London close: Stocks turn red on return from Easter break

(Sharecast News) - UK stocks experienced a downturn by the end of trading on Tuesday, as investors resumed activity following the extended weekend, with initial gains reversed by the close ahead of a week marked by a number of key economic data releases.

The FTSE 100 ended the day down 0.22% at 7,935.09, while the FTSE 250 fell 0.86% to finish at 19,713.89.

In currency markets, sterling was last up 0.16% on the dollar to trade at $1.2572, while it declined 0.05% against the euro, changing hands at €1.1677.

"The UK stock market continued where it left off before the Easter break and briefly made a new 14-month high above the 8,000 mark despite disappointing UK house price data before ending the day flat," said IG senior market analyst Axel Rudolph.

"Other European stock indices were trading lower, in line with their US counterparts, despite German inflation dropping to a near three-year low and euro area inflation expectations hitting a two-year low.

"Monday's stronger-than-expected US ISM factory activity and a rebound in new orders for manufacturing goods in Europe and the US led to US yields nearing three-month highs."

Rudolph said they did so amid worries that inflation could return, provoking a sell-off in equities following their strong first-quarter rally.

"While the gold price hit a new record high on Tuesday, with the silver price playing catch up and nearing its December and March peaks, the oil price remains on track for its fourth straight day of gains amid heightened geopolitical tensions in the Middle East."

Manufacturing sector expands, house price growth slows

In economic news, the UK manufacturing sector saw a welcome expansion last month, marking the first growth since July 2022.

According to a closely-followed survey by S&P Global, the purchasing managers' index (PMI) for the manufacturing sector climbed from 47.5 in February to 50.3 in March.

The uptick, surpassing economists' expectations of a stagnant reading at 49.9, signified a shift towards growth.

While subindices such as new orders and output showed improvement, concerns lingered as employment and stocks of purchases continued to decline, albeit at slower rates compared to the previous month.

"Potential blockers remain such as continued weak export performance and supply chain stresses, with the neighbouring EU market the main drag on overseas demand and the Red Sea crisis still impacting supply chains," said S&P Global Market Intelligence director Rob Dobson.

"Signs from the survey that the impact of both of these factors is easing is therefore welcome news."

In contrast, the UK housing market experienced an unexpected slowdown in house price inflation.

According to data from lender Nationwide, house prices recorded a slight month-on-month decrease of 0.2% in March, following a 0.7% increase in February.

On an annual basis, prices rose 1.6%, falling short of the consensus forecast of 2.4%.

Regional disparities were evident, with Northern Ireland leading in price gains while the South West witnessed a decline.

"The small fall in the Nationwide house price index in March follows two strong months, so it's just a blip," said Pantheon Macroeconomics chief UK economist Rob Wood.

"We continue to expect house prices to rise 4% year-over-year in 2024, broadly in line with the current trend pace of increase in the main house price indices but a little weaker than the rise in nominal wages we expect as affordability is stretched."

On the continent, eurozone manufacturing activity faced headwinds in March as demand dwindled.

The final HCOB eurozone manufacturing PMI slipped to 46.1 from February's 46.5, indicating contraction for the month.

Despite that, there was a slight uptick in the PMI output index, hinting at a modest improvement in output levels.

Across the Atlantic, the US labour market showed signs of stability, with job openings remaining largely unchanged in February.

According to the Department of Labor, the number of job openings increased marginally by 0.1% from the prior month to reach 8.756 million.

Hiring also saw a modest uptick, while the quits rate and total separations remained relatively stable.

Commodities lift miners and oil plays, consumer stocks slip

On London's equity markets, mining and oil stocks were buoyed by an uptick in commodity prices.

Fresnillo led the risers with a gain of 7.58%, followed by Anglo American, up 4.6%; Rio Tinto, ahead 1.99%; Glencore, which added 3.01%; BP, advancing 2.74%; Antofagasta, which grew 1.32%; and Shell, which closed 3.22% firmer.

