Stocks in London finished largely higher on Monday, while the FTSE 100 ended in the red, hurt by a disappointing growth outlook from China which knocked its mining stocks.
The FTSE 100 index closed down 17.32 points, 0.2%, at 7,929.79. The FTSE 250 closed up 138.34 points, 0.7%, at 20,064.11, and the AIM All-Share closed up just 0.34 of a point, at 865.31.
The Cboe UK 100 ended down 0.3% at 793.30, the Cboe UK 250 closed up 0.5% at 17,572.13, and the Cboe Small Companies ended marginally higher at 14,161.43.
Construction activity picked up in the UK during February, as a rebound in commercial work offset a continued decline in housebuilding.
The S&P Global/CIPS UK construction purchasing managers’ index rose to 54.6 points in February, from 48.4 in January.
Crossing over the 50-point no-change mark, it shows the sector saw a strong expansion in activity during the month. The reading was the highest since May last year, and well ahead of market consensus of 48.5, as cited by FXStreet.
The pound was quoted at $1.2031 at the London equities close Monday, up compared to $1.1979 at the close on Friday.
In contrast, the eurozone’s construction sector contracted further in February, but at a slower pace than in January. The eurozone’s construction PMI rose to 47.6 points in February from 46.1 in January.
S&P Global cited ongoing elevated prices and tightening financial conditions for the contraction, ‘with building firms having faced ultra-high rates of input price inflation over the past two years’, according to Phil Smith, economics associate director at S&P Global Market Intelligence.
The latest result signals the smallest monthly reduction in overall construction activity for eight months.
In European equities on Monday, the CAC 40 in Paris ended up 0.4%, while the DAX 40 in Frankfurt ended up 0.5%. The euro stood at $1.0678, up against $1.0601 at the same time on Friday.
On the FTSE 100, London miners were not performing well at close. Anglo American lost 3.7%, Glencore was down 3.9%, and Rio Tinto shed 2.8%. This is a reversal of last week, when a 1.2% five-day rise for the FTSE 100 was largely thanks to the same mining stocks.
On Monday, the miners were hit by a prediction by Chinese Premier Li Keqiang that the Chinese economy will grow by ‘around 5%’ this year. This is down from last year’s growth target of 5.5%.
Not just a powerhouse of the global economy, China is a major buyer of commodities, so the outlook for demand now looks gloomier than expected.
Brent oil was quoted at $85.90 a barrel at midday in London on Monday, up from $85.34 late Friday. Gold was quoted at $1,850.32 an ounce, higher against $1,845.56.
In the FTSE 250, Aston Martin jumped 15% as Jefferies raised the target price for the stock to 160p from 120p. Jefferies maintained its ’underperform’ rating.
Last Wednesday, the luxury carmaker hailed its ‘strongest order book in many years’ and closed off 2022 with a good final quarter, setting off a series of price target hikes by analysts.
Clarkson was up 1.8%, after it raised its shareholder payout for the 20th year in a row.
In 2022, the London-based integrated shipping services provider said revenue jumped by 36% to £603.8 million from £443.3 million, driven mainly by the Broking division.
Pretax profit increased by 45% to £100.1 million from £69.1 million, as operating profit rose to £582.0 million from £426.8 million a year ago.
The firm increased its final dividend by 12% to 64 pence per share from 57p, resulting in a full-year payout of 93p per share, up 11% from 84p a year prior.
Peel Hunt Analyst Alexander Paterson said these results were ahead of its expectations of revenue at £602.4 million and pretax profit at £98.3 million. Paterson also expected the dividend to be 90p per share.
Liberum analyst Gerald Khoo said Clarkson also beat its expectations. ‘The results for the year to December 2022 were modestly ahead of our forecasts, by 3% at the PBT level and by 7% at the EPS level,’ Khoo noted.
Chief Executive Officer Andi Case said: ‘2022 was a record year for Clarksons... Whilst the global geo-political outlook for 2023 and beyond remains uncertain, the strength of business and balance between supply and demand, supported by our record level of forward order book, gives us confidence in the outlook for Clarksons.’
On AIM, Amur Minerals surged 59%.
The Russia-focused nickel copper sulphide exploration company said it has completed the disposal of its interest in the Kun-Manie nickel copper sulphide project in Russia to Bering Metals for $35 million.
As a result of the disposal, Amur said it intends to pay a special dividend of 1.8 pence per share to shareholders within 90 days of the receipt of the consideration.
Chief Executive Robin Young says: ‘The completion of the disposal and the receipt of funds will be a positive outcome for both the company and its shareholders. We are pleased to have achieved the sale of Kun-Manie which will enable the company to move forward in a new direction, which we envision will result in shareholders seeing real value.’
Plexus jumped 59% after it secured an order for its wellhead equipment and sealing technology for a specialised project application.
The West Sussex-based engineering services provider company said under the £5 million contract, its POS-GRIP ‘HG’ equipment and technology will be deployed over the next 12 months.
About £2.5 million will be received via milestone payments in the current financial year ending June 30, with the remainder to be recognised as sales revenue in financial 2024.
Plexus Chief Executive Officer Been van Bilderbeek said the contract ‘significantly increases the visibility of our future revenue and cash flow projections, and Plexus’ reputation as a ’can do‘ surface or subsea equipment solutions provider.
Meanwhile, Pantheon Resources lost 43%.
It reported that its Alkaid #2 well returned to production on February 21, after weeks of sand blockage in the wellbore.
The Alaska, US-focused oil and gas company said the quantum of liquid and gas production flowing without artificial lift demonstrates good deliverability of the reservoir.
Analysts at SP Angel said: ’Today’s announcement made clear that flow rates from the Alkaid #2 horizontal well, which represents the company’s first long term production test in Alaska, were not compromised by a sand blockage across about 1,000 feet of the 5,000ft lateral, thereby calling into question management’s understanding of the reservoir.‘
Stocks in New York were higher at the London equities close, with the DJIA up 0.3%, the S&P 500 index up 0.6%, and the Nasdaq Composite up 0.9%.
Against the yen, the dollar was trading at JP¥135.98, down compared to JP¥136.21 late Friday.
The week ahead will be a consequential one for US economic data and monetary policy guidance.
Before the key US jobs report on Friday, Federal Reserve Chair Jerome Powell will testify before Congress on Tuesday and Wednesday. Powell’s comments come two weeks before the US central bank’s next policy decision. The next Federal Open Market Committee meeting is on March 21 and 22.
In Tuesday’s UK corporate calendar, industrial equipment rental company Ashtead Group will announce in third quarter results. Foxtons and IWG will announce their full-year results.
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