London close: Stocks fall further as economic jitters grow

(Sharecast News) - London stocks were weaker at the close again on Thursday, having taken their cue from a selloff on Wall Street overnight amid growing concerns about global growth. The FTSE 100 ended the session down 1.82% at 7,302.74, and the FTSE 250 was off 1.31% at 19,689.02.

Sterling was in positive territory, meanwhile, rising 1.38% on the dollar to $1.2511, and advancing 0.16% against the euro to change hands at €1.1816.

"The bounce of the first half of the week is a distant memory," said IG chief market analyst Chris Beauchamp.

"Growth worries are back to the fore and investors are back to selling every bounce as they fret about a recession in the US and elsewhere.

"The end of earnings season might provide some brief respite from all the negativity, but with more high inflation readings and interest rate hikes to come stocks are going to suffer a lot more bad news."

On the economic front, manufacturing output in the UK grew at its fastest pace in 10 months over the quarter to May, although the Confederation of British Industry survey showed confidence falling further.

The CBI's total orders balance rose to +26 from +14 in April, coming in above consensus expectations of +11.

It found that output still failed to keep pace with demand, however, as the volume of stocks of finished goods became less adequate compared with the previous month.

Confidence, meanwhile, showed a further decline in the quarter to May, while investment plans for buildings and plant and machinery remained weak.

"Manufacturers have reported output growth and order books improving in May," said CBI deputy chief economist Anna Leach.

"But cost pressures remain acute and are pushing manufacturers to raise prices.

"Sentiment among manufacturers has fallen in recent months as the outlook has deteriorated following Russia's invasion of Ukraine, and investment plans are being scaled back."

Leach said rising costs were hitting consumers and businesses alike, adding that the government needed to take action now to support the economy through the challenging months ahead.

"Putting pounds in the pockets of people already struggling should not be delayed, and must be coupled with action to support firms' cash flow and to stimulate investment."

Across the pond, factory sector activity in the US mid-Atlantic region cooled significantly in May, largely as a result of slower stock building.

The Federal Reserve Bank of Philadelphia's closely-followed manufacturing sector index declined from an April print of 17.6 to 2.6 - far lower than consensus expectations for a reading of 16.1.

Existing home sales in the US fell in April, meanwhile, with the slowdown in activity appearing set to continue.

According to the National Association of Realtors, existing home sales fell to an annual seasonally-adjusted pace of 5.61 million in April, or by 2.4% month-on-month.

That was roughly in line with the consensus among economists for a pace of 5.66m.

Back on home shores it was a sea of red in equity markets, with Tesco down 1.28%, Unilever sliding 3.86%, PageGroup off 5.81%, Bunzl 3.86% weaker, and GlaxoSmithKline 1.4% lower as they all traded without entitlement to the dividend.

Royal Mail tumbled 12.38% by the close after it warned of price increases and £350m in cost cuts in a bid to combat soaring inflation, after reporting a rise in full-year profits.

Auction Technology Group reversed earlier gains to fall 1.06%, despite lifting its full-year revenue growth guidance following a better-than-expected first half.

Technology-heavy Scottish Mortgage Investment Trust was on the back foot by 2.36% after the release of its full-year results.

Currys was also in the red, losing 5.69% after the electricals retailer said Ian Dyson would succeed Ian Livingston as chairman from September.

On the upside, budget airline easyJet ascended 0.12% after a turbulent session, after it said it expected third-quarter capacity to be 90% of pre-pandemic levels and that it had narrowed half-year losses.

Home repair provider HomeServe was a particularly bright spot, surging 10.16% after it agreed to be bought by Canada's Brookfield Asset Management in a £4.1bn deal.

Under the agreed terms, HomeServe shareholders will receive 1,200p per share in cash - a 71% premium to the closing price on 23 March, which was the last trading day before the offer period started.

Elsewhere, Airtel Africa managed gains of 0.42% after its subsidiary SmartCash PSB launched operations in Nigeria.

Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk and Alexander Bueso.

Market Movers

FTSE 100 (UKX) 7,302.74 -1.82% FTSE 250 (MCX) 19,689.02 -1.31% techMARK (TASX) 4,288.59 -0.54%

FTSE 100 - Risers

Dechra Pharmaceuticals (DPH) 3,400.00p 4.17% Fresnillo (FRES) 774.20p 3.56% Endeavour Mining (EDV) 1,813.00p 3.30% Aveva Group (AVV) 2,135.00p 2.99% Ocado Group (OCDO) 743.00p 2.09% Anglo American (AAL) 3,467.00p 1.58% Hikma Pharmaceuticals (HIK) 1,698.50p 1.49% Antofagasta (ANTO) 1,425.00p 1.14% Whitbread (WTB) 2,618.00p 0.93% Burberry Group (BRBY) 1,586.00p 0.66%

FTSE 100 - Fallers

Royal Mail (RMG) 300.00p -12.38% 3i Group (III) 1,178.00p -11.03% DCC (CDI) (DCC) 5,666.00p -6.35% Bunzl (BNZL) 2,767.00p -5.21% Diageo (DGE) 3,570.00p -5.08% Intermediate Capital Group (ICP) 1,358.50p -4.99% Hargreaves Lansdown (HL.) 845.20p -4.95% Pershing Square Holdings Ltd NPV (PSH) 2,440.00p -4.87% Unilever (ULVR) 3,451.50p -4.81% Abrdn (ABDN) 178.90p -4.46%

FTSE 250 - Risers

Homeserve (HSV) 1,160.00p 10.16% Darktrace (DARK) 340.00p 5.20% Ferrexpo (FXPO) 165.00p 4.50% Oxford Biomedica (OXB) 503.00p 3.18% Hochschild Mining (HOC) 104.90p 2.74% Diversified Energy Company (DEC) 121.00p 2.72% Spirent Communications (SPT) 230.20p 2.04% BlackRock World Mining Trust (BRWM) 700.00p 1.89% Spire Healthcare Group (SPI) 209.50p 1.70% Wood Group (John) (WG.) 237.90p 1.67%

FTSE 250 - Fallers

Pagegroup (PAGE) 448.80p -7.81% Chrysalis Investments Limited NPV (CHRY) 121.40p -6.92% Ninety One (N91) 216.20p -6.00% Currys (CURY) 79.60p -5.69% C&C Group (CDI) (CCR) 196.50p -5.35% Great Portland Estates (GPE) 640.00p -5.04% TI Fluid Systems (TIFS) 153.00p -4.97% TBC Bank Group (TBCG) 1,276.00p -4.92% Polymetal International (POLY) 242.50p -4.90% Helios Towers (HTWS) 110.70p -4.90%