London close: Stocks fall as investors mull ECB, US GDP; StanChart tumbles

(Sharecast News) - London stocks ended firmly in the red on Thursday as investors mulled the latest US growth figures and a rate decision by the European Central Bank, with Standard Chartered under the cosh after third-quarter results. The FTSE 100 closed down 0.8% at 7,354.57.

CMC Markets analyst Michael Hewson said: "The prospect of higher rates for longer, along with earnings downgrades appears to be finally taking its toll on equity markets on both sides of the Atlantic, with another negative session for European markets."

Investors were mulling the latest policy announcement from the ECB, which left interest rates on hold, as widely expected, after 10 consecutive hikes.

The Bank left its key deposit and refinancing rates unchanged at 4.00% and 4.50%, respectively, in line with consensus expectations. The marginal lending facility rate was also left on hold, at 4.75%, as expected.

Market participants also digested hotter-than-expected US growth figures, which showed that the economy grew 4.9% on the year between July and September.

Danni Hewson, head of financial analysis at AJ Bell, said the US GDP data raised "the spectre that the Fed might not be done with its rate hikes".

"It's an odd sort of quandary as a confident consumer, buoyed by a remarkably robust jobs market, helped deliver growth at the fastest pace in nearly two years," she said.

On home shores, the latest survey from the Confederation of British Industry showed that retail sales volumes tumbled in October, as higher interest rates and cost of living pressures continued to weigh heavily.

According to the Distributive Trades Survey, the retail sales balance fell to -36 from -14 in the year to September, the sixth consecutive monthly fall.

It was also the worst October reading since 2017, which at the time was the lowest since records began in 1983.

Sales volumes were also judged to be poor for the time of year, at -10, with a balance of 27 reported stocks as being too high relative to expected sales.

Internet sales also struggled, as volumes plunged to -78 from -3 a month previously. It was the fastest pace of decline since the question was added to the monthly survey in August 2009.

Martin Sartorius, principal economist at the CBI, said: "As the festive period approaches, the retail sector remains in a perilous position.

"Sales volumes have been falling year-on-year for six months in a row, as cost of living pressures and higher interest rates weigh on consumer spending.

"Retailers expect the downturn in sales to continue next month, albeit at a slower pace. While slowing inflation should help to bolster households' income in the coming months, retailers will continue to face headwinds from higher energy and borrowing costs."

In equity markets, Standard Chartered tumbled after it posted a drop in third-quarter pre-tax profit, as it took a hit from its exposure to the Chinese property and banking sectors. In the three months to the end of September, pre-tax profit fell to $633m from $1.4bn a year earlier. Analysts were expecting pre-tax profit of $1.44bn.

The bank said credit impairment charges in the quarter were $294m, up $62m on the same period a year earlier, and $186m of which related to the Chinese commercial real estate sector.

StanChart said it reduced the carrying value of its investment in China Bohai Bank by $697m. This reflected subdued earnings and a challenging macroeconomic outlook, it said.

Richard Hunter, head of markets at Interactive Investor, said: "China remains both a blessing and a curse for Standard, with the country's faltering economic recovery weighing heavily on these results.

"The currently parlous state of developments in China are an inevitable concern, although Standard is adequately capitalised to withstand such challenges.

"Indeed, in the medium and longer-term the Chinese economy should provide some significant opportunities, and in a region where the bank has a well-established and trusted presence. Despite any disappointment which this latest update has delivered, the market consensus of the shares as a cautious buy encapsulates both current challenges and future prospects."

Unilever was also in the red as the consumer goods giant laid out plans to boost growth and posted a dip in third-quarter revenues.

WPP fell after it cut its full-year guidance as technology clients continued to curtail spending. The advertising firm, the world's largest, reported a 5% fall in third-quarter net revenues, to £2.84m. On an underlying basis, revenues fell 0.6%.

The blue chip also more than halved its forecast for annual net revenue to between 0.5% and 1%, from previous guidance for between 1.5% and 3%.

Market Movers

FTSE 100 (UKX) 7,354.57 -0.81% FTSE 250 (MCX) 16,783.09 -0.52% techMARK (TASX) 3,963.12 -1.25%

FTSE 100 - Risers

Ocado Group (OCDO) 487.10p 5.89% Croda International (CRDA) 4,217.00p 1.84% International Consolidated Airlines Group SA (CDI) (IAG) 142.85p 1.78% M&G (MNG) 195.70p 1.77% Compass Group (CPG) 2,075.00p 1.42% Severn Trent (SVT) 2,606.00p 1.28% Vodafone Group (VOD) 74.81p 1.23% Smith (DS) (SMDS) 272.20p 1.15% National Grid (NG.) 987.60p 1.15% Berkeley Group Holdings (The) (BKG) 4,001.00p 1.11%

FTSE 100 - Fallers

Standard Chartered (STAN) 625.20p -12.44% Rentokil Initial (RTO) 406.40p -10.60% B&M European Value Retail S.A. (DI) (BME) 526.00p -4.99% Endeavour Mining (EDV) 1,659.00p -3.79% Intertek Group (ITRK) 3,871.00p -2.96% Unilever (ULVR) 3,900.00p -2.83% Flutter Entertainment (CDI) (FLTR) 12,560.00p -2.75% Hikma Pharmaceuticals (HIK) 1,912.50p -2.57% Airtel Africa (AAF) 110.20p -2.48% Haleon (HLN) 326.85p -2.30%

FTSE 250 - Risers

NextEnergy Solar Fund Limited Red (NESF) 82.90p 4.94% CAB Payments Holdings (CABP) 51.57p 4.00% Inchcape (INCH) 670.50p 3.95% W.A.G Payment Solutions (WPS) 95.00p 3.26% Supermarket Income Reit (SUPR) 72.50p 3.13% Ferrexpo (FXPO) 77.90p 2.97% Greencoat UK Wind (UKW) 133.80p 2.69% Close Brothers Group (CBG) 750.50p 2.25% The Renewables Infrastructure Group Limited (TRIG) 101.60p 2.21% Darktrace (DARK) 347.30p 2.00%

FTSE 250 - Fallers

VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 427.00p -5.22% Genus (GNS) 2,068.00p -5.14% IP Group (IPO) 43.70p -5.00% PureTech Health (PRTC) 155.40p -4.78% Digital 9 Infrastructure NPV (DGI9) 36.50p -4.07% Vietnam Enterprise Investments (DI) (VEIL) 521.00p -4.05% PZ Cussons (PZC) 125.60p -3.98% Helios Towers (HTWS) 59.00p -3.91% Hammerson (HMSO) 20.90p -3.86% Me Group International (MEGP) 138.00p -3.63%