improvement in industry conditions in 2024, while just 20.5% expected conditions to worsen.

However, concerns lingered regarding domestic and international economic conditions, with 41% anticipating a deterioration in the UK and 38% foreseeing a worsening international landscape.

Nonetheless, 53% of respondents saw opportunities in new products for 2024, and 27% were expanding into new markets.

Additionally, 23% of manufacturing leaders identified opportunities in net-zero, digital technology, cloud computing, and artificial intelligence to boost productivity and operational efficiency.

"The last few years have been a rollercoaster of emotions for manufacturers, yet they have more than demonstrated their resilience time after time," said Stephen Phipson, chief executive of Make UK.

"We are now seeing some hope that conditions may be improving amid a more supportive and stable policy environment, but this must be cemented within a long-term industrial strategy.

"While undoubted challenges remain, the accelerating use of digital technologies, our strength in innovation and expansion into new markets sets the scene for manufacturing to be at the heart of efforts to boost growth."

Meanwhile, a separate industry survey published on Monday highlighted that UK firms remained cautious about hiring new staff due to the persistently weak economic outlook.

The UK Report on Jobs from KPMG and the Recruitment and Employment Confederation showed subdued recruitment intentions in December.

Permanent and temporary billings experienced a decline, albeit at a slower rate than in November.

The permanent staff placements index rose to 45.6 from 41.6 in November but remained below the 2022 average of 55.3.

At the same time, the permanent staff salaries index increased to 56.5 from 56.0 but remained below the 2022 average of 71.8.

The survey pointed to muted demand for staff and recruitment freezes in response to broader economic conditions.

"It's a muted end to the year for the labour market, which despite some loosening during 2023, continues to be tight," said Justine Andrew, partner and head of education, skills and productivity at KPMG UK.

"While the data for December shows hiring activity for both permanent and temporary roles fell at a softer rate than the previous month, businesses are still making redundancies and pausing hiring due to a lacklustre economic outlook."

On the continent, consumer confidence in the eurozone reached a 22-month high in December, according to the final estimates of a survey by the European Commission.

The consumer confidence index was revised to -15.0, slightly better than the initial estimate of -15.1 and a notable improvement from November's -16.9.

That marked the highest reading since February 2022, surpassing consensus expectations for no change.

On the manufacturing front in Germany, provisional figures released by Destatis showed that factory orders in November increased by a modest 0.3%, falling short of economists' expectations.

That followed a revised 3.8% decline in October and was well below the anticipated 1% increase.

However, there was better news for Germany's trade balance in November, as the country's exports surged beyond economists' projections.

Germany exported €131.2bn in goods during the month, representing a 3.7% increase from October, following a 0.4% decline in the prior month.

That performance exceeded analysts' expectations, which had forecasted a more modest 0.3% increase.

Miners and oil plays fall, CMC Markets jumps on revised guidance

On London's equity markets, miners faced downward pressure, with Anglo American, Glencore, and Antofagasta experiencing declines of 1.41%, 1.64%, and 0.68%, respectively.

Energy giant Shell slid 2.02% after it indicated potential fourth-quarter impairments in the range of $2.5bn to $4.5bn, primarily within its chemicals and products division.

The impairments were non-cash and post-tax in nature.

Oil producers faced setbacks in general, driven by a drop in crude prices following Saudi Arabia's decision to cut the price of its oil, signalling potential weaker demand ahead.

BP, Tullow Oil, Harbour Energy, Energean, and Diversified Energy Company all closed in the red.

On the upside, Melrose Industries added 3.31% after JPMorgan placed the shares on a 'positive catalyst watch' ahead of the forthcoming 2023 results in March.

Drax Group jumped 9.33% following reports that the UK government was set to approve a multibillion-pound carbon dioxide capture scheme.

The scheme could see the addition of carbon capture plants to Drax's generating units, potentially allowing it to remove more carbon from the atmosphere than it produces, making it the world's first carbon-negative thermal power station.

Plus500 rallied 7.53% after it reported revenue of $725m and EBITDA of $340m for the year ended 31 December, significantly surpassing market expectations.

Online trading platform CMC Markets rocketed 21.64% following an upward revision to its full-year net operating income guidance.

The company now expects 2024 net operating income to range between £290m and £310m, up from the previous guidance of £250m to £280m.

In broker note action, housebuilders were in focus after Bellway received a lift to 'overweight' by Barclays, while Barratt Developments and Berkeley Group Holdings were downgraded to 'equalweight.'

All three still closed in positive territory, however.

Legal & General gained 2.79% after an upgrade to 'buy' from 'hold' at Berenberg, while Ashtead Group declined 0.98% following a downgrade to 'hold' at HSBC.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,694.19 0.06% FTSE 250 (MCX) 19,393.80 0.95% techMARK (TASX) 4,292.54 0.60%

FTSE 100 - Risers

Melrose Industries (MRO) 581.40p 4.31% B&M European Value Retail S.A. (DI) (BME) 561.80p 3.16% Rolls-Royce Holdings (RR.) 305.20p 2.90% Legal & General Group (LGEN) 250.60p 2.79% Smith & Nephew (SN.) 1,070.50p 2.74% Taylor Wimpey (TW.) 148.25p 2.67% Prudential (PRU) 841.60p 2.53% Centrica (CNA) 155.50p 2.50% IMI (IMI) 1,591.00p 2.25% Marks & Spencer Group (MKS) 290.50p 2.22%

FTSE 100 - Fallers

Shell (SHEL) 2,491.00p -3.11% BP (BP.) 461.45p -2.62% Endeavour Mining (EDV) 1,540.00p -2.35% Anglo American (AAL) 1,846.80p -1.28% Glencore (GLEN) 457.10p -1.27% RS Group (RS1) 786.60p -1.23% United Utilities Group (UU.) 1,045.50p -1.13% Ashtead Group (AHT) 5,056.00p -0.82% Fresnillo (FRES) 540.20p -0.70% BAE Systems (BA.) 1,145.00p -0.69%

FTSE 250 - Risers

Drax Group (DRX) 536.40p 9.54% Plus500 Ltd (DI) (PLUS) 1,793.00p 8.01% Vistry Group (VTY) 965.50p 6.80% Crest Nicholson Holdings (CRST) 227.40p 5.28% Wizz Air Holdings (WIZZ) 2,239.00p 4.77% AJ Bell (AJB) 303.80p 4.54% Watches of Switzerland Group (WOSG) 659.00p 4.44% Persimmon (PSN) 1,454.00p 4.08% Bellway (BWY) 2,714.00p 4.06% Bytes Technology Group (BYIT) 590.00p 3.87%

FTSE 250 - Fallers

Ferrexpo (FXPO) 78.20p -5.56% Tullow Oil (TLW) 34.58p -5.26% Future (FUTR) 745.00p -4.24% Auction Technology Group (ATG) 472.00p -3.97% Diversified Energy Company (DEC) 1,140.00p -3.23% Energean (ENOG) 972.00p -2.80% Harbour Energy (HBR) 294.80p -2.45% Senior (SNR) 172.00p -2.27% Fidelity China Special Situations (FCSS) 200.00p -2.20% Jlen Environmental Assets Group Limited NPV (JLEN) 101.00p -2.13%