London close: Stocks mixed on UK data, Brexit 'reset' with EU

(Sharecast News) - London stocks ended Monday on a mixed note, as investors weighed economic indicators from the UK and Europe, as well as news that Westminster and Brussels have agreed a 'Brexit reset' deal. The FTSE 100 index edged up 0.17% to close at 8,699.31 points, while the FTSE 250 dipped 0.05% to 20,961.09 points.

In currency markets, sterling was last up 0.53% on the dollar to trade at $1.3354, while it slipped 0.1% against the euro, changing hands at €1.1886.

"Older hands in this market will remember when downgrades of US debt meant something, at least for a day or so," said IG chief market analyst Chris Beauchamp.

"Moody's Friday night downgrade of the US completes the trio of ratings agencies, but it does feel like a stable door, horse bolted moment given how little new information the news provides.

"Early trading on Wall Street suggests that it hasn't deterred the headlong rush back into US equities, which continue to defy the doubters with their post-April rebound."

Beauchamp noted that, given the Moody's news and the EU-UK deal, it was "hard to disentangle" dollar weakness and sterling strength on Monday.

"The deal should help to smooth the way to better economic ties, businesses preferring better access even if the UK has had to make significant concessions.

"It is yet another signal of how Trump's abrasive approach continues to upend the global order."

UK house prices rise modestly, consumer confidence improves

In economic news, UK house prices rose modestly in May, climbing 0.6% month-on-month and 1.2% year-on-year, according to Rightmove.

The average asking price hit a record £379,517, but the pace of growth was the slowest for May since 2016.

A surge in supply, with the number of homes for sale reaching a 10-year high and new listings up 14% annually, eased upward pressure on prices.

Rightmove noted that demand softened following last month's stamp duty changes, though a recent Bank of England rate cut could support affordability and housing activity later in the year.

"It's another new price record this month," said Rightmove's Colleen Babcock.

"But having seen a May price record for the last five years, it appears to be driven more by seasonal factors given that new buyer demand has slowed.

"This month's price increase being the lowest in May for nine years is a sign of a market that favours buyers and is more subdued than usual."

Consumer confidence in the UK meanwhile showed tentative improvement in May, with S&P Global's sentiment index rising to 45.2 from 44.5 in April.

While still below the neutral 50 mark, the latest reading reflected growing optimism among higher-income households and private sector employees.

Job security reached its highest level of the year, and wage growth extended its long-running streak.

Households continued to pare back spending, but the financial strain on savings eased slightly.

The survey also showed a growing expectation of further interest rate cuts from the Bank of England, as access to unsecured credit tightened.

"UK households remained resolutely downbeat in May, though the level of financial pessimism eased compared to April and has now even risen above the survey's long-run average," said Maryam Baluch, economist at S&P Global Market Intelligence.

"Encouragingly, households are feeling secure in their roles for the first time so far this year, perhaps in a sign that concerns over lay-offs relating to higher NI contributions and other wage-related measures reported in last year's Budget have calmed, now that the higher rates have taken effect.

"The main drag on sentiment instead came from consumer spending behaviour."

On the geopolitical front, the UK and the European Union agreed a new trade and defence pact overnight, marking a significant reset in post-Brexit relations.

The agreement included extended EU access to UK fishing waters for 12 years and the lifting of restrictions on British meat exports.

A new sanitary agreement and alignment of carbon trading schemes were expected to deliver nearly £9bn in economic benefit by 2040.

At the same time, a security partnership was established, opening the door to UK involvement in EU defence initiatives.

Annual summits and expanded travel arrangements were also agreed.

While the deal drew criticism from some UK political figures, business leaders broadly welcomed the reduction in trade barriers.

Inflation across the eurozone remained steady at 2.2% in April, as confirmed by Eurostat, with core inflation rising to 2.7%.

Inflation rates across major economies were mostly unchanged or slightly lower.

Despite meeting expectations, the European Commission issued a downbeat economic forecast, cutting its GDP growth outlook due to weaker exports and rising global trade tensions.

It said it now expected EU growth of 1.1% in 2025 and 1.5% in 2026, sharply below previous projections.

