London close: Stocks edge down in quiet trade; jobless claims in focus

London stocks ended a little lower on Thursday, underperforming their European and US peers after hitting a 22-month high in the previous session.

The FTSE 100 closed down 0.2% at 7,403.01 in holiday-thinned trade, as investors continued to mull the implications of the Omicron variant and digested encouraging US data.

Figures out earlier from the Department of Labor showed that initial jobless claims came in at 198,000 for the week to December 25, coming in below expectations of 208,000 but still strong. This followed last week's print of 206,000, revised up from 205,000.

Continuous jobless claims dropped sharply to 1.716 million in the week ending December 18, the data showed, well below expectations for a small rise to 1.868m from the previous week's 1.856m (which itself was revised down from 1.859m). The insured unemployment rate fell to 1.3% from 1.4% in the prior week.

IG market analyst Joshua Mahony said: "Market sentiment continues to straddle fears of near-term Covid restrictions and expectations of a swift recovery, with value and growth names fluctuating as a result. Nonetheless, the move towards higher rates and higher yields should bring a rare period of outperformance for value names once the Omicron wave starts to subside.

"Today brought a rare data point worth considering, with unemployment claims dropping back below the 200k threshold for just the third time in 22-months. Next week brings the latest US jobs report, with traders keeping an eye out for signs that the Omicron wave is having a detrimental impact on the economic recovery. Nonetheless, the lack of any pop in jobless claims today does highlight how things appear relatively stable in the face of rising Covid cases."

On home turf, the latest survey from mortgage lender Nationwide showed that house prices recorded a bigger-than-expected rise in December and marked their strongest year since 2006, but there could be a cooling next year.

Prices in December increased by 1% month on month - compared with forecasts of 0.5% - driven by strong demand, the stamp duty tax break, and a shortage of homes on the market.

December house prices were up 10.4% year-on-year and the average price of a property stood at record high of £254,822.

"It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax," Robert Gardner, Nationwide's chief economist, said.

"Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck."

However, he added that the market “still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth".

"Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term."

Unsurprisingly for this time of year, corporate news was basically non-existent, but Harbour Energy fell after saying it had completed the drilling of the Dunnottar exploration well in licence P2399 in the UK North Sea.

Market Movers

FTSE 100 (UKX) 7,404.54 -0.22%
FTSE 250 (MCX) 23,532.00 0.06%
techMARK (TASX) 4,581.66 0.10%

FTSE 100 - Risers

Flutter Entertainment (CDI) (FLTR) 11,725.00p 3.40%
Entain (ENT) 1,692.00p 1.93%
Dechra Pharmaceuticals (DPH) 5,275.00p 1.44%
Rio Tinto (RIO) 4,900.50p 1.12%
JD Sports Fashion (JD.) 217.60p 1.12%
Whitbread (WTB) 2,999.00p 1.04%
Auto Trader Group (AUTO) 736.80p 0.88%
Lloyds Banking Group (LLOY) 48.42p 0.88%
Pearson (PSON) 604.60p 0.83%
Scottish Mortgage Inv Trust (SMT) 1,336.50p 0.83%

FTSE 100 - Fallers

Ashtead Group (AHT) 6,012.00p -1.76%
London Stock Exchange Group (LSEG) 6,960.00p -1.53%
Berkeley Group Holdings (The) (BKG) 4,827.00p -1.47%
BT Group (BT.A) 168.00p -1.23%
Intermediate Capital Group (ICP) 2,174.00p -1.18%
Diageo (DGE) 4,046.50p -1.17%
BP (BP.) 332.50p -1.04%
Spirax-Sarco Engineering (SPX) 16,090.00p -1.02%
National Grid (NG.) 1,079.00p -1.01%
SSE (SSE) 1,655.50p -0.99%

FTSE 250 - Risers

PureTech Health (PRTC) 298.50p 6.61%
Fidelity China Special Situations (FCSS) 309.50p 3.17%
CMC Markets (CMCX) 260.50p 2.96%
Airtel Africa (AAF) 133.50p 2.85%
Carnival (CCL) 1,432.00p 2.62%
Johnson Matthey (JMAT) 2,085.00p 2.51%
Micro Focus International (MCRO) 417.20p 2.48%
Trustpilot Group (TRST) 333.00p 2.46%
JTC (JTC) 936.00p 2.18%
888 Holdings (888) 306.20p 2.07%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 1,301.50p -3.16%
Moneysupermarket.com Group (MONY) 214.80p -2.54%
Renishaw (RSW) 4,772.00p -2.17%
4Imprint Group (FOUR) 2,810.00p -2.09%
Diversified Energy Company (DEC) 104.20p -2.07%
Ibstock (IBST) 200.60p -1.96%
Essentra (ESNT) 330.00p -1.93%
Brewin Dolphin Holdings (BRW) 363.00p -1.89%
FirstGroup (FGP) 102.50p -1.82%
AJ Bell (AJB) 381.00p -1.80%