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London midday: Stocks fall after 'mixed messages' from central banks

(Sharecast News) - London stocks had fallen into the red by midday on Friday as investors continued to mull this week's slew of central bank policy announcements. The FTSE 100 was down 0.5% at 7,608.84.

Russ Mould, investment director at AJ Bell, highlighted "mixed messages" from central banks this week. "The market might be left feeling as if it has stepped through the looking glass," he said.

"The Federal Reserve, despite a resilient US economy, is happy to talk rate cuts while the Bank of England and the European Central Bank, who face a much less rosy economic backdrop, are pouring cold water on hopes for a pivot.

"Perhaps the Bank of England and ECB remain concerned about energy prices and any possible inflationary pressures they might bring with winter upon us. America's relative energy independence largely insulates it from this threat."

Investors were also mulling a survey out earlier, which showed that business activity rose to a six-month high in December.

The S&P Global/CIPS flash UK composite output index - which measures activity in the manufacturing and services sectors - ticked up to 51.7 from 50.7 in November. This was above consensus expectations for a reading of 51.0.

A reading above 50.0 indicates expansion, while a level below signals contraction.

The flash services purchasing managers' business activity index rose to 52.7 in December from 50.9 in December, also a six-month high.

The manufacturing output index printed at 45.9, versus 49.2 in November and the manufacturing PMI was 46.4 in December, down from 47.2.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The UK economy continues to dodge recession, with growth picking up some momentum at the end of the year to suggest that GDP stagnated over the fourth quarter as a whole. While employment meanwhile fell for a fourth month, the decline was only marginal and not indicative of any material rise in unemployment.

"This is, however, a dual-speed economy, with manufacturing contracting sharply while services regained some poise, the latter growing faster in December thanks in part to financial services activity being buoyed by hopes of lower interest rates in 2024."

Also in focus was the latest survey from GfK, which showed that consumer confidence edged higher in December as people became more optimistic for the year ahead.

The consumer confidence index, which has been running since 1974, rose two points this month to -22.

Within that, all five measures showed modest improvement. The personal finance situation for the coming year ticked up 1 point at -2, while the outlook for the general economic situation also improved by 1 point, to -25.

The major purchase index rose one point to -23.

Joe Staton, client strategy director at GfK, said: "Against the backdrop of flattening economic growth, interest rates at a 15-year high and price rises potentially eroding disposable income for years to come, the index shows a modest improvement this month.

"Although the headline figure of -22 means the nation's confidence is still firmly in negative territory, optimism for our personal finances for the next 12 months shows a notable recovery from the depressed -29 this time last year.

"Recovery in this number is important, as it best reflects household financial optimism and control over personal budgets."

In equity markets, St James's Place slumped as it emerged it is considering raising up to £1bn by the end of the decade to help support succession plans. The wealth management firm told the Financial Times it wanted to use the funds to buy up the businesses of retiring partners. The blue chip's 914,000 clients are spread across SJP's network of 2,622 partner firms.

Going the other way, paper and packaging group DS Smith rallied. The shares were upgraded by Bank of America Merrill Lynch, according to traders.

Trainline surged after the government scrapped plans to develop a ticketing website and app under its Great British Railways proposals. JPMorgan said the news was a "clear positive" for the booking platform.

"The proposed withdrawal removes a key overhang to Trainline's investment case, where building investor concerns have been around changes in UK rail regulation (a new GBR app) which drove a de-rating relative to classified peers, and overshadowed strong passenger momentum and improved operational delivery, in our view," the bank said.

Market Movers

FTSE 100 (UKX) 7,608.84 -0.52% FTSE 250 (MCX) 19,307.29 0.26% techMARK (TASX) 4,187.65 -0.37%

FTSE 100 - Risers

Smith (DS) (SMDS) 314.60p 4.07% Glencore (GLEN) 468.75p 3.31% Anglo American (AAL) 1,850.00p 3.04% Airtel Africa (AAF) 122.30p 1.49% Scottish Mortgage Inv Trust (SMT) 786.80p 1.39% Rio Tinto (RIO) 5,731.00p 1.38% Berkeley Group Holdings (The) (BKG) 4,876.00p 1.37% Mondi (MNDI) 1,532.00p 1.29% Land Securities Group (LAND) 716.80p 1.21% Antofagasta (ANTO) 1,651.00p 1.20%

FTSE 100 - Fallers

St James's Place (STJ) 678.00p -4.64% Smith & Nephew (SN.) 1,051.00p -2.87% Auto Trader Group (AUTO) 710.80p -2.71% AstraZeneca (AZN) 10,214.00p -2.43% GSK (GSK) 1,433.20p -1.96% British American Tobacco (BATS) 2,317.50p -1.84% Rolls-Royce Holdings (RR.) 294.60p -1.80% Croda International (CRDA) 5,044.00p -1.71% Burberry Group (BRBY) 1,542.50p -1.69% Rightmove (RMV) 565.40p -1.67%

FTSE 250 - Risers

Trainline (TRN) 326.00p 14.71% Wood Group (John) (WG.) 158.90p 3.86% C&C Group (CDI) (CCR) 144.80p 3.28% Bank of Georgia Group (BGEO) 3,575.00p 3.17% Aston Martin Lagonda Global Holdings (AML) 211.80p 3.12% Syncona Limited NPV (SYNC) 121.60p 3.05% Ferrexpo (FXPO) 76.35p 2.97% Wetherspoon (J.D.) (JDW) 787.50p 2.94% Mitchells & Butlers (MAB) 247.00p 2.92% RHI Magnesita N.V. (DI) (RHIM) 3,464.00p 2.91%

FTSE 250 - Fallers

Indivior (INDV) 1,196.00p -2.76% Helios Towers (HTWS) 73.60p -2.13% TUI AG Reg Shs (DI) (TUI) 608.50p -2.01% Digital 9 Infrastructure NPV (DGI9) 28.55p -1.89% Darktrace (DARK) 361.80p -1.79% Energean (ENOG) 967.50p -1.78% Apax Global Alpha Limited (APAX) 155.80p -1.77% Moneysupermarket.com Group (MONY) 267.80p -1.69% Babcock International Group (BAB) 391.60p -1.51% Big Yellow Group (BYG) 1,208.00p -1.47%

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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