London close: Stocks manage positive finish despite crude slide

(Sharecast News) - London's stock markets finished in positive territory on Wednesday, as eurozone PMI data indicated the recession may not be as deep as expected, and investors sifted through some data from across the pond. The FTSE 100 ended the session up 0.41% at 7,585.19, and the FTSE 250 was ahead 1.34% at 19,391.07.

Sterling was also in the green, to last rise 0.86% on the dollar to $1.2071, as it gained 0.23% against the euro to trade at €1.1372.

"One session is a blip, but two might be a trend - at least, that is what many investors will be hoping about the relationship between US and European stocks," said IG chief market analyst Chris Beauchamp.

"After years in which it was folly to do anything but buy American stocks, there are signs perhaps that non-US equities are coming into their own once again."

Beauchamp said that while US stocks would have been kept in check today because of Fed minutes, and then the run of job data, it still looked like investors were "much keener" on putting their money to work this side of the Atlantic.

"Sadly for the UK the FTSE 100 hasn't had another day of gains, with miners and oil firms weighing down the index despite a stellar day for Fresnillo as gold surges."

On the economic front, take-home grocery sales hit £12.8bn over the four weeks ended 25 December according to data from Kantar, marking the first time in history that sales breached the £12.0bn mark.

Sales increased 7.6% month-on-month and 9.4% year-on-year, the fastest rate recorded since February 2021, with mince pie value sales up 19% annually and Christmas pudding sales increasing 16% in value and 6% in volume.

The rise came as grocery price inflation went down by 0.2 points in December to 14.4% - the second time in a row the rate had dropped.

However, sales measured by volume are actually down by 1% year-on-year, showing the challenges shoppers continue to face.

Tesco, Sainsbury's, Asda and Morrisons accounted for more than two-thirds of all spending, while Aldi remained the fastest growing grocer with 27.0% growth - taking its market share up from 7.7% this time last year to 9.1%.

Elsewhere, overnight data from the British Retail Consortium showed that retail inflation in the UK stabilised at 7.3% in December, down 10 basis points versus the annual rate stated for November but still ahead of the three-month average of 7.1%.

Mortgage approvals in Britain meanwhile plunged much more than expected in November according to fresh data, as the fallout from the ill-fated mini-budget of the short-lived Truss administration lingered.

According to the Bank of England, around 46,100 mortgages were approved in the month, sliding from a revised total of 57,900 in October.

It was also well below the 53,000 total that economists had been expecting.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the sharp fall came as "no surprise", given the tentative fall in quoted mortgage rates from October's high levels and the withdrawal of some lenders in the wake of Kwasi Kwarteng's mini-budget.

"Surveys suggest that mortgage approvals will remain very low, if not fall further, in the near term - a net balance of -38 surveyors reported in November that new buyer enquiries increased on the previous month, according to RICS, while a net balance of -33 households thought in December that it is a good time to buy a home, according to the Building Societies Association," Tombs said.

"Note that comparatively low 3.35% effective rate for new mortgages in November, up just 26-basis points from October and well below the 5.5%-to-6.0% range for new quoted rates, simply reflects time lags.

"The effective mortgage rates data refers to completed housing transactions, relating to mortgages agreed with lenders a few months ago."

On the continent, eurozone business activity contracted less than initially thought in December, according to a final survey reading released earlier.

S&P Global's final composite purchasing managers' index (PMI) for the single currency bloc rose to 49.3 in December from November's 47.8, and above a preliminary estimate of 48.8.

A reading of below 50 indicates contraction, and while the index had been below that mark since July, the latest reading was its highest in five months.

"The eurozone economy continued to deteriorate in December, but the strength of the downturn moderated for a second successive month, tentatively pointing to a contraction in the economy that may be milder than was initially anticipated," said Joe Hayes, senior economist at S&P Global Market Intelligence.

"Nevertheless, there is little evidence across the survey results to suggest the eurozone economy may return to meaningful and stable growth any time soon."

Across the pond, a key gauge of labour market tightness in the US was little changed towards the end of 2022, contrary to expectations, according to a closely-followed survey.

The Department of Labor reported that in seasonally-adjusted terms, the number of job openings dipped to 10.458 million in November from 10.512 million in October.

That was better than the drop to 9.9 million anticipated by economists.

Staying stateside, activity in the US manufacturing sector cooled a bit more but roughly as expected during the last month of 2022 according to another survey.

