London close: Stocks nudge lower despite mining strength

(Sharecast News) - London stocks ended a touch lower on Wednesday despite strength in the heavily-weighted mining sector.

The FTSE 100 closed down 0.1% at 9,692.07 - the third consecutive session of losses.

Laith Khalaf, head of investment analysis at AJ Bell, said: "The stock market seems to be playing it cool and trading sideways for the moment, on both sides of the Atlantic. We're now firmly into December so investors might be wondering whether a Santa Rally could be on the cards. There's no real rhyme or reason as to why stocks tend to rise in December, but statistically, they do.

"This year the Santa Rally hinges on one event, and that's the upcoming Federal Reserve interest rate decision. Markets are currently pricing in an 80% chance of a US rate cut next week, and if they are disappointed by a hold or some hawkish commentary, that could spoil the Christmas party vibes.

"Concerns over frothy AI valuations haven't gone away, but the macro backdrop of falling interest rates should be supportive of the stock market, and the Fed has plenty of firepower at its disposal should any corrections start to threaten to spill over into the economy."

On home shores, a survey out earlier showed that growth in the services sector slowed in November amid weakening conditions and fragile client confidence.

The S&P Global services PMI business activity index fell to 51.3 from 52.3 in October. Still, this was above the 50.0 mark that separates contraction from expansion and higher than the flash estimate of 50.5.

A number of firms noted that uncertainty ahead of the Budget had resulted in delayed investment decisions and cautious spending patterns.

Tim Moore, economics director at S&P Global Market Intelligence, said: "November data revealed an abrupt end to the steady improvement in order books seen since the summer. Unfavourable demand conditions were signalled in both domestic and export markets. Lower workloads led to a renewed slowdown in business activity growth across the UK service economy, with the latest expansion much softer than the post-pandemic trend. Moreover, staffing numbers were trimmed to the greatest extent since February.

"Survey respondents widely commented on business challenges linked to fragile client confidence, heightened risk aversion and elevated policy uncertainty in the run up to the Budget. Many firms noted that major spending decisions had been delayed, while some also cited long-term growth headwinds from subdued investment spending.

"Intensifying price competition at home and abroad, combined with weal sales pipelines, contributed to an erosion of margins across the service economy. Input cost inflation accelerated during November, mostly driven by higher salary payments, but prices charged by service sector firms increased at the slowest pace for nearly five years."

In equity markets, Sainsbury's slumped after JPMorgan Securities said after the close on Tuesday that the Qatar Investment Authority was planning to sell up to 97.5m shares in the supermarket chain. QIA had been Sainsbury's largest shareholder, with a stake of 10.5%.

Barratt Redrow lost ground as Jefferies downgraded the shares to 'hold', saying it sees better risk/reward elsewhere in the sector.

HSBC fell as it named former KPMG partner Brendan Nelson chair. Nelson, 76, has served as interim chair since 1 October. HSBC said the accountant had been appointed following a "robust" process, with both internal and external candidates considered.

However, some City watchers had expected a more-high profile figure to fill the role.

Private hospital operator Spire Healthcare tumbled as it warned full-year earnings would come in at the bottom end of guidance, pointing to a slowdown in NHS commissioning.

Paragon Banking slid as the specialist lender reported lower-than-expected annual earnings amid what it called "stop-start" customer demand due to political uncertainties, and increased its potential liability for the car financing scandal to �25.5m.

Trainline tanked after a downgrade to 'underweight' from 'neutral' at JPMorgan, while Travis Perkins was knocked lower by a downgrade to 'underperform' at Jefferies.

On the upside, miners Glencore, Antofagasta, Anglo American and Rio Tinto all gained as copper prices rose.

Housebuilder Berkeley Group was boosted by an upgrade to 'buy' at Jefferies, while Drax powered ahead after an upgrade to 'buy' from 'neutral' at Citi.

Smiths Group rose after saying it has agreed to sell its Detection business to CVC Capital Partners for an enterprise value of �2bn as it looks to focus on premium industrial engineering. Smiths said it plans to return a large portion of the proceeds to shareholders.

Zigup surged as it said full-year profit would be "at least" at the top of the current range of expectations after a strong first half.

Market Movers

FTSE 100 (UKX) 9,692.07 -0.10%

FTSE 250 (MCX) 22,001.45 0.09%

techMARK (TASX) 5,552.86 0.36%

FTSE 100 - Risers

Glencore (GLEN) 383.10p 6.31%

Antofagasta (ANTO) 2,907.00p 4.91%

Anglo American (AAL) 2,927.00p 2.49%

Berkeley Group Holdings (The) (BKG) 3,678.00p 2.45%

Weir Group (WEIR) 2,852.00p 2.15%

Smurfit Westrock (DI) (SWR) 2,663.00p 1.76%

Rolls-Royce Holdings (RR.) 1,063.00p 1.63%

Rio Tinto (RIO) 5,504.00p 1.61%

Babcock International Group (BAB) 1,132.00p 1.52%

Diageo (DGE) 1,750.00p 1.48%

FTSE 100 - Fallers

Metlen Energy & Metals (MTLN) 42.33p -4.46%

Sainsbury (J) (SBRY) 312.40p -4.17%

NATWEST GROUP (NWG) 622.00p -2.84%

Standard Chartered (STAN) 1,660.50p -2.35%

Marks & Spencer Group (MKS) 332.50p -2.23%

Convatec Group (CTEC) 227.00p -2.16%

Haleon (HLN) 361.10p -2.09%

ICG (ICG) 2,004.00p -2.05%

Barratt Redrow (BTRW) 374.10p -2.02%

Beazley (BEZ) 769.00p -1.85%

FTSE 250 - Risers

Zigup (ZIG) 393.00p 15.42%

THG (THG) 45.90p 5.42%

Drax Group (DRX) 761.00p 4.53%

Oxford Nanopore Technologies (ONT) 131.90p 3.86%

Oxford Instruments (OXIG) 2,040.00p 3.66%

Ithaca Energy (ITH) 173.30p 3.40%

Oxford Biomedica (OXB) 628.00p 3.12%

Morgan Advanced Materials (MGAM) 206.50p 2.74%

RS Group (RS1) 601.00p 2.74%

Syncona Limited NPV (SYNC) 96.10p 2.34%

FTSE 250 - Fallers

Spire Healthcare Group (SPI) 185.80p -16.87%

Paragon Banking Group (PAG) 793.00p -6.10%

Trainline (TRN) 214.40p -5.38%

Mitchells & Butlers (MAB) 272.00p -3.72%

Frasers Group (FRAS) 723.50p -3.66%

TBC Bank Group (TBCG) 3,995.00p -2.80%

Travis Perkins (TPK) 611.00p -2.55%

Victrex plc (VCT) 655.00p -2.53%

Future (FUTR) 599.50p -2.44%

Greggs (GRG) 1,575.00p -2.42%