London close: Stocks turn weaker ahead of busy week for earnings

(Sharecast News) - London's stock market saw slight declines by the close on Monday, as investors turned their attention to a week filled with corporate earnings reports and central bank announcements. The FTSE 100 finished down 0.03% at 7,632.74 points, while the FTSE 250 experienced a slightly steeper decline, closing 0.14% lower at 19,311.16 points.

In currency markets, sterling was last down 0.17% on the dollar to trade at $1.2682, while it strengthened 0.28% against the euro to change hands at €1.1736.

"Today marks a lull before the calendar heats up with earnings and central bank decisions," said IG chief market analyst Chris Beauchamp.

"As a result, we have seen quiet trading on both sides of the Atlantic.

"Equity markets have managed to hold on to their recent gains throughout January, but with so much in the calendar between now and Friday, investors are likely to endure a more volatile period."

Beauchamp added that attacks on US soldiers in Jordan seemed to hint that a widening of the conflict in the Middle East was at hand, but by the end of Monday there had been a sharp drop in crude prices.

"Both Brent and WTI are down over 2%, as the lack of any major US response so far and growing worries about China's economy resulted in a push to the downside.

"Crude has rallied from the December lows, but still-weak global demand makes further gains from here uncertain at best."

UK private sector still facing challenges in last quarter

In economic news, fresh survey results from the Confederation of British Industry (CBI) revealed that the UK's private sector faced continued challenges in the last three months, with activity showing signs of decline.

The CBI's latest growth indicator reported a weighted balance of -11 for private sector activity in the three months leading up to January, compared to December's figure of -8.

That marked the 18th consecutive month in which private sector activity remained either stagnant or declined, as noted by the CBI.

The survey showed that consumer services experienced a notable drop in volumes, registering a balance of -25, while business and professional services saw volumes remaining unchanged.

In the manufacturing sector, output once again dipped into negative territory, recording a figure of -10, down from 0 in the prior month.

Furthermore, distribution sales exhibited a significant decline, marking the fastest pace since July 2020, with a balance of -29.

Despite the current challenges, there was a glimmer of optimism for the coming quarter.

The survey suggested that economic conditions were not expected to deteriorate further, with activity anticipated to remain relatively stable, reflecting a balance of 3.

Additionally, there was a positive shift in hiring intentions within the services sector, as the indicator rose to 11 from -2 in December, indicating a potential uptick in employment prospects.

"The new year has so far failed to breathe new life into the UK private sector, with our latest surveys signalling a continuation of last year's weak growth momentum," said Alpesh Paleja, CBI lead economist.

"There is some room for encouragement, with both services and manufacturing firms hopeful of seeing a pick-up in activity.

"However, it does look like the economy overall is set to remain stagnant at best in the near term."

Paleja called on the government to use the March budget to address "acute" labour shortages, improve competition and invest "meaningfully" in high-growth industries.

Oil majors maintain some gains, Ferrexpo slides

On London's equity markets, BP rose 0.89% and Shell managed gains of 0.93%, giving up some earlier strength which came in response to rising oil prices, driven by escalating tensions in the Middle East.

Precious metals miner Fresnillo experienced growth of 9.98% as gold prices surged.

Analysts pointed to the increase in demand for safe-haven assets due to growing geopolitical uncertainty, with recent incidents in the Middle East contributing to this trend.

Defence contractor BAE Systems was ahead 1.24% amid the heightened geopolitical tensions.

Concerns over recent attacks on US troops in Bahrain, allegedly linked to Iran-backed rebels, prompted investors to turn to defence-related stocks.

Ryanair, despite cutting its full-year profit forecast and reporting a substantial decline in third-quarter net profit, ascended 4.18% in London trading.

The low-cost airline's profit decline was attributed to higher fuel costs and the removal of its flights from online travel agents.

Nevertheless, the company's traffic and average fares saw growth during the quarter.

Fashion brand Superdry saw a 0.36% uptick after announcing a collaboration with advisors to explore cost-saving options.

The move aligned with the company's turnaround strategy and aims to secure long-term success.

Reports over the weekend suggested that Superdry could be considering options such as a company voluntary arrangement (CVA) or restructuring plan.

On the downside, iron ore pellet producer Ferrexpo declined 2.45% after it confirmed a claim of around $125m against it in an ongoing legal dispute involving its largest shareholder.

The company said it intended to appeal this decision to the Supreme Court in Ukraine.

In broker note action, Kingfisher, the owner of B&Q and Castorama, decreased 1.87% following a downgrade from 'outperform' to 'sector perform' by RBC Capital Markets.

The downgrade was attributed to caution regarding the outlook for France and consensus earnings in the near term, with RBC suggesting greater valuation potential in other UK retailers like B&M.

Schroders faced a 3.73% decline in its stock value after receiving an 'underperform' rating from BNP Exane, while Intertek Group added 0.45% following an upgrade to 'buy' by Jefferies.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,632.74 -0.03% FTSE 250 (MCX) 19,311.16 -0.14% techMARK (TASX) 4,374.10 -0.31%

FTSE 100 - Risers

Fresnillo (FRES) 546.80p 9.98% RS Group (RS1) 788.60p 2.76% WPP (WPP) 780.60p 1.56% Entain (ENT) 984.40p 1.39% SEGRO (SGRO) 876.80p 1.34% BAE Systems (BA.) 1,182.50p 1.24% Melrose Industries (MRO) 588.00p 1.24% Pershing Square Holdings Ltd NPV (PSH) 3,722.00p 1.20% Land Securities Group (LAND) 667.60p 1.09% Rentokil Initial (RTO) 408.00p 0.99%

FTSE 100 - Fallers

Airtel Africa (AAF) 120.50p -3.91% Schroders (SDR) 409.20p -3.72% St James's Place (STJ) 647.00p -3.55% Intermediate Capital Group (ICP) 1,753.00p -3.42% Prudential (PRU) 831.40p -3.12% Auto Trader Group (AUTO) 724.20p -2.86% Phoenix Group Holdings (PHNX) 511.20p -2.30% Croda International (CRDA) 4,668.00p -2.08% Vodafone Group (VOD) 69.30p -2.06% Kingfisher (KGF) 220.90p -1.87%

FTSE 250 - Risers

Hochschild Mining (HOC) 105.90p 8.70% easyJet (EZJ) 547.20p 3.48% Trainline (TRN) 326.60p 3.35% Baltic Classifieds Group (BCG) 233.50p 3.09% Volution Group (FAN) 431.80p 2.71% Abrdn Private Equity Opportunities Trust (APEO) 495.00p 2.59% Hammerson (HMSO) 27.06p 2.50% Investec (INVP) 522.80p 2.35% Coats Group (COA) 73.30p 2.09% LXI Reit (LXI) 105.60p 2.03%

FTSE 250 - Fallers

Telecom Plus (TEP) 1,440.00p -6.25% Close Brothers Group (CBG) 535.50p -4.55% Bridgepoint Group (Reg S) (BPT) 272.40p -4.11% Abrdn (ABDN) 168.15p -4.11% Helios Towers (HTWS) 81.50p -3.55% AJ Bell (AJB) 314.40p -3.50% Watches of Switzerland Group (WOSG) 376.00p -3.29% Bodycote (BOY) 640.00p -3.03% Lancashire Holdings Limited (LRE) 585.00p -2.99% ITV (ITV) 59.92p -2.98%