LONDON MARKET CLOSE: FTSE 100 in red as miners sink lower

(Alliance News) - The FTSE 100 closed lower on Tuesday, but the FTSE 250 index edged higher, ...

Alliance News 5 December, 2023 | 4:52PM
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(Alliance News) - The FTSE 100 closed lower on Tuesday, but the FTSE 250 index edged higher, ahead of key US jobs data out later this week.

The FTSE 100 index closed down 23.12 points, 0.3%, at 7,489.84. The FTSE 250 ended up 126.28 points, 0.7%, at 18,487.53, and the AIM All-Share closed up 1.44 points, or 0.2%, at 716.68.

The Cboe UK 100 ended down 0.2% at 747.56, the Cboe UK 250 closed up 0.8% at 16,011.74, and the Cboe Small Companies ended up 0.2% at 13,443.48.

Stocks in New York were mixed at the London equities close, with the DJIA down 0.5% and the S&P 500 index down 0.2%, whilst the Nasdaq Composite was up 0.2%.

All eyes on Tuesday have been on economic data.

On Tuesday afternoon, readings from S&P Global and the Institute of Supply Management showed that the US service sector continued to expand in November.

The seasonally adjusted final S&P Global US services purchasing managers' index posted 50.8 points in November, matching the earlier flash estimate and up slightly from 50.6 points in October.

Coming in just above the 50.0 no-change mark, it shows the US service sector expanded in September.

Data from the ISM on Tuesday also showed an expansion in the US service sector in November. The ISM services PMI posted 52.7 points in November, up from 51.8 points in October. This marks the eleventh consecutive month of growth.

"Monthly swings in the ISM services index can be erratic, but the November uptick broadly continues the flat trend since the spring. That's consistent with the recent trends in spending on services, where momentum is softening, at the margin, but the overall rate of growth remains healthy," said Pantheon Macroeconomics Kieran Clancy.

"In short, the Fed's aggressive hikes are yet to make a meaningful dent to services activity, unlike the manufacturing sector, where the bulk of the tightening is reflected in the weak activity numbers."

Investors this week will continue to carefully eye the outlook for US interest rates. The latest nonfarm payrolls report is on Friday and the precursor ADP reading on Wednesday.

The pound was quoted at USD1.2613 at the London equities close Tuesday, lower compared to USD1.2620 at the close on Monday. The euro stood at USD1.0809, down against USD1.0817. Against the yen, the dollar was trading at JPY147.10, higher compared to JPY147.02.

In the FTSE 100, miners were hurt by Moody's downgrade on the outlook of China's credit rating.

Endeavour Mining lost 4.4% and Antofagasta lost 2.6%. Fresnillo and Anglo American both shed 3.1%.

Ratings agency Moody's downgraded the outlook on China's credit rating to "negative" from "stable" on the back of rising debt in the world's second-largest economy, with Beijing saying it was "disappointed" by the move.

The change "reflects rising evidence that financial support will be provided by the government and wider public sector to financially stressed regional and local governments and state-owned enterprises", the US agency said in a note.

Also holding down the FTSE 100 index was Ashtead, which fell 3.8% on Tuesday.

The London-based industrial equipment rental company said in the six months to October 31, pretax profit grew 5.0% to USD1.25 billion from USD1.19 billion the year before, as revenue rose 16% to USD5.57 billion from USD4.80 billion a year prior.

Looking ahead, Chief Executive Brendan Horgan said: "The group continues to perform strongly with revenue up 16% and rental revenue growth of 13%, both at constant currency," adding its North America end markets "remain robust with healthy demand."

In the FTSE 250, discoverIE rose 16%.

In the half-year ended September 30, the Guildford, Surrey-based customised electronics manufacturer and designer said pretax profit grew 8.1% to GBP16.0 million from GBP14.8 million the year before. Revenue fell slightly to GBP222.0 million from GBP222.6 million a year prior.

discoverIE upped its interim dividend by 5.6% to 3.75 pence per share from 3.55p in the first half of financial 2023.

SPP rose 6.4%, on its earnings.

The London-based operator of travel food and beverage outlets said its pretax profit more than tripled to GBP88.1 million in the year that ended on September 30, from GBP25.2 million the year before. Revenue increased 38% to GBP3.01 billion from GBP2.19 billion.

In light of its overall "strong recovery", SSP announced its resumption of dividend payments, declaring a final dividend of 2.5 pence per share. It had suspended dividend payments in financial 2020, after paying a 6.0p final dividend for financial 2019.

Amongst London's small-caps, On The Beach Group plummeted 18%.

The package holiday company said revenue in the year to September 30 increased 19% to GBP170.2 million, from GBP143.4 million. Its pretax profit jumped to GBP12.9 million from GBP2.2 million.

On The Beach did not recommend a final dividend for financial 2023. However, it said it does intend to reintroduce a dividend for the next financial year, based on a return to "normal market conditions" and a "sustainable cash generative business model".

On AIM, tinyBuild dropped 49%.

The Washington, US-based video game developer and publisher said that so far in the fourth quarter of 2023, trading has failed to meet expectations after an "unusually weak" performance in October.

tinyBuild added that it now expects full-year revenue to be between USD40 million and USD50 million. At best this is a 4.1% decline from the USD52.2 million it achieved in 2022.

In European equities on Tuesday, the CAC 40 in Paris ended up 0.7%, while the DAX 40 in Frankfurt ended up 0.8%.

Brent oil was quoted at USD78.49 a barrel at the London equities close Tuesday, down slightly from USD78.53 late Monday. Gold was quoted at USD2,018.22 an ounce at the London equities close Tuesday, lower against USD2,025.87 at the close on Monday.

In Wednesday's UK corporate calendar, there are full year results from Schroder European Real Estate Investment Trust, as well as half year results from System1.

As well as the US jobs report, the economic calendar for Wednesday has a UK construction PMI reading at 0930 GMT, followed by EU retail sales at 1000 GMT.

Later on Wednesday, Canada's central bank will make an interest rate decision.

By Sophie Rose, Alliance News senior reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
TinyBuild Inc 5.50 GBX 4.76 -
discoverIE Group PLC 686.00 GBX -0.29 -
On The Beach Group PLC 145.00 GBX 0.00 -
Antofagasta PLC 1,796.50 GBX 0.50 -
Endeavour Mining PLC 1,263.00 GBX 1.04 -
Fresnillo PLC 474.40 GBX 0.87 -
Ashtead Group PLC 5,466.00 GBX -1.05
Anglo American PLC 1,786.00 GBX 0.92

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