London close: Stocks mixed with tariffs, corporate updates in focus
London stocks ended Thursday on a mixed note, with the top-flight index in the red as weak corporate earnings and ex-dividend trading weighed.
The FTSE 100 closed down 0.83% at 8,682.84 points, while the FTSE 250 managed a modest gain of 0.16% to close at 20,159.07.
In currency markets, the dollar was last down 0.01% on sterling to trade at $1.2894, while it slipped 0.3% against the euro, changing hands at €1.1917.
“Shares in London fell on Thursday as rising bond yields weighed on equities, while uncertainty over US tariffs clouded the global market outlook,” noted TickMill market strategy partner Patrick Munnelly, who noted that banking stocks led the decline after gaining the previous day.
“UK gilt yields continued to rise amid a global bond selloff, driven by Germany's plans to relax fiscal spending rules.
“Both 10-year and two-year yields reached their highest levels since January, adding pressure on rate-sensitive stocks.”
Munnelly said trade tensions remained a key concern, as US president Donald Trump announced a one-month tariff exemption for the auto sector involving Canada and Mexico on Wednesday.
“Meanwhile, the UK construction sector experienced a sharp downturn last month.
“The preliminary S&P Global/CIPS UK construction purchasing managers' index fell to 44.6 in February from 48.1 in January, marking its lowest point since May 2020 and falling short of economists' expectations in a Reuters poll.
“Despite this contraction, the construction and materials sector ended the day flat.”
UK, EU construction sectors contract
In economic news, the UK construction sector contracted sharply in February, reaching its lowest level in nearly five years, according to survey data released Thursday.
The S&P Global construction purchasing managers’ index fell to 44.6 from 48.1 in January, marking a second consecutive month of decline and the weakest reading since May 2020.
Residential building remained the worst-performing segment, with its index dropping to 39.3 as weak demand, high borrowing costs, and a lack of new projects weighed on activity.
Civil engineering also recorded a steep decline, while commercial construction fared slightly better, though still contracting with a reading of 49.0.
“Sharply declining order books rippled through the UK construction sector in February, which led to accelerated reductions in output volumes, employment and input buying,” said Tim Moore, economics director at S&P Global Market Intelligence.
“Weak demand conditions were attributed to entrenched caution among clients, against a backdrop of subdued consumer confidence and lacklustre economic performance.
“Aside from the pandemic, total industry activity decreased at the steepest pace since December 2019.”
The downturn was not limited to the UK, as construction activity in the eurozone saw a sharp contraction in February.
The HCOB eurozone construction PMI dropped to 42.7 from 45.4 in January, marking the steepest decline in three months and falling well below expectations.
New orders fell significantly across residential, commercial, and civil engineering projects, with residential construction remaining the weakest segment.
France experienced the fastest decline among the bloc’s three largest economies, which all reported shrinking construction activity.
Retail sales in the eurozone also struggled, with a 0.3% decline in January, according to Eurostat data.
The drop, which followed a flat reading in December, fell short of analyst expectations for a slight increase.
While sales of food, drinks, and tobacco rose by 0.6%, declines in non-food products and automotive fuel offset those gains.
Among major economies, Germany saw a slight 0.1% rise in sales, while France and Italy reported declines of 0.1% and 0.4%, respectively.
On an annual basis, sales volumes in the Eurozone grew 1.5%, below the 1.9% forecast.
Across the Atlantic, jobless claims in the United States declined more than expected last week, remaining at historically low levels.
The number of initial claims fell by 21,000 to 221,000 in the week ended 1 March, defying consensus expectations for an increase to 235,000.
Federal government workers saw a modest rise in first-time claims, but overall, the four-week moving average remained stable at 224,250.
Meanwhile, continuing claims, which measure those still receiving unemployment benefits, increased by 42,000 to 1.897 million.
Elsewhere in the US, the trade deficit widened sharply in January, as businesses rushed to import goods ahead of expected tariff increases.
The trade gap in goods and services expanded by 34% to $131.4bn , exceeding expectations for a $127.4bn shortfall.
Imports surged by 10% to $401.2bn, outpacing a 1.2% rise in exports.
The jump in imports was driven by a $205bn billion rise in finished metal shapes, alongside significant increases in pharmaceutical preparations and computer equipment.
