London close: Stocks end up as investors mull US inflation reading

31st May 2024 14:51

(Sharecast News) - London stocks ended up on Friday as investors mulled the latest US inflation reading, with broker notes helping to lift the top-flight index.

The FTSE 100 closed up 0.5% at 8,275.38.

Data released earlier by the US Department of Commerce showed that Americans reined in their spending a tad in April, even as price pressures ebbed a smidgen.

Personal income and spending rose at a month-on-month clip of 0.3% and 0.2%, respectively. Economists had pencilled in increases of 0.3% for both.

The headline price deflator for personal consumption expenditures meanwhile was up by 0.3% for a third consecutive time in month-on-month terms, as expected.

However, at the core level PCE price gains clocked in at 0.2%, recording their slowest pace year-to-date.

Headline PCE inflation was up by 2.7% year-on-year in April and core PCE prices by 2.8%, both unchanged from March, as expected by economists.

Chris Beauchamp, chief market analyst at IG, said: "After the mixed trading of recent weeks investors were glad to see the slowdown in core PCE, which provided a boost for beleaguered equities.

"While it leaves expectations around the June Fed meeting unchanged, it at least allays some worries that a hike was becoming more likely."

On home shores, data from the Bank of England showed the amount of credit given to consumers halved in April, while mortgage approvals fell as buyers held out for a potential cut to interest rates later this summer.

Net consumer credit rose by just £0.73bn last month, well below the £1.42bn extended to consumers in March, which was revised down from £1.58bn.

This was considerably below the £1.50bn expected by economists and was likely a result of higher borrowing costs.

Net borrowing through credit cards dropped to just £0.19bn from £0.66bn the month before, while other forms of credit like car finance and personal loans declined to £0.54bn from £0.76bn previously.

Individuals' borrowing of mortgage debt increased to £2.4bn from £0.5bn the month before. However, net mortgage approvals for house purchases - a closely watched indicator of future borrowing - fell to 61,100 in April from 61,300 in March, while net approvals for remortgaging fell to 29,900 from 33,500.

Investors were also mulling the latest figures from Nationwide, which showed that house prices returned to growth in May after two months of declines.

House prices were up 0.4% on the month following a drop of 0.4% in April and 0.2% in March. Economists had expected house prices to tick up 0.1% on the month.

On the year, prices rose 1.3% in May following a 0.6% jump in April and a 1.6% increase in March.

The average price of a home now stands at £264,249, up from £261,962.

Nationwide chief economist Robert Gardner said: "The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months."

Elsewhere, industry research showed that UK retail footfall eased in May despite the bank holiday weekends and improving weather.

According to the latest BRC-Sensormatic IQ footfall monitor, total footfall slipped 3.6% in May, although that was an improvement on April's 7.2% slump.

All types of shopping destinations saw fewer visitors during the month. Footfall decreased by 2.7% on high streets, by 2.3% in retail parks and by 4.5% in shopping centres.

In equity markets, National Grid jumped after Jefferies reiterated its 'buy' rating on the energy infrastructure firm.

British Gas owner Centrica was a high riser after an upgrade to 'outperform' from 'sector perform' at RBC Capital Markets.

Whitbread advanced after JPMorgan Cazenove reiterated its 'overweight' rating on the Premier Inn owner. It said Whitbread continues to be one of its key convictions and sees the recent pullback - the shares are down 20% year-to-date - as "an opportunity to revisit the story".

On the downside, JD Sports Fashion tumbled after it reported lower-than-expected annual profits as it continued to invest in its store estate. Profits before tax and adjusting items of £917.2m were down 7.5%, against forecasts of £920m. Organic sales were up 9%.

Associated British Foods lost ground after UBS sold 10.3m shares in the Primark owner in a placing on behalf of its biggest shareholder, Howard Investments Limited.

Shares in Flutter Entertainment ended just in the red and well off lows, having tumbled earlier after the gambling outfit said finance chief Paul Edgecliffe-Johnson would leave the company with immediate effect as it shifted its listing to the US.

Market Movers

FTSE 100 (UKX) 8,275.38 0.54%

FTSE 250 (MCX) 20,730.12 0.29%

techMARK (TASX) 4,845.03 0.92%

FTSE 100 - Risers

National Grid (NG.) 882.40p 4.67%

SSE (SSE) 1,755.00p 2.27%

Severn Trent (SVT) 2,386.00p 2.14%

GSK (GSK) 1,766.50p 2.11%

Reckitt Benckiser Group (RKT) 4,452.00p 1.92%

InterContinental Hotels Group (IHG) 7,900.00p 1.88%

Centrica (CNA) 141.55p 1.72%

Smith (DS) (SMDS) 381.00p 1.71%

Whitbread (WTB) 2,953.00p 1.51%

BT Group (BT.A) 130.60p 1.40%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 127.50p -4.71%

Associated British Foods (ABF) 2,550.00p -4.14%

Ocado Group (OCDO) 373.60p -2.58%

Burberry Group (BRBY) 1,035.00p -1.80%

Spirax-Sarco Engineering (SPX) 8,910.00p -1.55%

CRH (CDI) (CRH) 6,118.00p -1.54%

Bunzl (BNZL) 2,936.00p -1.54%

Airtel Africa (AAF) 121.90p -1.53%

Rightmove (RMV) 533.20p -1.44%

Fresnillo (FRES) 619.50p -1.35%

FTSE 250 - Risers

Me Group International (MEGP) 182.80p 5.18%

Aston Martin Lagonda Global Holdings (AML) 145.20p 4.76%

QinetiQ Group (QQ.) 447.20p 4.10%

GCP Infrastructure Investments Ltd (GCP) 79.30p 4.07%

Dr. Martens (DOCS) 87.40p 4.05%

Wizz Air Holdings (WIZZ) 2,272.00p 3.46%

Lancashire Holdings Limited (LRE) 633.00p 3.09%

Patria Private Equity Trust (PPET) 579.00p 2.84%

Bodycote (BOY) 754.00p 2.72%

Pennon Group (PNN) 622.00p 2.64%

FTSE 250 - Fallers

Ferrexpo (FXPO) 41.55p -6.63%

Auction Technology Group (ATG) 522.00p -5.26%

Wood Group (John) (WG.) 179.50p -4.06%

Marshalls (MSLH) 316.00p -2.77%

Morgan Advanced Materials (MGAM) 309.00p -2.68%

Inchcape (INCH) 796.00p -2.51%

Polar Capital Technology Trust (PCT) 2,990.00p -2.29%

Bytes Technology Group (BYIT) 558.50p -2.27%

Keller Group (KLR) 1,290.00p -2.27%

Genuit Group (GEN) 450.50p -2.17%