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LONDON MARKET CLOSE: Renewed global tensions put pressure on stocks

25th Mar 2024 16:51

(Alliance News) - Stock prices in London started the week in bad shape and closed lower on Monday, as investors sat on their hands amid rising global tensions.

The FTSE 100 index closed down 13.35 points, 0.2%, at 7,917.57. The FTSE 250 ended down 110.79 points, 0.6%, at 19,613.53, and the AIM All-Share closed down 2.26 points, 0.3%, at 737.26.

The Cboe UK 100 ended down 0.2% at 791.89, the Cboe UK 250 closed down 0.5% at 17,033.39, and the Cboe Small Companies ended flat at 14,615.36.

In European equities on Monday, the CAC 40 in Paris ended up 0.1%, while the DAX 40 in Frankfurt ended up 0.3%.

"Heightened tensions between Ukraine and Russia have brought a halt to the rally in equity markets seen last week," says Russ Mould, investment director at AJ Bell.

Ongoing tensions saw oil prices rise. Brent oil was quoted at USD86.06 a barrel at the London equities close Monday from USD85.52 late Friday.

Mould explained: "The commodity price has been strengthening amid concerns about tighter global supplies and a falling US rig count which implies less exploration and production activity."

On the back of higher oil prices, BP and Shell got a boost and closed up 1.4% and 0.7%, respectively.

Eyes have also been on the fallout of certain interest rate decisions made last week.

Last week, the US Federal Reserve last week left rates unmoved, but a set of projections which accompanied its decision suggested three cuts are still in the offing this year.

The Bank of England also left its benchmark rate unmoved, but there is a growing conviction it will cut them soon.

This week, markets are awaiting the core personal consumer expenditure price index for February, which is the Fed's preferred inflation reading. It is due out on Friday.

According to FXStreet, the core PCE index is expected to unchanged annually at 2.8%. On a monthly basis, the reading is expected to ebb slightly to 0.3% in February, from 0.4% in January.

"If the analysts are correct, then this could be enough for the Fed to continue its current message that rate cuts are coming," said Kathleen Brooks at XTB.

Stocks in New York were lower at the London equities close, with the DJIA down 0.3%, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.1%.

The pound was quoted at USD1.2643 at the London equities close Monday, up compared to USD1.2627 at the close on Friday. The euro stood at USD1.0838 at the European equities close Monday, higher against USD1.0829 at the same time on Friday.

Against the yen, the dollar was trading at JPY151.41, down compared to JPY151.46 late Friday.

In the FTSE 100, Kingfisher rose 2.6% to the top of the index.

In the year to December 31, the company, which owns B&Q and Screwfix, reported statutory pretax profit of GBP475 million, down 22%, from GBP611 million. On an adjusted basis pretax profit fell 25% to GBP568 million from GBP758 million.

In the current financial year, Kingfisher expects adjusted pretax profit to fall further to a range of GBP490 million to GBP550 million.

Looking further ahead, Kingfisher struck a more optimistic tone, believing itself to be "strongly positioned for growth in 2025 and beyond."

In the FTSE 250, Ferrexpo edged up 7.8%.

It said its Ferrexpo Poltava Mining operation has not suffered any disruption in the face of legal proceedings.

Furthermore, the iron ore pellet producer said production volumes for February were the highest since the beginning of Russia's invasion of Ukraine in 2022.

Direct Line shed 12%, after Ageas late on Friday withdrew its bid interest for the motor and home financial services group.

Belgian insurer Ageas had made two proposals to buy Direct Line, but its advances were rejected.

Amongst London's small-caps, Tullow Oil jumped 11%.

Bank of America 'double-upgraded' Tullow Oil to 'buy' from 'underperform'.

The investment bank said it expects shares in Tullow Oil to benefit from improved cash flow as past infrastructure investments pay off.

On AIM, Orosur Mining surged 50%.

The minerals explorer and developer said it has signed a letter of intent in its first step in resuming full ownership of the Anza project.

Chief Executive Brad George said: "After such a long period in abeyance, we are excited at the prospect of reassuming ownership and control of Anza at this time of buoyant gold prices and heightened market interest in precious metals. Most importantly, the structure of the Transaction whereby all consideration is deferred and contingent upon production allows us to immediately direct our resources into the ground."

Gold was quoted at USD2,176.03 an ounce at the London equities close Monday, up against USD2,173.50 at the close on Friday.

In Tuesday's UK corporate calendar, there are full year results from AG Bar and Flutter Entertainment. There are also half year results from Bellway.

The economic calendar for Tuesday has a German consumer confidence reading at 0700 GMT. At 1230 GMT, there is a US durable goods order reading, followed by the US house price index half an hour later.

By Sophie Rose, Alliance News senior reporter

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