London close: Stocks mixed after wave of corporate updates

(Sharecast News) - Equity markets in London were mixed at the close on Thursday as investors mulled a downward revision to US economic growth, with disappointing results from the likes of Mondi and BAE Systems and ex-dividend stocks weighing. The FTSE 100 ended the session down 0.29% at 7,907.72, while the FTSE 250 added 0.56% to 19,790.49.

Sterling was in the red, last trading down 0.27% on the dollar at $1.2014, and weakening 0.05% against the euro to change hands at €1.1353.

"European markets have seen a broadly positive session today with the DAX on course to post its highest close in over a year, while the FTSE 100 has been hampered by the likes of several big companies going ex-dividend," said CMC Markets chief market analyst Michael Hewson.

"GSK, AstraZeneca, Unilever, and Standard Chartered are contriving to pull up to 35 points off the UK benchmark."

In economic news, UK retail sales growth stalled in the year to February ahead of an expected decline next month, according to the latest distributive trades survey from the Confederation of British Industry.

The CBI's reported sales balance rose to +2 from -23 in January.

A balance is the weighted difference between the percentage of retailers reporting an increase and those reporting a decrease.

"Whilst retail sales volumes were largely unchanged in the year to February and slightly above seasonal norms, firms remain pessimistic about their business outlook and are bracing themselves for yet another fall in sales next month," said Martin Sartorius, CBI principal economist.

"At the upcoming Spring Budget, the government must take action to tackle the roadblocks in the way of the UK's economic growth."

Sartorius said retailers were now looking for action in areas such as skills and investment.

"Transforming the Apprenticeship Levy into a 'Skills Challenge Fund' and incentivising businesses investment through introducing a successor to the super deduction will be crucial for improving our economic prospects."

On the continent, the cost of living in the euro area fell a bit more slowly at the start of 2023 than previously thought.

According to Eurostat, the single currency bloc's consumer price index (CPI) declined at a month-on-month pace of 0.2%.

That brought the annual rate of increase lower to 8.6% for January, from 9.2% in December and compared to a preliminary print of 8.5%.

"Looking ahead, our forecasts imply that headline inflation is now falling steadily," said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.

"This shift is mainly due to lower energy inflation, and in the second half of the year, falling inflation in food, alcohol and tobacco and the core, too."

Vistesen quipped that might sound positive for bond markets, but it would not be.

"The near-term outlook for core inflation is ugly.

"Core inflation will climb further in coming months, and we see a risk that it could hit 6% by March, and we now think it will remain at 5% or higher through July."

Across the pond, the US economy expanded at a slightly slower pace at the end of 2022 than previously thought, although price pressures were greater.

According to the Department of Commerce, American gross domestic product increased at a quarterly annualised pace of 2.7% in the fourth quarter, compared to a preliminary reading of 2.9%.

In particular, the Commerce Department revised its initial estimate for growth in household consumption down to 1.4% from 2.1%.

However, the chain-weighted price index - the broadest measure of inflation in the economy - was now reported to have advanced at a clip of 3.9%, instead of by 3.5%.

Similarly, the rate of increase in the core price deflator for personal consumption expenditures was put at 3.7%, half a percentage point more than previously estimated.

Finally on data, the US jobs market remained tight according to the latest weekly jobless claims data.

The Department of Labor reported that the number of initial unemployment claims slipped by a seasonally-adjusted 3,000 to 192,000 over the week ended 18 February, against consensus expectations for 197,000.

It said the four-week moving average, which aims to smooth out fluctuations in the data, rose 1,500 to 191,250.

Secondary claims for the week ended 11 February, which are those not being filed for the first time, fell by 37,000 to 1.654m.

Initial claims data for the week to 11 February were revised up by 1,000 to 194,000, while secondary claims for the week of 4 February were revised down by 5,000.

On London's equity markets, investors spent much of the day sinking their teeth into a barrage of earnings releases.

Mondi slid 4.82% after the paper and packaging group more than doubled full-year profits on higher prices, but warned that it continued to see softer demand and pricing, despite input costs declining.

BAE Systems was in the red by 0.02%, despite hailing a record order intake for 2022 and posting a rise in sales and underlying earnings amid an "elevated threat environment".

Drax Group was 3.71% lower despite saying it nearly doubled its full-year operating profits even as it continued to invest heavily in the business.

Howden Joinery Group was down 1.81% after it posted a jump in full-year profit and revenue on Thursday, and announced the launch of a £50m share buyback.