Ex-divs drag on index, Schroders jumps
On London’s equity markets, HSBC Holdings, Rio Tinto, and LondonMetric Property all fell after trading ex-dividend, with HSBC and LondonMetric both shedding 4.51%, while Rio Tinto dropped 2.3%.
Meanwhile, Melrose Industries plunged 18.18% despite reporting full-year profits at the top end of expectations, as supply chain concerns weighed on sentiment.
Rentokil Initial declined 10.77% after full-year profits fell in what the company described as a "challenging" year, particularly in North America.
Spire Healthcare tumbled 16.82% after missing profit forecasts and warning of rising costs from wage and National Insurance increases.
Harbour Energy and Lancashire Holdings also slid following results, with Harbour down 11.5% and Lancashire losing 5.48%.
Entain, the owner of Ladbrokes, reversed earlier gains to end 1.64% lower despite reporting full-year earnings in line with expectations and expressing confidence in its 2025 outlook.
On the upside, Schroders jumped 11.73% after unveiling plans to achieve £150m in annual cost savings alongside its full-year results.
Admiral Group gained 5% after raising its dividend and reporting strong profit growth, driven by a robust performance in its UK motor insurance business.
ITV climbed 8.26% after announcing a rise in full-year profits, supported by record earnings at its production arm, ITV Studios.
Grafton Group advanced 4.88% after posting a full-year adjusted operating profit slightly ahead of expectations, despite a year-on-year decline.
Reckitt Benckiser added 2.08%, reversing earlier losses, as the consumer goods firm announced a divisional reorganisation and signaled potential changes for its Mead Johnson Nutrition business following a mixed 2024.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,682.84 -0.83%
FTSE 250 (MCX) 20,159.07 0.16%
techMARK (TASX) 4,843.35 0.22%
FTSE 100 - Risers
Schroders (SDR) 428.20p 12.62%
Admiral Group (ADM) 3,046.00p 5.00%
WPP (WPP) 629.80p 3.34%
Mondi (MNDI) 1,295.50p 2.82%
Antofagasta (ANTO) 1,863.50p 2.36%
Associated British Foods (ABF) 1,897.00p 2.35%
Anglo American (AAL) 2,462.50p 2.26%
Reckitt Benckiser Group (RKT) 5,294.00p 2.08%
Glencore (GLEN) 327.50p 2.06%
Spirax Group (SPX) 7,415.00p 2.00%
FTSE 100 - Fallers
Melrose Industries (MRO) 556.40p -18.18%
Rentokil Initial (RTO) 346.20p -10.77%
Informa (INF) 779.40p -5.80%
HSBC Holdings (HSBA) 881.00p -5.11%
LondonMetric Property (LMP) 173.50p -4.51%
London Stock Exchange Group (LSEG) 10,935.00p -4.13%
Compass Group (CPG) 2,618.00p -3.86%
Pearson (PSON) 1,290.00p -3.41%
Marks & Spencer Group (MKS) 363.10p -3.32%
InterContinental Hotels Group (IHG) 9,306.00p -2.80%
FTSE 250 - Risers
ITV (ITV) 76.35p 9.70%
RHI Magnesita N.V. (DI) (RHIM) 3,800.00p 9.67%
QinetiQ Group (QQ.) 530.00p 7.37%
Victrex plc (VCT) 1,008.00p 6.98%
Endeavour Mining (EDV) 1,670.00p 4.90%
Grafton Group Ut (CDI) (GFTU) 862.40p 4.88%
Hays (HAS) 77.45p 4.77%
Senior (SNR) 172.00p 4.75%
Bodycote (BOY) 667.00p 4.38%
Computacenter (CCC) 2,406.00p 4.34%
FTSE 250 - Fallers
Spire Healthcare Group (SPI) 188.60p -15.99%
Harbour Energy (HBR) 191.80p -11.50%
Ithaca Energy (ITH) 126.00p -6.67%
Lancashire Holdings Limited (LRE) 587.00p -5.48%
Quilter (QLT) 153.10p -4.91%
Diversified Energy Company (DEC) 911.00p -4.60%
Foresight Environmental Infrastructure Limited (FGEN) 71.00p -4.05%
Deliveroo Class (ROO) 126.90p -3.46%
Dr. Martens (DOCS) 61.05p -3.33%
Energean (ENOG) 934.50p -3.15%