London close: Stocks manage gains ahead of key rate decisions

(Sharecast News) - London stocks closed slightly above the waterline on Monday, as investors exercised caution ahead of key interest rate announcements scheduled across the globe later in the week.

The FTSE 100 index inched up 0.07% to finish at 8,278.44 points, while the FTSE 250 gained 0.16% to close at 20,929.59 points.

In currency markets, sterling was last up 0.54% on the dollar to trade at $1.3195, as it edged up 0.16% against the euro, changing hands at �1.1869.

"A new record high for the Dow contrasts with a more cautious attitude across most other equity markets, where gains have been limited at best," said IG chief market analyst Chris Beauchamp.

"A cautious pruning of risk has been in evidence for most of the day, with the mood soured by reports of poor sales for Apple's new product."

Beauchamp added that last week saw a late surge in expectations around a 50 basis point rate cut across the Atlantic, which he described as a recognition that the Fed's window to ease policy was limited by the presidential election.

"Recession fears have spiked dramatically, and investors have an unnerving feeling that the Fed is firmly behind the curve.

"A 50 basis point move might help to stop that perception from spreading further, though Powell will have to perform a delicate balancing act to avoid giving the impression that they are more concerned about the near-term outlook."

Alongside the Federal Reserve, both the Bank of England and the Bank of Japan are scheduled to make their next rate decisions this week.

UK housing market strengthens, manufacturers report mixed start to second half

In economic news, the UK housing market showed signs of strengthening in September, as both asking prices and the number of agreed sales increased.

According to the latest data from Rightmove's house price index, average asking prices for new sellers rose by 0.8% this month - double the long-term average growth for the period.

On an annual basis, prices saw a 1.2% uptick, bringing the national average asking price to £370,759.

Market activity intensified with a 27% jump in the number of agreed sales during September.

Additionally, the number of new sellers entering the market grew by 14% compared to the same month last year.

The average number of homes available for sale per estate agent had now reached its highest point since 2014, indicating a boost in housing supply.

While autumn was typically a busy season for real estate, Rightmove noted that the surge in activity looked to have started earlier than usual this year.

Tim Bannister, Rightmove's director of property science, said there had been a "strong rebound in activity from both buyers and sellers compared to the subdued market at this time last year, continuing the momentum from the better-than-expected summer market".

"The certainty of a new government followed by the first Bank Rate cut in four years invigorated the market, opening a window of opportunity for movers to act," he added.

In contrast, UK manufacturers reported a mixed start to the second half of 2024, as revealed in the quarterly manufacturing outlook survey by Make UK and BDO.

The report indicated that factory output contracted for the first time since late 2020, with the output balance dropping to -2% in the third quarter from +9% in the previous quarter.

Domestic orders weakened, recording a balance of -4%, while export orders painted a more positive picture, rising to a balance of +11%.

That increase was driven by strong demand from the European Union, particularly for plant machinery and electronic goods, as manufacturers in the EU ramped up their investments.

Despite the dip in domestic performance, overall confidence in the manufacturing sector remained high.

The sentiment index inched up to 7.1 from 6.9 previously.

Looking ahead, manufacturers were optimistic, with the expected output balance projected to surge to +33% in the coming quarter.

The report suggested that the "extraordinary turbulence" experienced over the past few years could be stabilising, offering hope for a more consistent economic environment.

BDO said that the "extraordinary turbulence" experienced over the past few years had hopefully stabilised.

"While the output metric performance hasn't significantly grown in the first two quarters, the combination of consecutive positive quarters mixed with consistent demand conditions in the market led analysts to be quietly confident about growth staying the course," the survey said.

"With little in the way of notable economic shocks occurring in the UK market over the past eight months, this confidence in consistency had been shared by economists and the industry alike, as measured by a remarkably positive and robust business confidence index."

TI Fluid Systems surges on offer disclosures, Phoenix slides

On London's equity markets, TI Fluid Systems surged 14.95% following the company's disclosure that it had rejected two acquisition approaches from Canada's ABC Technologies over the last month.

ABC Technologies, owned by private equity firm Apollo, initially proposed an offer of 165p per share on 22 August and later increased it to 176p per share on 4 September - a 20.7% premium over TI Fluid's closing price on 13 September.