Pre-tax profit for 2022 was up 4% on the previous year and 55.7% higher versus 2019, at £405.8m, while revenues rose 10.8% on 2021 and 46.4% on 2019 to £2.3bn.

The firm said that reflected the strengths of its local, trade only, in-stock business model.

Ex-dividend stocks were a drag, with Barclays down 0.13%, GSK losing 1.63%, Land Securities Group slipping 0.5%, AstraZeneca off 2.52%, Unilever behind 1.71%, Standard Chartered and Redrow both weakening 0.1%, Plus500 sliding 2.27%, and Endeavour Mining 3.21% below the waterline.

On the upside, aerospace and defence company Rolls-Royce Holdings rocketed 23.68% after it posted a rise in operating profit as the post-pandemic recovery in international travel continued, and said it expected underlying earnings of between £0.8 and £1bn this fiscal year.

Advertising giant WPP gained 3.44% after hiking its dividend, saying it expected top-line growth of 3% to 5% for 2023 - ahead of market expectations - as it reported a rise in full-year profit and revenue.

John Wood Group was boosted 28.99% after it announced late on Wednesday that it had rejected three unsolicited, preliminary and conditional takeover proposals from Apollo Global Management, the last of which was at 230p per share.

Animal genetics company Genus jumped 8.65% after announcing that chief executive Stephen Wilson had decided to retire, while it posted a 14% rise in annual profits as it hoped for a price rebound this summer.

The company said pre-tax profits rose £42.2m, while sales were up by a quarter to £350m.

Morgan Sindall Group rose 7.34% after reporting a record set of final results, describing a strong performance despite market headwinds.

The construction and regeneration company said revenue increased 12% to £3.6bn, while adjusted profit before tax rose 7% to £136.2m.

In broker note action, retailer Next was 1.54% higher following an upgrade to 'buy' from 'neutral' by Bank of America Merrill Lynch.

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

Market Movers

FTSE 100 (UKX) 7,907.72 -0.29% FTSE 250 (MCX) 19,790.49 0.56% techMARK (TASX) 4,632.50 0.15%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 133.10p 23.68% International Consolidated Airlines Group SA (CDI) (IAG) 165.44p 4.34% WPP (WPP) 1,051.50p 3.44% Ocado Group (OCDO) 638.20p 3.24% Melrose Industries (MRO) 146.85p 3.05% Next (NXT) 6,872.00p 1.90% Flutter Entertainment (CDI) (FLTR) 13,920.00p 1.75% Lloyds Banking Group (LLOY) 52.00p 1.44% BP (BP.) 547.00p 1.41% Shell (SHEL) 2,482.00p 1.33%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,581.50p -5.53% Mondi (MNDI) 1,406.50p -4.81% Endeavour Mining (EDV) 1,691.00p -3.09% BT Group (BT.A) 137.20p -2.59% Anglo American (AAL) 3,009.50p -2.46% Rio Tinto (RIO) 5,836.00p -2.46% Smurfit Kappa Group (CDI) (SKG) 3,048.00p -2.37% Hargreaves Lansdown (HL.) 846.40p -2.11% Unilever (ULVR) 4,193.50p -1.71% United Utilities Group (UU.) 1,022.00p -1.64%

FTSE 250 - Risers

Wood Group (John) (WG.) 199.55p 28.99% Genus (GNS) 2,932.00p 8.43% Morgan Sindall Group (MGNS) 1,754.00p 7.34% Spectris (SXS) 3,365.00p 7.06% Molten Ventures (GROW) 381.60p 3.98% Ninety One (N91) 206.00p 3.88% Hunting (HTG) 322.00p 3.87% Clarkson (CKN) 3,220.00p 3.87% ASOS (ASC) 840.00p 3.70% IP Group (IPO) 65.45p 3.40%

FTSE 250 - Fallers

Darktrace (DARK) 257.60p -5.01% WH Smith (SMWH) 1,583.00p -4.58% Supermarket Income Reit (SUPR) 91.00p -4.01% Drax Group (DRX) 649.00p -3.71% Hays (HAS) 119.10p -3.64% The Renewables Infrastructure Group Limited (TRIG) 124.80p -3.26% W.A.G Payment Solutions (WPS) 75.70p -2.95% Octopus Renewables Infrastructure Trust (ORIT) 96.30p -2.73% Domino's Pizza Group (DOM) 287.80p -2.31% Plus500 Ltd (DI) (PLUS) 1,768.00p -2.27%