London close: Rolls-Royce locks in gains in mixed day for stocks
London stocks closed in a mixed state on Monday, as engine maker Rolls-Royce charged ahead following a contract win.
The FTSE 100 ended the session up 0.17% at 7,063.40, while the FTSE 250 slipped 0.001% to 23,608.63.
Sterling was in the green at the end of the day, last trading 0.23% stronger against the dollar at $1.3711, and gaining 0.46% on the euro to €1.1718.
“After starting the day in a very positive fashion, momentum for markets in Europe has tailed off, as investors look ahead to months of protracted negotiations for a new German government,” said CMC Markets chief market analyst Michael Hewson.
“The FTSE 100 appears to be lagging behind the rest of Europe’s markets although the DAX isn’t doing that much better.
“A decent performance from the likes of BP and Royal Dutch Shell is helping support the UK index, as energy prices continue to drive higher, with Brent crude prices now pushing up towards $80 a barrel.”
Hewson noted that a rise in bond yields appeared to be tempering upside progress in some parts over concerns about a more persistent inflationary environment, although at current levels they were still “deeply negative” in real terms.
“The increase in yields is helping to give financials a lift, with the banks trading higher, although we have retreated from the highs of the day.”
On the fuel crisis front, Downing Street earlier temporarily suspended competition laws as part of an effort to aid oil companies in targeting petrol stations that had run dry following days of panic buying.
With a shortage of HGV drivers causing "serious problems" at petrol stations, and more than half of UK non-motorway forecourts stating they were out of fuel, business secretary Kwasi Kwarteng met with oil companies and retailers on Sunday to address a third day of queuing for pumps.
Kwarteng agreed to temporarily exempt the industry from the Competition Act 1998 to allow companies to communicate and optimise supply.
“We have long-standing contingency plans in place to work with industry so that fuel supplies can be maintained and deliveries can still be made in the event of a serious disruption,” Kwarteng said.
“While there has always been and continues to be plenty of fuel at refineries and terminals, we are aware that there have been some issues with supply chains.”
In economic news, footfall at UK retail destinations rose last week as workers returned to the office, according to research from retail analysts Springboard.
Footfall was up 2.7% from the week before, with high streets seeing a 3.7% jump, while footfall at shopping centres and retail parks rose 2.3% and 0.9%, respectively.
In central London and large city centres outside of London, footfall was 6.5% and 6.1% higher, respectively, while the areas of central London dominated by offices saw an 8.8% increase.
However, both outer London and market towns across the UK, which have benefited from home working, saw footfall rise by just 1.5%.
“Footfall in UK retail destinations last week rose from the week before, which is the first rise in the past four weeks and a particularly positive result as footfall declined in the same week in both 2019 and 2020,” said Diane Wehrle, insights director at Springboard.
“Footfall rose in all three destination types, but by far the greatest uplift occurred in high streets, where the increase was a third higher than in shopping centres and four times as great as that in retail parks.
“High street footfall was undoubtedly supported by a shift back to the office, demonstrated by a greater uplift from the week before in central London and large city centres outside of the capital, than in smaller high streets and in outer London.”
In equity markets, Rolls-Royce jumped 11.13% after the aerospace engineer won a £1.9bn deal to supply parts for the US Air Force’s fleet of B-52 bombers for the next 30 years.
Elsewhere, Shell rose 4.36% and BP gushed 3.47% higher as oil prices rose to a near three-year high.
Prudential added 2.66% after it raised $2.4bn from its raising in Hong Kong after offering new shares in the company at HKD 143.80 (£13.51) each.
Cineworld advanced 11.88% ahead of the latest James Bond film landing in cinemas this week.
Hargreaves Lansdown analyst Susannah Streeter said the return of Bond to the screens appeared to have been the “agent of change” movie companies sorely needed.
"Business was severely shaken during the pandemic with screens shut and blockbusters delayed and there are early indications that Bond is already helping stir up a surge in much needed bookings," she said.
IWG rallied 4.39% after Sky News reported over the weekend that the serviced offices company was exploring a multibillion pound break-up that would involve splitting it into several distinct companies.
Petrofac rocketed 19.36% after the oilfield services firm looked to draw a line under a bribery probe by striking a deal with the Serious Fraud Office.
On the downside, engineer Renishaw lost 5.92% after it said full-year trading was in line with the update provided in July and hailed a strong start to the year, but announced that results for the year to the end of June would be slightly delayed.
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 147.48p 11.31%
International Consolidated Airlines Group SA (CDI) (IAG) 186.10p 5.98%
Royal Dutch Shell 'A' (RDSA) 1,596.20p 4.38%
Royal Dutch Shell 'B' (RDSB) 1,595.00p 4.36%
British Land Company (BLND) 521.60p 4.07%
Compass Group (CPG) 1,539.50p 3.81%
BP (BP.) 330.75p 3.29%
Land Securities Group (LAND) 714.00p 3.18%
Associated British Foods (ABF) 1,937.50p 2.95%
HSBC Holdings (HSBA) 385.95p 2.80%
FTSE 100 - Fallers
Experian (EXPN) 3,138.00p -4.36%
Croda International (CRDA) 8,478.00p -4.10%
Halma (HLMA) 2,923.00p -4.04%
Spirax-Sarco Engineering (SPX) 15,385.00p -3.84%
Admiral Group (ADM) 3,292.00p -3.63%
Rightmove (RMV) 693.00p -3.59%
AstraZeneca (AZN) 8,556.00p -3.27%
London Stock Exchange Group (LSEG) 7,580.00p -3.14%
Auto Trader Group (AUTO) 592.00p -3.14%
SEGRO (SGRO) 1,220.50p -2.98%
FTSE 250 - Risers
Cineworld Group (CINE) 80.02p 11.88%
Harbour Energy (HBR) 371.00p 7.66%
Capita (CPI) 52.80p 6.30%
WH Smith (SMWH) 1,804.50p 5.40%
Wizz Air Holdings (WIZZ) 5,398.00p 5.35%
National Express Group (NEX) 261.00p 5.24%
IWG (IWG) 301.00p 4.99%
Carnival (CCL) 1,766.40p 4.94%
SSP Group (SSPG) 290.60p 4.83%
TUI AG Reg Shs (DI) (TUI) 343.50p 4.76%
FTSE 250 - Fallers
Dechra Pharmaceuticals (DPH) 4,826.00p -6.65%
IMI (IMI) 1,716.00p -5.71%
Renishaw (RSW) 4,984.00p -5.70%
Darktrace (DARK) 864.00p -4.95%
888 Holdings (888) 436.60p -4.67%
Volution Group (FAN) 516.00p -4.27%
Draper Esprit (GROW) 1,058.00p -4.17%
Reach (RCH) 360.00p -3.87%
Games Workshop Group (GAW) 10,490.00p -3.41%
IntegraFin Holding (IHP) 527.00p -3.30%