The Institute for Supply Management's factory sector PMI dipped to 48.4 in December from 49.0 for the month before, just shy of expectations for a print of 48.5.

Comments from purchasing managers focused on weaker demand, staffing shortages and improved supply chain conditions.

On London's equity markets, Burberry Group gained 5.56% as the high-end fashion chain was boosted by hopes of a re-opening of its key Chinese market.

Low-cost airlines Wizz Air Holdings and easyJet jumped 10.38% and 7.48%, respectively, on read-across from news that sector peer Ryanair saw a 21% rise in passenger numbers for December, as travel rebounded from the Covid pandemic.

Europe's largest airline said it carried 11.5 million passengers compared with 9.5 million a year earlier.

On a rolling basis, Ryanair said 160.4m passengers flew its routes in 2022, up 121%, while its December load factor was up 11% to 92% on the year.

Retailers were also in the green on the back of Kantar's grocery data, with J Sainsbury up 4.8%, Ocado Group ahead 9.03%, and B&M European Value Retail rising 4.95%.

On the downside were oil majors Shell and BP, which slid a respective 3.46% and 3.62% on the back of weaker oil prices.

"It is another day of sharp losses for oil prices too, as it appears OPEC actually boosted production in December," IG's Chris Beauchamp noted.

"This seems to be totally at odds with the broad expectation of a recession this year, and while we'll find out who was right in due course, it certainly doesn't do much for those hoping for oil to recover.

"Much rides on tonight's Fed minutes and the rest of the week's US data - if the end product of that is a weakening dollar then oil might get another lift."

Natural gas futures were also in focus, with a fall in prices there seeing British Gas owner Centrica close down 2.55%, and SSE end the session 1.68% weaker.

Reporting by Josh White for Sharecast.com. Additional reporting by Frank Prenesti, Iain Gilbert and Alexander Bueso.

Market Movers

FTSE 100 (UKX) 7,585.19 0.41% FTSE 250 (MCX) 19,391.07 1.34% techMARK (TASX) 4,476.96 1.09%

FTSE 100 - Risers

Ocado Group (OCDO) 707.20p 9.03% Fresnillo (FRES) 967.40p 7.30% Burberry Group (BRBY) 2,182.00p 5.56% Prudential (PRU) 1,239.50p 5.31% BT Group (BT.A) 120.15p 5.05% B&M European Value Retail S.A. (DI) (BME) 445.20p 4.95% Sainsbury (J) (SBRY) 235.70p 4.80% DCC (CDI) (DCC) 4,329.00p 4.59% International Consolidated Airlines Group SA (CDI) (IAG) 134.54p 4.41% JD Sports Fashion (JD.) 135.25p 4.28%

FTSE 100 - Fallers

Glencore (GLEN) 506.60p -6.94% BP (BP.) 465.85p -3.62% Shell (SHEL) 2,285.00p -3.46% Anglo American (AAL) 3,180.00p -2.66% Centrica (CNA) 89.60p -2.55% SSE (SSE) 1,635.50p -1.68% BAE Systems (BA.) 850.00p -1.41% Reckitt Benckiser Group (RKT) 5,760.00p -0.79% Compass Group (CPG) 1,937.00p -0.67% Antofagasta (ANTO) 1,554.00p -0.51%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 2,095.00p 10.38% easyJet (EZJ) 354.70p 7.48% ASOS (ASC) 570.00p 7.04% Carnival (CCL) 632.00p 6.76% Molten Ventures (GROW) 397.00p 5.64% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,430.00p 5.19% Ashmore Group (ASHM) 255.80p 4.84% 888 Holdings (DI) (888) 92.20p 4.71% Crest Nicholson Holdings (CRST) 255.20p 4.68% Currys (CURY) 59.50p 4.66%

FTSE 250 - Fallers

Drax Group (DRX) 633.50p -5.66% Energean (ENOG) 1,217.00p -5.07% Abrdn Private Equity Opportunities Trust (APEO) 428.00p -4.68% TBC Bank Group (TBCG) 2,185.00p -3.96% Harbour Energy (HBR) 283.40p -3.28% Aston Martin Lagonda Global Holdings (AML) 150.65p -2.93% Capricorn Energy (CNE) 245.00p -2.85% Tullow Oil (TLW) 35.34p -2.75% Apax Global Alpha Limited (APAX) 182.00p -2.67% CMC Markets (CMCX) 227.00p -2.37%