London close: Rising oil prices help lift energy shares

(Sharecast News) - London's equity markets had pared some earlier gains but still managed a positive finish by the close on Monday, with energy shares pacing the advance. The FTSE 100 ended the session up 0.9% at 7,223.24, and the FTSE 250 was ahead 0.96% at 19,015.15.

Sterling was also in the green, last rising 1.14% on the dollar to trade at $1.1990, and strengthening 0.16% against the euro to change hands at €1.1783.

"The tough outlook for insurers may have wiped another 7% off Admiral thanks to Direct Line's update this morning, but the index is still solidly higher, led by hopes of a recovery in business for a swathe of sectors, including banks, oil and housebuilders," said IG chief market analyst Chris Beauchamp.

"For now the bounce has some strength to it, helped along by hopes that inflation might be easing, but the 4.5% rally in oil, while great for BP and Shell, means the worst may not be over."

On the economic front, house prices pushed higher for the sixth consecutive month according to property marketing platform Rightmove, fuelled by a shortage of homes for sale.

The average price of a property coming to market rose by 0.4% to £369,968 in July compared to June, or by 9.3% year-on-year.

As a result, Rightmove had revised its 2022 full-year forecast for house price growth up to 7%, from earlier guidance for 5%.

It found "a continuing desire to move and low numbers of homes for sale" were driving price growth, despite the cost of living crisis.

While the number of sellers rose 13% on 2021, the number of available homes for sale was down 40% on 2019.

"Though a softening in demand is moving the market from a boil to a simmer, it remains 26% up on 2019," said Tim Bannister, Rightmove's director of property science.

"With such an imbalance remaining between supply and demand, prices look underpinned and we would therefore only expect typical smaller seasonal month-on-month falls, rather than more significant price falls in the second half of the year."

Across the pond, sentiment among US housebuilders tumbled in July as high inflation and increased interest rates stalled the housing market, slowing sales and buyer traffic, according to the National Association of Home Builders.

The NAHB index of homebuilder activity and sentiment fell to 55 from 67 in June, coming in well below consensus expectations of 65.

"Production bottlenecks, rising home building costs and high inflation are causing many builders to halt construction because the cost of land, construction and financing exceeds the market value of the home," said NAHB chairman Jerry Konter.

"In another sign of a softening market, 13% of builders in the HMI survey reported reducing home prices in the past month to bolster sales and/or limit cancellations."

On London's equity markets, oil giants Shell and BP rose 6% and 5.14%, respectively, as prices for the thick black stuff rose.

Brent crude futures were last up 4.37% on ICE at $105.58 per barrel, and West Texas Intermediate 4.18% firmer on NYMEX at $101.67.

Elsewhere, Euromoney Institutional Investor surged 9.65% after agreeing to be bought by a private equity consortium led by France's Astorg Asset Management for £1.6bn.

The consortium, which also comprises London-based Epiris, will pay 1,461p per share in cash.

Deliveroo reversed earlier losses to close up 2.94%, even after it downgraded its full-year revenue guidance, highlighting "consumer headwinds" amid the cost-of-living crisis.

Based on the gross transaction value seen in the second quarter and a more cautious economic outlook, the company now forecast full-year gross transaction value growth of between 4% and 12% at constant currency, down from previous guidance of 15% to 25%.

Luxury sports car maker Aston Martin Lagonda rocketed 44.79% after last week's news that it had raised £653m in new equity.

On the downside, Direct Line Insurance tumbled 9.35% after it cut its full-year profits outlook after a spike in motor claims inflation and market volatility.

The company revised its combined operating ratio target range to 96% to 98% from a previous 93% to 95% outlined in May.

A ratio closer to 100% indicates reduced profitability.

Peer Admiral Group plunged 10.11% with a downgrade to both stocks from Jefferies adding to the negative sentiment.

GSK slid 17.56% after the artist formerly known as GlaxoSmithKline spun off its consumer healthcare arm Haleon, in Europe's largest listing for more than a decade.

Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk, Abigail Townsend and Frank Prenesti.

Market Movers

FTSE 100 (UKX) 7,223.24 0.90% FTSE 250 (MCX) 19,015.15 0.96% techMARK (TASX) 4,314.63 0.64%

FTSE 100 - Risers

Antofagasta (ANTO) 1,037.00p 4.49% M&G (MNG) 205.00p 4.41% Burberry Group (BRBY) 1,643.50p 3.59% Harbour Energy (HBR) 338.30p 3.49% Anglo American (AAL) 2,637.50p 3.43% Prudential (PRU) 1,010.50p 3.26% Glencore (GLEN) 419.80p 3.18% Pershing Square Holdings Ltd NPV (PSH) 2,550.00p 3.01% Rio Tinto (RIO) 4,711.00p 2.88% Ocado Group (OCDO) 779.80p 2.69%

FTSE 100 - Fallers

GSK (GSK) 1,389.80p -19.16% Admiral Group (ADM) 1,738.50p -7.65% Aviva (AV.) 389.60p -1.46% SEGRO (SGRO) 1,015.50p -1.26% Hikma Pharmaceuticals (HIK) 1,678.00p -1.24% Unilever (ULVR) 3,865.00p -1.10% Compass Group (CPG) 1,820.50p -1.00% Reckitt Benckiser Group (RKT) 6,358.00p -1.00% Unite Group (UTG) 1,146.00p -0.69% Relx plc (REL) 2,296.00p -0.65%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 608.80p 32.55% Euromoney Institutional Investor (ERM) 1,454.00p 9.49% Carnival (CCL) 728.60p 8.20% ASOS (ASC) 1,015.00p 6.01% Polymetal International (POLY) 178.00p 5.95% Energean (ENOG) 1,091.00p 5.89% Playtech (PTEC) 446.40p 5.83% Just Group (JUST) 67.55p 5.63% Tullow Oil (TLW) 44.76p 5.37% Provident Financial (PFG) 205.80p 4.95%

FTSE 250 - Fallers

Direct Line Insurance Group (DLG) 193.65p -10.51% Premier Foods (PFD) 105.20p -2.59% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,000.00p -2.44% Discoverie Group (DSCV) 624.00p -2.35% Hipgnosis Songs Fund Limited NPV (SONG) 107.20p -2.01% Bank of Georgia Group (BGEO) 1,412.00p -1.81% Hill & Smith Holdings (HILS) 1,198.00p -1.64% TBC Bank Group (TBCG) 1,164.00p -1.52% Plus500 Ltd (DI) (PLUS) 1,562.00p -1.51% Elementis (ELM) 100.20p -1.38%