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LONDON MARKET CLOSE: Mixed US start hits FTSE 100 but FTSE 250 rallies

5th Jul 2024 16:53

(Alliance News) - London's FTSE 100 succumbed to an underwhelming start on Wall Street, surrendering earlier post-UK election gains, though the FTSE 250 hung on to close solidly higher.

Stocks in New York opened mixed after a stronger-than-expected US jobs report, though the pace of hiring did slow on-month.

The FTSE 100 index closed down 37.33 points, or 0.5%, at 8,203.93. The FTSE 250 ended up 176.31 points, or 0.9%, at 20,786.65, while the AIM All-Share closed up 4.97 points, or 0.7%, at 774.39.

For the week, the FTSE 100 added 0.5%, the FTSE 250 climbed 2.5% and the AIM rose 1.3%.

The Cboe UK 100 ended down 0.5% on Friday at 815.61, the Cboe UK 250 closed up 1.0% at 18,107.65, and the Cboe Small Companies ended up 0.2% at 17,030.40.

In European equities on Friday, the CAC 40 in Paris ended down 0.3%, though the DAX 40 in Frankfurt ended up 0.1%.

In New York, the Dow Jones Industrial Average was down 0.1% at the time of the closing bell in Europe. The S&P 500 was up 0.2%, while the Nasdaq Composite shot up 0.6%.

In London, it was stocks more vulnerable to the ebbs and flows of the global economy that struggled, but those with a greater UK exposure, such as housebuilders, shone.

Asia-focused lender HSBC fell 2.6%, while insurer Prudential declined 1.6%. Also falling were miner Rio Tinto and oil major Shell, down 1.9% and 1.3%.

On the up, however, housebuilders Vistry and Barratt both added 3.4%. Estate agent Savills climbed 7.5%, while infrastructure company Kier shot up 6.8%. Utility firms United Utilities and Severn Trent also rose, climbing 3.5% and 3.1%.

The UK's new Prime Minister Keir Starmer promised to rebuild trust in politics and restore hope to the nation after a landslide Labour victory in the UK general election.

In his first speech in Downing Street, Starmer said the British people had voted "decisively for change".

Starmer said the country could "move forward together" as Labour took office following 14 years of Conservative rule.

He said: "Now our country has voted decisively for change, for national renewal and a return of politics to public service."

Starmer's cabinet is beginning to take shape. Rachel Reeves was confirmed as Britain's first woman chancellor, Angela Rayner is deputy prime minister and retained the levelling up, housing & communities brief, and Yvette Cooper is home secretary.

David Lammy was appointed foreign secretary, putting to bed some speculation over whether he would get the post he shadowed in opposition.

The pound was quoted at USD1.2806 late on Friday afternoon in London, higher compared to USD1.2765 at the time of the equities close on Thursday. The euro stood at USD1.0828, up against USD1.0812. Against the yen, the dollar was trading at JPY160.70, lower compared to JPY161.16.

US nonfarm payrolls were higher than expected last month, numbers showed.

The US economy added 206,000 jobs in June, easing from 272,000 in May, but outperforming the FXStreet-cited consensus of 190,000.

"Jobs growth is cooling, particularly in the private sector and the unemployment rate has now broken above 4%, which is helping to keep wages in check. With inflation also looking better behaved the chances of a September interest rate cut from the Federal Reserve continues to build," analysts at ING commented.

Brent oil was quoted at USD87.85 a barrel late in London on Friday afternoon, up from USD87.44 late Thursday. Gold was quoted at USD2,385.01 an ounce, higher against USD2,358.90.

Back in London, Crest Nicholson rose 2.2%. It spurned fresh deal-making interest a month after rejecting a possible offer from rival housebuilder Bellway.

Responding to media speculation, the Surrey-based company said it has received unsolicited, preliminary, indicative proposals from Avant Homes regarding a possible all-share combination.

Avant – an affordable housebuilder focused on the Midlands, the North of England, and Scotland – is backed by US investment firm Elliott Advisors.

Crest said the most recent proposal was an all-share acquisition by Crest Nicholson of Avant in consideration for the issue of Crest Nicholson shares to Avant.

Crest Nicholson would retain its listing on the main market of the London Stock Exchange.

The proposal would have seen Avant own 30% of the enlarged group.

"None of the proposals from Avant involved a possible takeover offer by Avant for Crest Nicholson," the company said in a statement.

PipeHawk plummeted 75%, after it said that due to "severe financial pressure", it is taking steps to potentially place its subsidiary QM Systems into administration.

In late March, when it published its half-year results, PipeHawk said that QM was experiencing a number of challenges. But, it hoped it would receive "two material orders".

On Friday, however, PipeHawk said that the orders "will not be forthcoming."

Monday's economic calendar has a German trade balance reading at 0700 BST.

The UK corporate calendar has annual results from legal and professional services firm Knights Group Holdings. Student accommodation provider Unite Group issues a trading statement.

By Eric Cunha, Alliance News news editor

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