London midday: FTSE dips into the red as investors mull construction data

(Sharecast News) - London stocks had dipped into the red by midday on Monday as investors mulled an uninspiring reading on the UK construction sector, but easyJet powered ahead as it agreed to a sweetened takeover approach from private equity firm Castlelake.

The FTSE 100 was down 0.2% at 10,663.40, reversing earlier gains.

Susannah Streeter, chief investment strategist at Wealth Club, said there was "little on the economic calendar to fully jolt markets awake".

"The big driver of sentiment on markets this week is likely to be the release of the Federal Reserve's Open Market Committee minutes on Wednesday, which could offer fresh insight into attitudes towards interest rates," she said. "Last week's weaker-than-expected US jobs data has already dampened expectations for multiple rate hikes. Oil prices have settled back towards their pre-Iran conflict levels, raising hopes that the knock-on effects of the energy shock may prove less severe than initially feared."

On home shores, a survey showed the downturn in the construction sector eased slightly in June.

The S&P Global UK construction purchasing managers' index ticked up to 38.4 from a six-year low of 38.2 in May. However, it remained well below the 50.0 mark that separates contraction from expansion and construction output has now fallen every month since January 2025. The latest fall decline was the second-fastest since the start of the pandemic, S&P Global said.

Tim Moore, economics director at S&P Global Market Intelligence, said: "The downturn in UK construction output lost some intensity in June amid a softer reduction in commercial building work. House building and civil engineering activity nonetheless registered sharper declines than in May, with the latter seeing its weakest performance since the start of the pandemic.

"New work decreased to the least marked extent since March, despite widespread reports of challenging market conditions. Construction companies commented on headwinds from subdued housing sales, elevated interest rates and squeezed consumer finances, alongside cutbacks to business investment plans. Some firms noted delays with infrastructure work and fewer public sector tender opportunities, but energy markets were cited as an area of positivity."

Moore said supply chain challenges appear to have receded, with vendor delivery times lengthening to the smallest degree since March. Construction companies also reported a slowdown in input price inflation from the near four-year peak seen in May.

In equity markets, easyJet surged after saying it was ready to accept a sweetened �5.5bn takeover offer from Castlelake after the private equity group tabled a fifth offer at 690p a share. This followed four prior rejected approaches at 560p, 600p, 625p and 650p. BA and Iberia owner IAG also flew higher.

Streeter said: "The latest proposal of 690p a share represents a substantial premium to where the shares were trading before takeover interest emerged and suggests Castlelake has finally reached a price the board believes better reflects the airline's longer-term value.

"The deal remains subject to a formal offer and regulatory approvals, but if completed it would see one of Britain's best-known brands leave the London stock market.

"EasyJet has endured a difficult few months, with the conflict in Iran unsettling consumer confidence, pushing up fuel costs and weighing on European travel demand. Those pressures depressed the airline's share price and created an opportunity that Castlelake clearly believes the market has mispriced. The private equity firm, which has deep expertise in aircraft leasing and aviation finance, appears to see long-term value in easyJet's modern fleet, strong balance sheet and growing holidays business."

ITV gained up after agreeing to sell its media and entertainment business to Comcast-owned Sky for up to �1.6bn.

High-performance computing firm Raspberry Pi advanced after saying it has tapped Tim Powell to take over as chief financial officer, succeeding Richard Boult with effect from 16 October. The company said Powell brings over 20 years' leadership experience across public companies.

Close Brothers was knocked lower by a downgrade to 'sector perform' from 'outperform' at RBC Capital Markets, which slashed its price target to 470p from 625p.

Ocado fell as it said that founder and chief executive Tim Steiner will step down in 2028. Following the appointment of a successor, Steiner will transition into a founder role, Ocado said.

Market Movers

FTSE 100 (UKX) 10,663.40 -0.15%

FTSE 250 (MCX) 23,524.39 -0.06%

techMARK (TASX) 6,038.92 0.12%

FTSE 100 - Risers

St James's Place (STJ) 1,338.50p 2.76%

Relx plc (REL) 2,396.00p 2.66%

Barratt Redrow (BTRW) 286.40p 2.57%

Experian (EXPN) 2,705.00p 2.31%

London Stock Exchange Group (LSEG) 8,820.00p 1.85%

BAE Systems (BA.) 2,014.00p 1.82%

International Consolidated Airlines Group SA (CDI) (IAG) 484.00p 1.70%

Abrdn (ABDN) 262.40p 1.55%

IG Group Holdings (IGG) 1,885.00p 1.18%

Pearson (PSON) 1,236.50p 1.14%

FTSE 100 - Fallers

Halma (HLMA) 3,910.00p -2.69%

Fresnillo (FRES) 2,854.00p -2.19%

Airtel Africa (AAF) 336.40p -2.04%

Associated British Foods (ABF) 1,918.50p -1.92%

Diploma (DPLM) 7,060.00p -1.88%

IMI (IMI) 2,882.00p -1.84%

Games Workshop Group (GAW) 20,740.00p -1.61%

Spirax Group (SPX) 6,660.00p -1.55%

Centrica (CNA) 170.55p -1.47%

Whitbread (WTB) 2,376.00p -1.41%

FTSE 250 - Risers

easyJet (EZJ) 612.40p 10.55%

Baltic Classifieds Group (BCG) 181.00p 4.62%

WPP (WPP) 259.90p 3.91%

IntegraFin Holding (IHP) 387.00p 3.33%

Oxford Nanopore Technologies (ONT) 124.10p 3.07%

Pagegroup (PAGE) 117.70p 2.52%

Raspberry PI Holdings (RPI) 868.50p 2.48%

Man Group (EMG) 306.20p 2.34%

Playtech (PTEC) 322.60p 2.15%

Diversified Energy Company (DI) (DEC) 1,048.00p 2.14%

FTSE 250 - Fallers

Close Brothers Group (CBG) 401.00p -9.50%

Ocado Group (OCDO) 177.90p -3.48%

Discoverie Group (DSCV) 661.00p -3.22%

Hansa Investment Company Limited (DI) (HAN) 326.00p -2.98%

Harworth Group (HWG) 123.20p -2.84%

Wickes Group (WIX) 188.40p -2.79%

Renishaw (RSW) 4,902.00p -2.77%

Genuit Group (GEN) 268.80p -2.75%

Oxford Instruments (OXIG) 3,016.00p -2.65%

Drax Group (DRX) 753.00p -2.59%