US-exposed stocks in the red, airlines fly higher after Ryanair figures

On London's equity markets, US-exposed stocks were in the red in response to Moody's downgrade of the United States' sovereign credit rating on Friday.

Flutter Entertainment, Scottish Mortgage Investment Trust, Pershing Square Holdings, and Ashtead Group all ended lower, shedding between 0.6% and 1.5%, as investor sentiment turned cautious following the cut from Aaa to Aa1.

Energy stocks also came under pressure amid declining oil prices.

BP dropped 1.93% after Jefferies downgraded the stock to 'hold', while Shell, Ithaca Energy, and Harbour Energy all recorded losses.

Distilling giant Diageo lost 1.12% after reiterating full-year guidance and disclosing a $150m annualised tariff impact, despite improved third-quarter organic sales.

Among mid-cap names, Kainos Group plunged 7.44% after issuing a cautious outlook alongside a 25% fall in full-year profit.

Dr Martens also fell sharply, down 6.39%, after RBC Capital Markets slashed its price target and lowered earnings forecasts.

On the upside, Genuit rose 3.36% after reporting solid revenue growth and reaffirming its annual guidance, noting no direct exposure to new US tariffs.

Miners Fresnillo and Hochschild Mining gained 2.6% and 2.85%, respectively, on the back of higher gold prices.

Airline stocks also advanced, with Ryanair up 0.98% despite a drop in annual profit, while easyJet, IAG, and Wizz Air added between 1% and nearly 3%.

Bus and rail operator Mobico Group rose 1.01% after a trading update showed a strong start to the year in Spain, offsetting weaker performance in the UK and Germany.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,699.31 0.17% FTSE 250 (MCX) 20,961.09 -0.05% techMARK (TASX) 4,726.49 -0.23%

FTSE 100 - Risers

easyJet (EZJ) 557.00p 3.17% International Consolidated Airlines Group SA (CDI) (IAG) 331.60p 2.63% Fresnillo (FRES) 1,026.00p 2.60% Tesco (TSCO) 371.10p 2.26% Imperial Brands (IMB) 2,756.00p 1.92% Vodafone Group (VOD) 72.46p 1.80% Centrica (CNA) 152.00p 1.77% Marks & Spencer Group (MKS) 361.10p 1.75% Games Workshop Group (GAW) 15,680.00p 1.69% Airtel Africa (AAF) 179.40p 1.24%

FTSE 100 - Fallers

BP (BP.) 365.50p -1.96% Spirax Group (SPX) 5,980.00p -1.89% JD Sports Fashion (JD.) 91.24p -1.62% Melrose Industries (MRO) 458.00p -1.59% Pershing Square Holdings Ltd NPV (PSH) 3,740.00p -1.53% Halma (HLMA) 2,956.00p -1.47% Antofagasta (ANTO) 1,800.00p -1.15% The Sage Group (SGE) 1,229.50p -1.13% InterContinental Hotels Group (IHG) 8,976.00p -1.08% CRH (CDI) (CRH) 7,306.00p -1.06%

FTSE 250 - Risers

W.A.G Payment Solutions (WPS) 65.20p 8.67% JPMorgan Indian Investment Trust (JII) 1,082.00p 6.08% AO World (AO.) 104.20p 4.51% Elementis (ELM) 132.20p 4.42% Genuit Group (GEN) 415.50p 3.36% Hochschild Mining (HOC) 267.00p 2.85% Wizz Air Holdings (WIZZ) 1,670.00p 2.83% Serco Group (SRP) 184.90p 2.38% Harworth Group (HWG) 174.00p 2.35% CMC Markets (CMCX) 263.00p 2.33%

FTSE 250 - Fallers

Kainos Group (KNOS) 753.00p -7.44% Dr. Martens (DOCS) 57.15p -6.39% Ithaca Energy (ITH) 133.40p -5.52% Discoverie Group (DSCV) 605.00p -5.47% Oxford Nanopore Technologies (ONT) 120.60p -4.89% THG (THG) 26.00p -4.41% Future (FUTR) 640.00p -4.19% PayPoint (PAY) 670.00p -4.01% Oxford Instruments (OXIG) 1,828.00p -3.99% Aston Martin Lagonda Global Holdings (AML) 75.70p -3.77%