London close: Stocks weaker, retailers prove bright spot

London stocks closed in negative territory on Wednesday, although retailers Dunelm and B&M managed to keep their heads above the waterline through the afternoon after positive updates.

The FTSE 100 ended the session down 0.75% at 7,095.53, and the FTSE 250 was off 1.03% at 23,848.89.

Sterling was in a mixed state, last trading 0.05% lower on the dollar at $1.3779, while it strengthened 0.08% against the euro to €1.1651.

“There is little sign that the losses in European markets can be reversed soon, especially with concerns rising about the ECB’s attitude at tomorrow’s meeting,” said IG chief market analyst Chris Beauchamp.

“Losses prevail across global indices this afternoon, helped along the way by James Bullard’s comments about pushing ahead with a taper in Fed asset purchases despite the recent weaker NFP print.

“The quiet summer is definitely over, and so far September is living up to its reputation as a tough month for stock markets.”

Beauchamp said that after the gains of July and August, some weakness was not surprising, but it showed that there was still an undercurrent of nervousness among investors, particularly around the withdrawal or reduction of central bank support.

“With Delta cases still rising and hints of renewed restrictions as summer turns to autumn, equities look vulnerable to further losses.

“UK stocks are reflecting some concerns about economic growth this afternoon too, as the market frets that the rise in National Insurance will hit consumer spending, and activity in areas like the housing market,” Beauchamp added.

“Housebuilders, banks and REITs are sitting at the bottom of the FTSE 100, although the declines are more contained than those on the continent, where indices have fallen much further into the red.”

In equity markets, housebuilders were among the worst performers, with Taylor Wimpey down 3.83%, Barratt Developments losing 3.44%, and Persimmon 4.03% weaker.

On the upside, B&M European Value Retail surged 6.92% after the discount retailer said it expects interim core earnings to be ahead of analysts’ forecasts on the back of stronger gross margins.

Smiths Group rose 2.57% after agreeing to sell its medical business to US-based ICU Medical for $2.4bn, withdrawing its support for a rival $2bn offer from TA Associates agreed last month.

Homewares retailer Dunelm also gained, leaping 12.83% after it said 2022 full-year profits would be "modestly" ahead of expectations as it posted a strong rise in 2021 earnings, driven by online sales during the Covid pandemic.

Wm Morrison was in focus, rising 0.45% as it said it is in talks with the Takeover Panel about launching an auction process for the supermarket chain after Fortress Investment Group and Clayton Dubilier & Rice failed to declare their bids final.

Market Movers

FTSE 100 (UKX) 7,095.53 -0.75%
FTSE 250 (MCX) 23,848.89 -1.03%
techMARK (TASX) 4,758.25 -1.10%

FTSE 100 - Risers

B&M European Value Retail S.A. (DI) (BME) 578.00p 6.92%
Smiths Group (SMIN) 1,459.00p 2.57%
National Grid (NG.) 946.80p 1.89%
Severn Trent (SVT) 2,838.00p 1.21%
Rentokil Initial (RTO) 589.80p 1.10%
Unilever (ULVR) 4,023.50p 0.84%
Halma (HLMA) 3,036.00p 0.40%
Rolls-Royce Holdings (RR.) 111.26p 0.34%
SSE (SSE) 1,630.50p 0.28%
Coca-Cola HBC AG (CDI) (CCH) 2,593.00p 0.23%

FTSE 100 - Fallers

Persimmon (PSN) 2,717.00p -4.03%
Taylor Wimpey (TW.) 169.30p -3.83%
Land Securities Group (LAND) 708.00p -3.52%
Barratt Developments (BDEV) 687.40p -3.44%
Berkeley Group Holdings (The) (BKG) 4,527.50p -2.80%
Melrose Industries (MRO) 184.30p -2.69%
Mondi (MNDI) 2,023.00p -2.57%
British Land Company (BLND) 523.00p -2.53%
Royal Mail (RMG) 483.50p -2.42%
Compass Group (CPG) 1,442.50p -2.40%

FTSE 250 - Risers

Dunelm Group (DNLM) 1,445.00p 12.83%
Hochschild Mining (HOC) 160.90p 3.87%
AO World (AO.) 240.20p 3.34%
Capita (CPI) 49.11p 2.63%
Restaurant Group (RTN) 123.00p 2.33%
Liontrust Asset Management (LIO) 2,485.00p 2.05%
JTC (JTC) 789.00p 1.81%
Diversified Energy Company (DEC) 111.80p 1.64%
Dixons Carphone (DC.) 138.00p 1.55%
easyJet (EZJ) 791.20p 1.41%

FTSE 250 - Fallers

Inchcape (INCH) 865.50p -6.97%
Big Yellow Group (BYG) 1,477.00p -5.80%
Biffa (BIFF) 381.00p -5.69%
Micro Focus International (MCRO) 403.80p -5.41%
Vistry Group (VTY) 1,163.50p -5.31%
Safestore Holdings (SAFE) 1,114.00p -4.70%
Virgin Money UK (VMUK) 198.25p -4.62%
Harbour Energy (HBR) 367.40p -4.52%
Workspace Group (WKP) 900.00p -4.36%
Hammerson (HMSO) 33.53p -4.25%