London close: Stocks finish higher ahead of inflation data

Investors were also digesting dovish remarks from the Bank of England's Deputy Governor and looking ahead to crucial inflation data due later this week.

The FTSE 100 edged up 0.05% to close at 8,424.20, while the FTSE 250 gained 0.59%, finishing at 20,873.33.

In currency markets, sterling was last up 0.02% on the dollar to trade at $1.2704, while it advanced 0.04% against the euro, changing hands at €1.1691.

“The triumphant advance of the FTSE 100 to its current record high has given way to dull, range-bound trading as upward momentum exhausts itself,” said IG chief market analyst Chris Beauchamp.

“Having gained over 8% in a month, the index now faces a tougher task, namely that of holding on to the ground won.

“Latecomers to the rally need to be wary; strong gains from February into April were followed up by a very choppy period, one that could easily recur.”

Beauchamp added that the last of the big-name earnings across the pond was due this week, with Nvidia “just a short hop away” from the $1,000-per-share level.

“The past 20 years have seen the company’s stock pop into the end of May, and a surge to the next big round number would put the seal on an astonishing run for the chipmaker.”

BoE deputy governor stirs rate cut hopes, house prices rise further

In economic news, Bank of England deputy governor Ben Broadbent suggested earlier that an interest rate cut could be on the horizon this summer if current economic trends persisted.

Broadbent indicated that if forecasts held true, suggesting a need for less restrictive policy, a rate reduction could occur in the coming months.

He highlighted ongoing challenges with “persistent, second-round effects” from the initial inflation surge.

The Bank of England expected the inflationary environment to ease asymmetrically, taking longer to diminish than it did to emerge.

Strong wage growth remained a significant factor, although UK businesses were reportedly less able to pass on higher costs to consumers compared to 2023, which could limit inflationary pressures from rising wages.

Real incomes in the UK had shown recovery in 2024, potentially reducing the demand for higher wages as the economic situation normalised.

“The more that's regained, the less ground, relative to some notional 'norm', there is to make up,” Broadbent remarked.

His comments came ahead of the release of April's inflation figures on Wednesday.

Elsewhere, the average UK house price reached a new peak of £375,131 in May, according to data from property marketing platform Rightmove.

The record was driven by pent-up demand and momentum from the spring selling season.

House prices increased by 0.8% in May, following a 1.1% rise in April, while annually, prices were up 0.6% in May after a 1.7% increase in the previous month.

Rightmove attributed the rise in home-mover activity to would-be buyers who had postponed their plans last year, despite mortgage rates remaining higher than anticipated.

The pent-up demand had been a key driver in the housing market's recent performance.

“Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the Base Rate up to 5.25%, where it has remained since August 2023,” said Tim Bannister, Rightmove’s director of property science.

“However, the momentum of the spring selling season has exerted enough upwards price pressure to reach a new record asking price.

“The top-of-the-ladder sector is still leading the way, while from a regional perspective the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth.”

Miners underpin gains, Keywords surges on takeover potential

On London’s equity markets, precious metals miners Fresnillo and Hochschild Mining were up 4.72% and 1.79%, respectively, as gold prices hit new record highs.

“Gold hit a fresh all-time high and silver jumped to $32, its highest in 11 years,” said Neil Wilson, chief market analyst at Finalto.

“Expectations the Fed will cut rates soon is helping but real rates are nothing like as low as they once were.

“There is a clear geopolitical premium since 7 October and the death of the Iranian president may have driven some news-flow-based trade - bound to be some of that involved overnight.”

Copper prices also boosted the mining sector, with Antofagasta up by 1.18% and Glencore climbing 0.95%.

Kainos Group jumped 17.33% after reporting an increase in full-year profit and revenue, coupled with a positive outlook.

Hilton Food Group inched up 0.21%, after reporting strong year-to-date trading, higher volumes and sales, and continued momentum in its UK seafood operations.

Ascential shares rose by 5.75%, reversing earlier losses following a share consolidation.

In the airline sector, easyJet fell by 2.91% after Ryanair's report of higher annual profits, which included a warning about softer-than-anticipated summer airfares.

Ryanair itself dropped 1.48% in London, despite posting a 34% increase in profit after tax and a 25% revenue jump for the year ended 30 March.

Imperial Brands dipped 0.71%, after Jefferies raised its target price on the shares following strong first-half results, but maintained a 'hold' rating, citing growing pressures on the company.

Outside the FTSE 350, Keywords Studios surged by 55.24%.

The company announced it was “minded to accept” a £2.2bn takeover proposal from Swedish private equity firm EQT Partners, representing a 73% premium to its closing share price on Friday.

Keywords confirmed it was in “advanced discussions” with EQT Group about a possible cash offer of 2,550p per share, following weekend press speculation.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,424.20 0.05%
FTSE 250 (MCX) 20,873.33 0.59%
techMARK (TASX) 4,809.74 0.60%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 436.80p 4.47%
Fresnillo (FRES) 639.50p 3.98%
Entain (ENT) 745.80p 3.30%
Weir Group (WEIR) 2,184.00p 3.02%
Airtel Africa (AAF) 122.10p 2.43%
Ashtead Group (AHT) 5,876.00p 1.94%
JD Sports Fashion (JD.) 123.80p 1.89%
Melrose Industries (MRO) 619.00p 1.48%
Rightmove (RMV) 556.80p 1.46%
Intermediate Capital Group (ICG) 2,294.00p 1.41%

FTSE 100 - Fallers

easyJet (EZJ) 474.90p -3.24%
Burberry Group (BRBY) 1,067.00p -3.00%
Ocado Group (OCDO) 354.30p -2.42%
Sage Group (SGE) 1,086.50p -1.76%
Prudential (PRU) 805.20p -1.71%
Beazley (BEZ) 665.50p -1.55%
BT Group (BT.A) 132.25p -1.49%
Frasers Group (FRAS) 817.00p -1.33%
Imperial Brands (IMB) 1,939.50p -1.32%
United Utilities Group (UU.) 1,093.50p -1.31%

FTSE 250 - Risers

Kainos Group (KNOS) 1,246.00p 17.33%
W.A.G Payment Solutions (WPS) 74.60p 10.68%
Syncona Limited NPV (SYNC) 114.80p 6.69%
Carnival (CCL) 1,141.50p 5.84%
Dunelm Group (DNLM) 1,067.00p 5.43%
Auction Technology Group (ATG) 612.00p 5.14%
Close Brothers Group (CBG) 505.00p 4.60%
PureTech Health (PRTC) 228.50p 3.86%
Victrex plc (VCT) 1,350.00p 3.69%
Moonpig Group (MOON) 161.40p 3.33%

FTSE 250 - Fallers

Ascential (ASCL) 340.95p -37.79%
Octopus Renewables Infrastructure Trust (ORIT) 69.70p -2.52%
Premier Foods (PFD) 172.00p -2.38%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 79.90p -2.20%
Grainger (GRI) 253.00p -1.94%
TI Fluid Systems (TIFS) 138.80p -1.84%
Coats Group (COA) 87.20p -1.80%
Target Healthcare Reit Ltd (THRL) 80.60p -1.59%
Tritax Big Box Reit (BBOX) 163.00p -1.33%
Lancashire Holdings Limited (LRE) 622.00p -1.27%