Elsewhere, HSBC Holdings saw a modest rise of 0.39% after completing the sale of its Canadian banking operations to RBC.

The move was expected to unlock significant value, with the company expecting to recognize a gain on sale of $4.9bn in the first quarter of 2024.

On the downside, consumer goods companies faced headwinds, with Reckitt Benckiser Group down 4.15%, Coca-Cola HBC off 2.2%, and Ocado Group closing 4.22% weaker.

Housebuilders also struggled, with Persimmon off 3.5% and Taylor Wimpey losing 3.06%, and builders' merchant CRH sliding 2.4% on the back of the weak housing price data.

Real estate developers Land Securities Group, Segro, Hammerson and Unite Group also found themselves in the red, losing 0.33%, 0.35%, 3.53% and 3.27%, respectively.

Biopharma giant AstraZeneca slipped 0.69% despite receiving approval from US regulators for its Voydeva drug.

Meanwhile, Ithaca Energy slumped 7.97% following last week's reports of potential tie-ups with Italy's Eni and disappointing annual profits blamed on government energy taxes.

Additionally, Mobico Group continued its downward trend, losing 5.39% a week after issuing a profit warning and facing delays in its annual results due to auditing issues.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,935.09 -0.22% FTSE 250 (MCX) 19,713.89 -0.86% techMARK (TASX) 4,478.92 -1.28%

FTSE 100 - Risers

Fresnillo (FRES) 504.00p 7.58% Anglo American (AAL) 2,041.50p 4.60% Shell (SHEL) 2,717.00p 3.50% Glencore (GLEN) 448.40p 3.01% BP (BP.) 508.60p 2.60% Convatec Group (CTEC) 293.40p 2.44% Rio Tinto (RIO) 5,117.00p 1.99% Antofagasta (ANTO) 2,066.00p 1.32% United Utilities Group (UU.) 1,041.00p 1.17% Beazley (BEZ) 673.00p 1.13%

FTSE 100 - Fallers

Reckitt Benckiser Group (RKT) 4,275.00p -5.25% Entain (ENT) 757.60p -4.99% Ocado Group (OCDO) 435.90p -4.22% Persimmon (PSN) 1,270.00p -3.50% Burberry Group (BRBY) 1,171.50p -3.42% Unite Group (UTG) 946.00p -3.27% M&G (MNG) 213.30p -3.27% Bunzl (BNZL) 2,950.00p -3.22% Land Securities Group (LAND) 637.50p -3.14% Scottish Mortgage Inv Trust (SMT) 867.60p -3.13%

FTSE 250 - Risers

AO World (AO.) 104.20p 3.37% Kainos Group (KNOS) 994.00p 2.95% TI Fluid Systems (TIFS) 148.20p 2.92% Fidelity China Special Situations (FCSS) 206.50p 2.74% Dr. Martens (DOCS) 90.05p 2.62% Petershill Partners (PHLL) 194.00p 2.54% Renishaw (RSW) 4,350.00p 2.35% Bakkavor Group (BAKK) 110.50p 2.31% BlackRock World Mining Trust (BRWM) 529.00p 2.13% Diversified Energy Company (DEC) 967.50p 2.06%

FTSE 250 - Fallers

Ithaca Energy (ITH) 122.40p -7.97% Mobico Group (MCG) 64.50p -7.33% Tritax Eurobox (GBP) (EBOX) 50.90p -6.26% Carnival (CCL) 1,102.50p -5.73% Watches of Switzerland Group (WOSG) 340.80p -4.96% Aston Martin Lagonda Global Holdings (AML) 161.80p -4.77% Trustpilot Group (TRST) 189.40p -4.73% Marshalls (MSLH) 263.00p -4.29% Oxford Instruments (OXIG) 2,040.00p -4.00% Close Brothers Group (CBG) 402.20p -3.83%