London close: Stocks finish lower amid massive Heathrow disruption

(Sharecast News) - London stocks ended lower on Friday, pressured by weak airline performance amid an all-day closure at Heathrow Airport, as well as disappointing public finance figures. The FTSE 100 index fell 0.63% to close at 8,646.79 points, while the more domestically-focussed FTSE 250 declined 0.93% to 19,911.50 points.

In currency markets, sterling was last down 0.3% on the dollar to trade at $1.2928, as it weakened 0.03% against the euro, changing hands at €1.1943.

"After a week in which hopes of rebound for battered US stocks predominated, US stocks have turned firmly lower in the final session of the week," said IG chief market analyst Chris Beauchamp.

"The big worry for investors is that the US economy, far from firing on all cylinders, is facing major headwinds, and FedEx's warning today provides a more granular look at the economy that reinforces those fears."

Beauchamp noted that European markets had been the winners this year compared to an embattled Wall Street.

"If US markets see another big move lower then the FTSE 100, DAX and others will not remain immune.

"Volatility is resurgent this afternoon, a potential harbinger of more to come."

UK government borrowing tops forecasts, consumer confidence improves

In economic news, UK government borrowing in February far exceeded expectations, raising concerns over the state of public finances ahead of next week's Spring Statement.

Official figures showed the government borrowed £10.7bn during the month, £100m more than a year earlier and well above both the Office for Budget Responsibility's £6.5bn forecast and economists' £7bn consensus.

It marked the fourth-highest February borrowing figure on record.

Cumulatively, borrowing for the financial year to date reached £132.2bn, an increase of £14.7bn from the same period a year ago.

"Ultimately, today's release will have no influence on how much the Chancellor needs to tighten fiscal policy at next week's fiscal update," said Alex Kerr, UK economist at Capital Economics.

"Higher gilt yields and the weaker economy have probably wiped out the Chancellor's headroom of £9.9bn.

"And in order to restore that buffer, on top of the £5.0bn of welfare cuts already announced, we think she will cut non-defence departmental spending by around £6.5bn."

Consumer confidence meanwhile showed a slight improvement in March, but remained subdued by historical standards.

GfK's monthly index edged up by one point to -19.0, beating expectations but still well below the long-term average of -10.0.

Optimism about the broader economy picked up modestly, while views on personal finances deteriorated.

The subindex tracking sentiment on major purchases was unchanged, highlighting ongoing caution among households.

Neil Bellamy, consumer insights director at NIQ GFK, called attention to the fact that the latest reading was "more positive" than those of -40 or less registered as recently as early 2023 on account of the cost-of-living crisis.

"If consumer confidence were a patient languishing in a hospital bed, a doctor would say there is little evidence of a recovery as yet," Bellamy added.

"Where do we go from here? The current stability is to be welcomed but it won't take much to upset the fragile consumer mood."

Separately, air travel faced major disruption after a fire at a power substation in west London caused a significant outage at Heathrow Airport overnight.

More than 1,300 flights were affected globally, with operations partially resuming late Friday.

Heathrow said its focus was on repatriating passengers and relocating diverted aircraft, but advised travellers to stay away unless specifically directed by their airline.

Power was restored earlier in the day after the fire, which broke out late Thursday, was brought under control by firefighters by 0800 GMT Friday.

The outage prompted criticism from the airline industry, with IATA accusing Heathrow of poor planning and failing to ensure a backup power supply.

Director general Willie Walsh called it "yet another case of Heathrow letting down both travellers and airlines", and questioned how such a critical hub could rely on a single power source.

UK authorities said there was no indication of foul play, though counter-terrorism police were involved due to the infrastructure's strategic importance.

Airline and hospitality stocks dented by Heathrow closure, Asos soars

On London's equity markets, airline and hospitality stocks were under pressure following the travel disruptions at Heathrow.

British Airways and Iberia owner International Consolidated Airlines Group fell 2.86%, while easyJet shed 0.86%.

Hotel operator InterContinental Hotels Group also declined 2.85%.

JD Sports Fashion dropped 5.09% after a weak update from US sportswear giant Nike, which weighed on sentiment across the sector.

Pub operator JD Wetherspoon plunged 9.38% despite reinstating its interim dividend, as the company warned that rising labour costs would add £60m annually to expenses, equating to £1,500 per week per pub.

Ferrexpo tumbled 10.83% after Ukrainian tax authorities suspended VAT refunds to two of its subsidiaries, citing sanctions against a major shareholder.

The iron ore miner said the decision would strain liquidity, prompting production cuts and broader economic impacts in Ukraine.

On the upside, Asos soared 21.39% after raising its profit guidance for the first half, while Crest Nicholson climbed 2.58% following an upgrade to 'outperform' at RBC.

Energean rose 3.68% after scrapping a $945m asset sale due to regulatory delays, a move seen as preserving value.

British Land gained 0.93% after receiving approval to redevelop the Euston Tower into a sustainable mixed-use site.

Supermarket operator J Sainsbury edged up 0.25% following an upgrade to 'buy' from HSBC.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,646.79 -0.63% FTSE 250 (MCX) 19,911.50 -0.93% techMARK (TASX) 4,707.41 -1.17%

FTSE 100 - Risers

Vodafone Group (VOD) 75.34p 1.21% British Land Company (BLND) 369.60p 0.93% LondonMetric Property (LMP) 181.10p 0.84% BT Group (BT.A) 164.35p 0.70% Compass Group (CPG) 2,424.00p 0.66% 3i Group (III) 3,713.00p 0.65% Relx plc (REL) 3,874.00p 0.65% HSBC Holdings (HSBA) 881.60p 0.63% Coca-Cola HBC AG (CDI) (CCH) 3,480.00p 0.52% Rolls-Royce Holdings (RR.) 800.60p 0.50%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 75.76p -5.09% Croda International (CRDA) 2,889.00p -4.87% Antofagasta (ANTO) 1,817.50p -4.82% CRH (CDI) (CRH) 7,250.00p -4.50% Glencore (GLEN) 299.20p -3.48% Anglo American (AAL) 2,255.00p -3.07% Mondi (MNDI) 1,209.50p -2.93% BAE Systems (BA.) 1,595.50p -2.92% Diploma (DPLM) 3,934.00p -2.86% Smurfit Westrock (DI) (SWR) 3,436.00p -2.47%

FTSE 250 - Risers

Bakkavor Group (BAKK) 171.50p 5.86% Energean (ENOG) 872.50p 3.68% Crest Nicholson Holdings (CRST) 167.00p 2.58% Oxford Nanopore Technologies (ONT) 111.50p 1.73% Harbour Energy (HBR) 204.60p 1.54% Discoverie Group (DSCV) 596.00p 1.37% Ninety One (N91) 152.40p 1.33% Empiric Student Property (ESP) 83.00p 1.22% Drax Group (DRX) 588.00p 1.20% Grainger (GRI) 207.00p 0.98%

FTSE 250 - Fallers

Wood Group (John) (WG.) 38.40p -13.08% Ferrexpo (FXPO) 65.00p -10.83% Wetherspoon (J.D.) (JDW) 541.00p -9.38% Raspberry PI Holdings (RPI) 511.50p -8.50% FirstGroup (FGP) 168.70p -7.31% Essentra (ESNT) 104.00p -5.63% Trustpilot Group (TRST) 230.50p -4.75% Syncona Limited NPV (SYNC) 88.90p -4.72% Caledonia Investments (CLDN) 3,670.00p -4.05% GCP Infrastructure Investments Ltd (GCP) 74.10p -3.89%