London close: Stocks slip on relatively quiet Monday

(Sharecast News) - London's stock markets closed in the red today, with trading activity subdued as US markets remained closed for the Labor Day holiday. The FTSE 100 index fell by 0.15%, ending the day at 8,363.84 points, while the more domestically-focussed FTSE 250 saw a steeper decline of 0.5%, closing at 20,980.51 points.

In currency markets, sterling was last up 0.09% on the dollar, trading at $1.3139, while it slipped 0.06% against the euro to change hands at €1.1875.

"In London, the FTSE 100 hovers near the lows of the day, as European markets drift as per usual on a US holiday," said IG chief market analyst Chris Beauchamp.

"August ended with stock markets shrugging off their early-month weakness, a remarkable recovery from the panic-like conditions that briefly prevailed four weeks ago."

Beauchamp added that all eyes were on the US non-farm payrolls report later in the week, although there was "a limited likelihood" that markets were in for "another dire number".

"Instead, a higher revision to last month's figure could see the prospect of a US recession being pushed back once again."

UK manufacturing activity grows, eurozone still struggling

In economic news, UK manufacturing activity grew at its fastest pace in over two years in August, according to a survey released earlier.

The S&P Global manufacturing purchasing managers' index (PMI) increased to 52.5 from 52.1 in July, marking a 26-month high.

That rise was consistent with the preliminary flash estimate, confirming that the sector had expanded in five out of the past six months.

A PMI reading above 50 indicates expansion, while a reading below signifies contraction.

Rob Dobson, director at S&P Global Market Intelligence, said the upturn was broad-based across manufacturing, with the investment goods sector the standout performer.

"The upturn continues to be driven by the domestic market, which is helping to compensate for lost export orders," he said.

"The trend in export orders is a key cause for concern, with new business from overseas having fallen continuously since early in 2022.

"UK manufacturers are experiencing difficulties in securing new contract wins overseas due to weaker demand from Europe, a slowdown in mainland China, freight delays, competitiveness issues, high shipping costs, global conflicts and political uncertainty."

In contrast, the eurozone's manufacturing sector continued to struggle, with its PMI remaining below the neutral 50-point threshold for the 26th consecutive month.

The Hamburg Commercial Bank (HCOB) eurozone manufacturing PMI, also compiled by S&P Global, was revised slightly upward to 45.8 for August, matching the figures from June and July, but still indicating contraction.

"Overall new order inflows fell at the sharpest rate in 2024 so far, leading retrenchment efforts to continue as manufacturers reduced input purchasing, employment and inventories. In addition, business confidence slipped to a five-month low," HCOB said.

Meanwhile, China's manufacturing sector showed signs of recovery, with activity returning to growth in August.

The Caixin manufacturing PMI rose to 50.4 from 48.8 in July, surpassing expectations of 50.0.

It marked a positive shift for the sector, indicating expansion after a period of contraction.

Wang Zhe, economist at Caixin Insight Group, said growth was "limited", however.

"Considering the government's ambitious annual economic growth target, the challenges and difficulties in stabilising growth over the coming months will be substantial," he added.

Over the weekend, data from the National Bureau of Statistics showed that the official manufacturing PMI fell to 49.1 in August from 49.4 the month before.

Rightmove jumps on possible REA Group offer, Kainos sinks

On London's equity markets, shares in Rightmove surged 27.43% following confirmation from Australia's REA Group that it was considering a potential cash and share offer for the UK property platform.

REA Group, majority-owned by News Corp, acknowledged "clear similarities" between the two companies but clarified that no approach or discussions had yet taken place with Rightmove regarding a possible deal.

Elsewhere, Barratt Developments saw its shares rise by 3.12% after UBS upgraded the stock to 'buy' from 'neutral' and raised the price target to 630p from 610p.

Meanwhile, Bodycote shares increased by 0.96% after Berenberg initiated coverage on the company with a 'buy' rating.

On the downside, Kainos Group shares plummeted by 14.09%.

The IT services provider warned that full-year revenues are expected to fall below market expectations due to a challenging trading environment, as clients delay project decisions.

Despite that, Kainos stated that adjusted pre-tax profit remains in line with consensus estimates.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,363.84 -0.15% FTSE 250 (MCX) 20,980.51 -0.50% techMARK (TASX) 4,923.35 -0.32%

FTSE 100 - Risers

LondonMetric Property (LMP) 204.00p 2.56% Entain (ENT) 646.00p 2.22% Flutter Entertainment (DI) (FLTR) 16,200.00p 2.05% Land Securities Group (LAND) 629.50p 2.03% Severn Trent (SVT) 2,571.00p 1.54% Unite Group (UTG) 957.50p 1.32% SEGRO (SGRO) 871.20p 1.28% Antofagasta (ANTO) 1,853.00p 1.26% Ashtead Group (AHT) 5,398.00p 1.24% Vistry Group (VTY) 1,359.00p 1.04%

FTSE 100 - Fallers

Fresnillo (FRES) 541.50p -2.34% Whitbread (WTB) 2,885.00p -1.77% Intermediate Capital Group (ICG) 2,126.00p -1.67% Anglo American (AAL) 2,209.00p -1.34% BP (BP.) 429.40p -1.23% Burberry Group (BRBY) 667.80p -1.18% Shell (SHEL) 2,681.00p -1.11% Relx plc (REL) 3,539.00p -1.09% Smith (DS) (SMDS) 468.00p -1.06% easyJet (EZJ) 475.10p -0.86%

FTSE 250 - Risers

Close Brothers Group (CBG) 544.00p 3.23% Rathbones Group (RAT) 1,886.00p 2.95% British Land Company (BLND) 411.20p 2.75% W.A.G Payment Solutions (WPS) 68.00p 2.72% RHI Magnesita N.V. (DI) (RHIM) 3,305.00p 2.64% Shaftesbury Capital (SHC) 147.00p 2.44% Trustpilot Group (TRST) 213.50p 2.40% Pennon Group (PNN) 603.50p 2.20% Premier Foods (PFD) 179.40p 1.93% Grafton Group Ut (CDI) (GFTU) 1,079.40p 1.93%

FTSE 250 - Fallers

SSP Group (SSPG) 169.60p -2.86% Diversified Energy Company (DEC) 904.50p -2.85% Senior (SNR) 164.60p -2.60% Allianz Technology Trust (ATT) 346.50p -2.39% Patria Private Equity Trust (PPET) 565.00p -2.29% Drax Group (DRX) 638.50p -2.22% Auction Technology Group (ATG) 416.50p -2.12% Energean (ENOG) 972.50p -2.11% PureTech Health (PRTC) 163.00p -1.93% 4Imprint Group (FOUR) 5,270.00p -1.86%