London close: Stocks weaker as recession fears continue

London stocks closed in negative territory on Thursday as concerns about a US recession dented the mood.

The FTSE 100 ended the session down 1.07% at 7,747.29, and the FTSE 250 was off 1.59% at 19,574.11..

Sterling was meanwhile in the green, last trading up 0.11% on the dollar at $1.2362, as it strengthened 0.2% against the euro to change hands at €1.1458.

“European markets have taken their cues from last night’s weak US finish opening and traded sharply lower as the early year optimism starts to run into a little bit of turbulence, and some profit taking, with the DAX and FTSE 100 both slipping to one week lows,” said CMC Markets chief market analyst Michael Hewson.

“Today’s biggest fallers have included house builders after the latest RICS house price balance survey fell further into negative territory from -26% in November to -42% in December.

“A sharp reversal in copper prices is also weighing on the basic resources sector, pulling the likes of Antofagasta, Anglo American and Glencore.”

In economic news, UK house prices fell sharply in December according to a closely-watched survey on Thursday, with weakness forecast to continue well into 2023.

According to the latest UK residential survey from the Royal Institution of Chartered Surveyors, the national house price net balance tumbled to -42 in December, from -26 in December.

The balance measures the difference between the percentage of surveyors seeing rises and falls in house prices.

It was the lowest reading since autumn 2010, and well below the -30 analysts had been expecting.

Demand remained subdued, with a net balance for new buyer enquiries of -39, largely in line with November’s -38, while the number of new properties coming to market fell to -23, the weakest reading since September 2021.

The agreed sales balance was -41, against -36 in November.

“The latest survey highlights the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy,” said Simon Rubinsohn, chief economist at RICS.

“This is reflected in forward-looking RICS indicators around both prices and activity.”

Across the pond, Americans filed new unemployment claims at a slower pace in the week ended 14 January, according to the Department of Labor.

Initial jobless claims fell by 15,000 week-on-week to 190,000, the lowest in four months and well and truly below Wall Street expectations for a print of 214,000.

On a non-seasonally adjusted basis, initial claims fell by 53,582 to 285,575, principally due to seasonal factors.

The four-week moving average, which aims to strip out week-to-week volatility, slipped by 6,500 to 206,000, while continuing claims rose by 17,000 to 1.64m in the week ended 7 January.

Staying stateside, builders in the US broke ground on fewer homes in December, roughly as expected.

According to the Department of Commerce, in seasonally adjusted terms, housing starts fell by 1.4% month-on-month to reach an annualised pace of 1.382m.

That was better than the decline to 1.350m that economists had anticipated.

However, the better-than-expected reading was offset by a downwards revision to the prior month's print from 1.427m to 1.401m.

Finally on data, manufacturing sector activity in the US mid-Atlantic region at the start of 2023 improved a little, according to a closely-followed survey.

The Federal Reserve Bank of Philadelphia's factory sector index rose from a reading of -13.7 for December to -8.9 in January .

Economists had forecast a reading of -10.0.

On London’s equity markets, heavily-weighted miners were in the red as copper prices fell.

Antofagasta was down 4.33%, Glencore lost 2.54% and Anglo American lost 2.96%, while oil giants BP and Shell gushed 2.28% and 1.75% lower, respectively, as crude prices retreated.

Precious metals miner Fresnillo lost 2.46% after a downgrade to ‘sell’ from ‘neutral’ at UBS.

"We are constructive on gold [and] silver-but see risks for Fresnillo into the fourth quarter 2022 results as consensus costs estimates are too low and silver guidance may disappoint," it said.

Dr. Martens tumbled 30.07% after the iconic bootmaker warned on full-year profits, saying it had been hit by operational issues at its Los Angeles distribution centre and weaker trading in the US direct-to-consumer segment.

Investment platform AJ Bell slid 8.05% even after it posted a rise in customer numbers and assets under management, as the shares traded without entitlement to the dividend.

Homewares retailer Dunelm Group slumped 2.98%, despite saying that annual profits were set to be above expectations as consumers sought value for money amid the cost-of-living crisis.

Network International slid 10.37% after it posted a jump in fourth-quarter revenues but warned of increasing headwinds for 2023.

The firm said that while the outlook for 2023 remained strong, it faced "more challenging economic and inflationary impacts", including slowing growth in some African markets.

On the upside, Auto Trader Group gained 1.24% after an upgrade to 'buy' at Goldman Sachs.

Informa ticked 0.42% higher after the academic publisher and events specialist said full-year numbers were set to come in ahead of expectations, following strong performances across the business.

Reporting by Josh White for Sharecast.com. Additional reporting by Michele Maatouk, Frank Prenesti, Abigail Townsend, Iain Gilbert and Alexander Bueso.

Market Movers

FTSE 100 (UKX) 7,747.29 -1.07%
FTSE 250 (MCX) 19,574.11 -1.59%
techMARK (TASX) 4,468.79 -0.72%

FTSE 100 - Risers

Entain (ENT) 1,482.00p 2.53%
Severn Trent (SVT) 2,802.00p 2.15%
Beazley (BEZ) 646.00p 1.81%
United Utilities Group (UU.) 1,040.50p 1.51%
Hiscox Limited (DI) (HSX) 1,121.00p 1.49%
British American Tobacco (BATS) 3,108.00p 1.22%
Imperial Brands (IMB) 2,051.00p 1.18%
Pearson (PSON) 942.20p 1.14%
Flutter Entertainment (CDI) (FLTR) 12,265.00p 1.11%
Auto Trader Group (AUTO) 572.60p 1.02%

FTSE 100 - Fallers

Ocado Group (OCDO) 707.80p -7.09%
Persimmon (PSN) 1,379.00p -5.55%
Hargreaves Lansdown (HL.) 887.40p -4.56%
Antofagasta (ANTO) 1,723.00p -4.25%
Berkeley Group Holdings (The) (BKG) 4,189.00p -3.97%
Taylor Wimpey (TW.) 113.05p -3.87%
Ashtead Group (AHT) 4,930.00p -3.71%
Airtel Africa (AAF) 113.00p -3.68%
Scottish Mortgage Inv Trust (SMT) 741.20p -3.59%
Barratt Developments (BDEV) 445.50p -3.47%

FTSE 250 - Risers

Marshalls (MSLH) 333.00p 5.85%
Lancashire Holdings Limited (LRE) 653.50p 2.11%
Workspace Group (WKP) 503.50p 1.96%
TBC Bank Group (TBCG) 2,210.00p 1.84%
Drax Group (DRX) 654.00p 1.40%
Direct Line Insurance Group (DLG) 174.65p 1.39%
Bank of Georgia Group (BGEO) 2,675.00p 1.33%
BH Macro Ltd. GBP Shares (BHMG) 4,490.00p 0.90%
Serco Group (SRP) 152.90p 0.79%
Volution Group (FAN) 389.00p 0.78%

FTSE 250 - Fallers

Dr. Martens (DOCS) 144.90p -30.74%
Network International Holdings (NETW) 283.60p -10.37%
ASOS (ASC) 704.00p -7.96%
AJ Bell (AJB) 340.80p -7.94%
Energean (ENOG) 1,242.00p -7.86%
Bridgepoint Group (Reg S) (BPT) 218.20p -7.07%
Molten Ventures (GROW) 375.40p -7.03%
Tullow Oil (TLW) 36.90p -5.69%
Darktrace (DARK) 235.30p -5.20%
Carnival (CCL) 721.00p -5.13%