London midday: Nine-day rally loses steam as markets flatline
London's top-tier equity index was struggling for direction on Friday as investors locked in profits following nine straight days of gains, driven by easing trade tensions and hopes of a rate cut by the Federal Reserve.
By 1143 GMT, the FTSE 100 was up just 0.06% (+5 points) at 8,412.47, after having swung between gains and losses for most of the morning session, with just 37 points separating the intraday high and low.
The index closed at its highest since 3 April on Thursday, having surged by 9.5% over the past nine trading days alone.
Helping recent gains were rumours that China is considering suspending its 125% retaliatory tariffs on select US imports, raising hopes that the two nations could come to a deal, while US-Japan trade talks were said to be promising.
However, reports from Xinhua News Agency early on Friday suggested that China was preparing contingency plans – such as monetary and policy tools to boost the economy amid the deepening trade war – as Beijing continues to dismiss US reports that the two sides were closing in on a trade deal.
Nevertheless, Fed rate-cut chatter has lifted sentiment in recent days after policymakers Christopher Waller and Beth Hammack both indicated that they would be happy to loosen monetary policy earlier than anticipated if economic data worsens – with market pricing for a June rate cut increasing.
"Stocks have enjoyed a much better week overall as talk of firing Powell has receded and the US strikes a more conciliatory tone with China," said Chris Beauchamp, chief market analyst at IG.
"But with so many companies warning of tougher times to come, the current bounce could be just one of those famed 'bear market rallies', which stage a huge rebound before giving way to bigger losses as bad news begins to bite."
Back on home shores, economic data out on Friday showed that UK consumer confidence softened notably in April as concerns about the health of the economy mounted. The latest GfK Consumer Confidence Barometer was -23, down four points on both March and on April 2024, and the lowest level since November 2023. Within that, all-sub measures were lower, although the sharpest falls related to the economy. Expectations for the general economic situation over the next 12 months fell eight points to -37.
Meanwhile, UK retail volumes were estimated to have risen by 0.4% in March, following a revised 0.7% increase in February, surprising economists who had pencilled in a 0.4% decline. The Office for National Statistics said much of March’s rise was driven by clothing and outdoor retailers, who reported that the warmer, sunny weather had boosted fashion and DIY sales in particular.
Mobico tanks, miners provide a drag
Transport company Mobico dropped more than 30% after saying annual earnings would be at the lower end of guidance. The company also announced it had sold its North America school bus business to global infrastructure investment manager I Squared Capital for up to $608m.
Precious metals miners Fresnillo, Endeavour and Hochschild fell as gold prices continued to retreat from recent record highs. Other heavyweight miners such as Anglo American and Antofagasta were also trading in the red.
Companies with heavy exposure to the US were performing well, including building materials group CRH, gambling outfit Entain, and pest control giant Rentokil Initial.
Meanwhile, Shell edged higher on the news that it is to exit three offshore gas projects in Colombia as they no longer meet the company's "strategic ambitions". Shell, the operator in the projects, has held an equal share in the Col 5, Purple Angel and Fuerte Sur deepwater projects along with state-run Ecopetrol since December 2020.
Market Movers
FTSE 100 (UKX) 8,412.47 0.06%
FTSE 250 (MCX) 19,581.10 0.39%
techMARK (TASX) 4,466.45 0.24%
FTSE 100 - Risers
Melrose Industries (MRO) 429.70p 3.84%
CRH (CDI) (CRH) 6,986.00p 3.37%
Babcock International Group (BAB) 818.50p 3.02%
Rentokil Initial (RTO) 346.50p 2.55%
St James's Place (STJ) 954.40p 2.49%
Rolls-Royce Holdings (RR.) 753.20p 2.45%
Entain (ENT) 580.20p 1.97%
Mondi (MNDI) 1,145.00p 1.73%
BAE Systems (BA.) 1,707.00p 1.70%
Informa (INF) 718.80p 1.64%
FTSE 100 - Fallers
Rightmove (RMV) 714.40p -2.11%
Unilever (ULVR) 4,690.00p -2.11%
Antofagasta (ANTO) 1,665.50p -1.45%
Marks & Spencer Group (MKS) 389.10p -1.37%
Anglo American (AAL) 2,128.00p -1.25%
Diageo (DGE) 2,070.00p -1.24%
Flutter Entertainment (DI) (FLTR) 17,120.00p -1.15%
JD Sports Fashion (JD.) 77.28p -1.13%
WPP (WPP) 553.60p -1.11%
Fresnillo (FRES) 993.00p -1.10%
FTSE 250 - Risers
Wizz Air Holdings (WIZZ) 1,626.00p 3.44%
Bridgepoint Group (Reg S) (BPT) 268.20p 3.39%
Deliveroo Class (ROO) 144.60p 3.29%
Aston Martin Lagonda Global Holdings (AML) 69.50p 3.19%
Allianz Technology Trust (ATT) 354.50p 2.75%
Senior (SNR) 130.80p 2.51%
Inchcape (INCH) 658.50p 2.09%
QinetiQ Group (QQ.) 391.80p 2.08%
Bellevue Healthcare Trust (Red) (BBH) 123.20p 1.99%
THG (THG) 29.00p 1.83%
FTSE 250 - Fallers
Mobico Group (MCG) 40.44p -31.40%
North Atlantic Smaller Companies Inv Trust (NAS) 3,470.00p -2.25%
Endeavour Mining (EDV) 2,012.00p -2.14%
Hochschild Mining (HOC) 266.40p -1.99%
JPMorgan Indian Investment Trust (JII) 985.00p -1.70%
Ocado Group (OCDO) 277.70p -1.59%
Investec (INVP) 457.40p -1.29%
Ithaca Energy (ITH) 131.30p -1.28%
Pets at Home Group (PETS) 229.20p -1.21%
Lancashire Holdings Limited (LRE) 576.00p -1.20%