London midday: Stocks fall after UK services data

(Sharecast News) - London stocks had fallen into the red by midday on Friday after a survey showed the UK private sector shrank again in June, with trading quieter than usual due to the Independence Day holiday in the US.

The FTSE 100 was down 0.3% at 10,621.38, having opened higher following solid gains in the previous session, after Thursday's weaker-than-expected non-farm payrolls report tempered rate hike expectations.

Stocks turned lower, however, as data showed that activity in the service sector fell in June to the greatest extent for nearly three-and-a-half years. The S&P Global UK services PMI dipped to 48.8 from 49.3 in May, remaining below the 50.0 mark that separates contraction from expansion.

Tim Moore, economics director at S&P Global Market Intelligence, said: "Strong cost pressures, lacklustre demand and business uncertainties arising from the Middle East conflict were the most prominent themes highlighted by service sector firms in June. This led to fragile investment sentiment, elevated risk aversion among clients and squeezed consumer budgets, which in turn contributed to the fastest reduction in new work for just over three-and-a-half years.

"There was better news on the inflation front, as the latest increase in input prices was the slowest since March and well below April's recent peak. This was largely due to lower fuel prices, but there were still many reports of suppliers passing on higher transport, wage and raw material costs in June. "Service sector business optimism improved since May, but remained much softer than at the start of 2026. The marginal uplift in confidence was supported by hopes of a durable US-Iran ceasefire agreement and positivity towards business development plans. However, many firms noted worries about broader UK economic prospects."

UK corporate news was scare, but precious metals miner Fresnillo and gold miner Hochschild both shone as gold and silver prices rose.

Dan Coatsworth, head of markets at AJ Bell, said: "The precious metal had a disappointing time in the first half of the year and recently dipped below $4,000 as investors were tempted away by attractive yields on bonds and lapped up stocks as the AI boom carried on. Gold has today rebounded, trading just below $4,200 per ounce and taking the likes of Fresnillo and other gold miners along for the ride.

"Yesterday's US jobs data pointed to a softer labour market which has raised hopes that the Fed won't put up interest rates. The shift in rate expectations led to a drop in US Treasury yields, meaning the opportunity on fixed income was slightly diminished and thereby dampening one of the drivers that's taken money away from gold this year. Investors might have seen this market shift and decided it was time to add back some more gold."

Close Brothers shot up after an upgrade to 'buy' from 'hold' at Shore Capital, which lifted the price target to 495p from 490p as it pointed to favourable risk versus reward.

Harbour Energy was in focus after founder EIG said it had sold its remaining stake in the oil company via a secondary placing of 54.77 million shares to institutional investors by way of an accelerated bookbuild. The 3.5% stake was placed at 205p a share with gross proceeds of �112m.

Market Movers

FTSE 100 (UKX) 10,621.38 -0.30%

FTSE 250 (MCX) 23,483.26 0.28%

techMARK (TASX) 6,025.80 -0.17%

FTSE 100 - Risers

St James's Place (STJ) 1,308.50p 2.55%

Weir Group (WEIR) 2,496.00p 2.13%

ICG (ICG) 1,773.00p 2.01%

Melrose Industries (MRO) 502.60p 1.92%

Fresnillo (FRES) 2,927.00p 1.49%

Smiths Group (SMIN) 2,625.00p 1.39%

Abrdn (ABDN) 257.00p 1.34%

Metlen Energy & Metals (MTLN) 42.41p 1.29%

SSE (SSE) 2,493.00p 1.26%

Flutter Entertainment (DI) (FLTR) 7,874.00p 0.97%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 165.50p -2.27%

Tesco (TSCO) 466.20p -1.60%

Diageo (DGE) 1,513.00p -1.59%

Games Workshop Group (GAW) 21,100.00p -1.58%

Unilever (ULVR) 4,573.00p -1.52%

Sainsbury (J) (SBRY) 332.70p -1.33%

Next (NXT) 14,470.00p -1.30%

Reckitt Benckiser Group (RKT) 5,060.00p -1.29%

Bunzl (BNZL) 2,638.00p -1.27%

Marks & Spencer Group (MKS) 381.20p -1.27%

FTSE 250 - Risers

Bridgepoint Group (Reg S) (BPT) 298.80p 6.34%

Close Brothers Group (CBG) 430.00p 5.50%

Ashmore Group (ASHM) 219.20p 3.20%

IntegraFin Holding (IHP) 385.50p 2.93%

Pan African Resources (PAF) 104.20p 2.76%

RHI Magnesita N.V. (DI) (RHIM) 2,835.00p 2.70%

Schroder Asia Pacific Fund (SDP) 853.00p 2.40%

Renishaw (RSW) 5,025.00p 2.38%

Quilter (QLT) 202.60p 2.37%

Kier Group (KIE) 225.20p 2.37%

FTSE 250 - Fallers

Baltic Classifieds Group (BCG) 178.80p -5.08%

Wizz Air Holdings (WIZZ) 1,185.00p -3.11%

Oxford Nanopore Technologies (ONT) 119.60p -2.99%

Bytes Technology Group (BYIT) 397.40p -2.69%

Harbour Energy (HBR) 211.40p -2.31%

PPHE Hotel Group Ltd (PPH) 1,622.00p -2.17%

Aston Martin Lagonda Global Holdings (AML) 38.24p -2.15%

easyJet (EZJ) 545.60p -2.11%

Kainos Group (KNOS) 787.00p -1.87%

Oxford Biomedica (OXB) 633.00p -1.71%