London close: Markets give up gains to finish lower

(Sharecast News) - London stocks ended Wednesday's session in negative territory as the impact of recent Chinese stimulus measures waned.

The FTSE 100 index slipped 0.17% to close at 8,268.70 points, while the FTSE 250 edged down 0.07% to 20,755.44 points.

In currency markets, sterling was last down 0.47% on the dollar, trading at $1.3350, as it 0.28% against the euro to change hands at €1.1965.

"UK shares were mixed on Wednesday, reversing gains from the previous session, as investors questioned whether the optimism over extensive stimulus measures in China was excessive," said Patrick Munnelly at TickMill.

"The blue-chip FTSE 100 was rotating around the flatline into the close.

"It rose 0.3% in the previous session, amid a global rally after China released their biggest set of stimulus measures since the Covid-19 pandemic."

Munnelly said the optimism faded, however, as market observers questioned whether the scope of proposed measures was enough to address deep-rooted issues in China and spark a sustained resurgence in consumer and industrial demand.

"Even China's central bank reducing its medium-term loan rate on Wednesday did little to lift sentiment again."

OECD raises UK growth forecasts, Riksbank cuts key interest rate

In economic news, the Organisation for Economic Cooperation and Development (OECD) revised its growth forecast for the UK, projecting stronger economic performance than several other G7 countries.

The UK was now expected to be the second fastest-growing economy among the group this year, trailing only the United States.

The OECD raised its 2024 growth estimate for the UK to 1.1%, up from the 0.4% forecast in May, following the country's recovery from a mild recession in late 2022.

Its outlook for 2025 remains unchanged at 1.2%.

The improved forecast was attributed to robust consumer spending fueled by higher wages and easing inflation.

However, business investment continues to lag, reflecting ongoing uncertainty in the economic environment.

Despite the upward revision in growth expectations, the UK was still predicted to have the highest inflation rate among G7 nations.

Inflation, which was 2.2% in August, was projected to average 2.7% in 2024 and stay elevated at 2.4% in 2025, posing challenges for households already burdened by the high cost of living.

Globally, the OECD noted signs of stabilisation as economies adjust to the aftermath of the Covid-19 pandemic and the ongoing conflict in Ukraine.

Lower inflation and easing borrowing costs are expected to support growth in most major economies.

Elsewhere, Sweden's Riksbank cut its key interest rate by 25 basis points to 3.25% on Wednesday, as anticipated.

It marked the third rate cut from the central bank this year, with further reductions expected in the coming months.

The move came as inflation in Sweden, which peaked at over 10% in 2022, had now fallen to 1.2% - well below the central bank's 2% target for three consecutive months.

Rentokil in the green, Prudential gives up recent gains

On London's equity markets, Rentokil Initial rose 4.46% following the announcement of Brian Baldwin's appointment as a non-executive director.

Baldwin, a partner at Nelson Peltz's Trian Fund Management and head of research at Trian, would join the board on 1 October.

EasyJet climbed 2.2% after JPMorgan Cazenove upgraded the stock to 'overweight', citing resilient pricing and earnings compared to its peers.

The bank highlighted a promising outlook for the low-cost carrier, projecting a strong growth trajectory into September 2025.

Flutter Entertainment surged 6.93% after announcing a $5bn share buyback.

The owner of Betfair and FanDuel also projected that its profits could more than double by 2027, with adjusted EBITDA expected to exceed $5bn.

Flutter also increased its estimates for the North American total addressable market to $70bn, with the US market accounting for $63bn of that figure.

Raspberry Pi Holdings continued its rally, gaining 6.41% after reporting better-than-expected interim results earlier in the week.

The low-cost computer maker posted a 55% rise in adjusted core earnings to $21m, with revenues up 61% to $144m, beating internal forecasts.

Mining stocks, including Hochschild Mining, Centamin and Ithaca Energy, benefited from a second round of stimulus measures announced by China, boosting investor sentiment in the sector.

On the downside, Rightmove fell 1.55% after rejecting a third takeover offer from Australia's REA Group, valued at £6.1bn.

The property marketing platform said the proposal "materially undervalued" the company, especially given REA's recent share price decline, which had effectively lowered the offer's premium.

Elsewhere, Prudential slipped 2.02%, giving back gains from the prior session as investors booked profits following a recent rally.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,268.70 -0.17% FTSE 250 (MCX) 20,755.44 -0.07% techMARK (TASX) 4,810.53 0.54%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 18,285.00p 6.93% Rentokil Initial (RTO) 376.70p 4.46% Fresnillo (FRES) 620.00p 3.51% easyJet (EZJ) 519.60p 1.88% Croda International (CRDA) 4,086.00p 1.84% Smiths Group (SMIN) 1,756.00p 1.80% Compass Group (CPG) 2,455.00p 1.74% Smurfit Westrock (DI) (SWR) 3,587.00p 1.70% Ashtead Group (AHT) 5,656.00p 1.69% London Stock Exchange Group (LSEG) 10,400.00p 1.61%

FTSE 100 - Fallers

Prudential (PRU) 642.20p -3.40% BP (BP.) 400.25p -2.41% Persimmon (PSN) 1,641.00p -2.41% Standard Chartered (STAN) 763.20p -2.18% Diageo (DGE) 2,497.50p -2.02% 3i Group (III) 3,297.00p -1.99% Lloyds Banking Group (LLOY) 58.18p -1.86% Centrica (CNA) 117.55p -1.71% Taylor Wimpey (TW.) 162.55p -1.69% Shell (SHEL) 2,532.00p -1.56%

FTSE 250 - Risers

Raspberry PI Holdings (RPI) 389.60p 4.96% PureTech Health (PRTC) 147.60p 4.09% Watches of Switzerland Group (WOSG) 422.80p 4.04% Endeavour Mining (EDV) 1,904.00p 3.14% Hammerson (HMSO) 31.74p 2.92% Ithaca Energy (ITH) 108.00p 2.86% BH Macro Ltd. GBP Shares (BHMG) 378.00p 2.86% Centamin (DI) (CEY) 157.70p 2.47% Dr. Martens (DOCS) 54.90p 2.43% Helios Towers (HTWS) 115.60p 2.30%

FTSE 250 - Fallers

4Imprint Group (FOUR) 4,875.00p -5.89% Just Group (JUST) 135.80p -4.23% SThree (STEM) 359.50p -4.13% Harworth Group (HWG) 184.00p -3.41% Domino's Pizza Group (DOM) 293.20p -3.23% Essentra (ESNT) 146.20p -2.79% Senior (SNR) 149.00p -2.49% Close Brothers Group (CBG) 409.00p -2.43% Bellway (BWY) 3,072.00p -2.41% Aston Martin Lagonda Global Holdings (AML) 156.30p -2.25%