TI Fluid Systems, a manufacturer of automotive fluid systems, said the bids "significantly undervalued" the company and its future prospects.

Elsewhere, Playtech rallied with a 14.07% increase after the gambling technology firm announced that its annual adjusted earnings were expected to be slightly ahead of market expectations, driven by strong performance in its business-to-business (B2B) division.

Retailer Marks and Spencer Group saw its shares rise 3.02%.

The uptick came after RBC Capital Markets raised its price target for the retailer from 350p to 400p and increased its earnings estimates, maintaining an 'outperform' rating.

Kingfisher, the owner of B&Q and Castorama, gained 2.34% ahead of its half-year results scheduled for release on Tuesday.

On the downside, Phoenix Group Holdings fell 4.77%.

The pensions, savings, and life insurance provider reported a 15% increase in operating profits for the first half and reiterated its medium-term targets for earnings and cash generation.

However, the company announced it was withdrawing the planned sale of its SunLife division - which offers financial products to individuals over 50 - citing "current uncertainty in the protection market".

The sale had been initiated just three months prior.

Close Brothers Group declined 3.44% after the merchant bank reported that chief executive Adrian Sainsbury was taking a temporary medical leave of absence.

Group finance director Mike Morgan would assume Sainsbury's principal responsibilities, supported by chairman Mike Biggs and other senior management team members.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,278.44 0.07%

FTSE 250 (MCX) 20,929.59 0.16%

techMARK (TASX) 4,898.90 0.10%

FTSE 100 - Risers

JD Sports Fashion (JD.) 154.30p 3.63%

Marks & Spencer Group (MKS) 361.40p 2.90%

Kingfisher (KGF) 290.30p 2.18%

Associated British Foods (ABF) 2,232.00p 1.96%

Tesco (TSCO) 370.60p 1.67%

Sainsbury (J) (SBRY) 294.60p 1.66%

Intermediate Capital Group (ICG) 2,322.00p 1.22%

3i Group (III) 3,239.00p 1.22%

Vodafone Group (VOD) 78.42p 1.06%

Fresnillo (FRES) 574.00p 1.06%

FTSE 100 - Fallers

Phoenix Group Holdings (PHNX) 546.00p -5.29%

Melrose Industries (MRO) 467.20p -2.57%

Spirax Group (SPX) 7,380.00p -1.80%

Prudential (PRU) 613.40p -1.70%

Entain (ENT) 723.60p -1.50%

Scottish Mortgage Inv Trust (SMT) 806.40p -1.49%

Sage Group (SGE) 1,017.50p -1.31%

Croda International (CRDA) 3,956.00p -1.22%

Beazley (BEZ) 765.00p -1.10%

Rolls-Royce Holdings (RR.) 495.80p -1.08%

FTSE 250 - Risers

Playtech (PTEC) 753.00p 15.14%

TI Fluid Systems (TIFS) 166.40p 14.13%

NCC Group (NCC) 179.60p 7.16%

JTC (JTC) 1,134.00p 3.85%

Alpha Group International (ALPH) 2,220.00p 2.78%

Auction Technology Group (ATG) 398.50p 2.71%

Patria Private Equity Trust (PPET) 540.00p 2.66%

Hochschild Mining (HOC) 187.00p 2.52%

Target Healthcare Reit Ltd (THRL) 89.70p 2.51%

Ashmore Group (ASHM) 190.20p 2.37%

FTSE 250 - Fallers

Trustpilot Group (TRST) 220.00p -3.72%

Oxford Instruments (OXIG) 2,125.00p -3.63%

Spire Healthcare Group (SPI) 235.50p -3.29%

Close Brothers Group (CBG) 521.00p -3.25%

Indivior (INDV) 726.00p -2.68%

Computacenter (CCC) 2,424.00p -2.10%

Morgan Advanced Materials (MGAM) 284.00p -2.07%

Senior (SNR) 159.00p -1.97%

Workspace Group (WKP) 650.00p -1.96%

Bank of Georgia Group (BGEO) 4,005.00p -1.96%