Share prices in London went into Monday afternoon on the back foot, amid signs of nerves ahead of a trio of major central bank decisions this week.
London-listed housebuilding stocks, which are interest rate sensitive, were among the worst performers. Less-than-stellar housing data for Rightmove hurt investor sentiment.
Pendragon announced it has shifted gears, selling its UK motor business and leasing business.
Over in Paris, Societe Generale plunged as investors were less than impressed by its latest strategic plan.
The FTSE 100 index was down 23.25 points, 0.3%, at 7,688.13. The FTSE 250 was down 179.90 points, 1.0%, at 18,609.87, and the AIM All-Share was down 0.91 points, 0.1%, at 744.44.
The Cboe UK 100 was down 0.5% at 765.89, the Cboe UK 250 was down 1.2% at 16,213.68, and the Cboe Small Companies was down 0.2% at 13,420.57.
‘It’s a big week ahead for central bank interest rate decisions, which can understandably make investors a bit jittery,’ said AJ Bell analyst Russ Mould.
The economic calendar this week has interest rate decisions from the US Federal Reserve on Wednesday and the Bank of England on Thursday, with the Bank of Japan to follow on Friday.
The US central bank is widely expected to leave interest rates unchanged after raising them to their highest level in 22 years in July.
Meanwhile, markets are expecting a quarter point hike from the BoE as inflation has proved to be stubborn.
AJ Bell’s Mould said that ‘the big question is whether that would be the final rate hike of the current cycle’.
The pound was quoted at $1.2408 at midday on Monday in London, higher compared to $1.2401 at the equities close on Friday. The euro stood at $1.0671, virtually unchanged against $1.0672. Against the yen, the dollar was trading at JP¥147.64, lower compared to JP¥147.80.
In the FTSE 100 index, housebuilders were losing out. Persimmon was down 2.8%, Barratt Developments lost 1.5% and Taylor Wimpey shed 1.3%.
Overnight, new data pointed to continuing slow activity in the UK housing sector. The average new seller asking price in September was ‘lower than is usual’ for this time of the year, according to property portal Rightmove.
The Rightmove house price index showed the average new seller asking price increased by 0.4% month-on-month, or £1,386, in September to £366,281. On an annual basis, prices fell 0.4% in September.
Rightmove said this was the biggest drop since March 2019 and meant prices are still on track to meet its prediction of a 2% fall over the year as a whole.
Mondi rose 4.0%, after it said it has agreed to sell its most significant facility in Russia to Sezar Invest for around 80₽ billion, or about €775 million.
The disposal of Mondi Syktyvkar, the pulp and paper mill, will complete Mondi’s exit from Russia.
Mondi first announced in March last year it was assessing all options for its interests in Russia after Moscow launched an invasion of Ukraine the previous month.
Amongst London’s small-caps, Pendragon surged 25%.
The Nottingham, England-based automotive retailer said it has agreed to sell its entire UK motor business and leasing business to Lithia Motors, its North American rival.
The arm will be sold at an ‘attractive valuation’ of £250 million, Pendragon said.
Following completion of the disposal, Pendragon will operate as a stand alone Pinewood business, making it a pure-play software as a service business. It will retain its existing listing on the London Stock Exchange and change its name to Pinewood Technologies PLC.
‘It’s an interesting move and one that completely changes the investment case,’ said AJ Bell’s Mould. He described the deal as ‘a takeover with a twist’.
The transaction will require shareholder approval. If achieved, Pendragon expects completion in the final quarter of this year.
On AIM, Orcadian Energy climbed 72%.
The North Sea-focused oil and gas development company entered a non-binding heads of agreement with an unnamed North Sea operator, including a potential farm-out of its Pilot development project.
It said the potential deal would enable the two parties to progress development at Pilot field, which it says is one of the largest undeveloped discoveries in the central North Sea, with ‘significant upside potential’ in the surrounding area.
The operator will take an 81.25% interest in the P2244 license, and become operator of the development.
In European equities on Monday, the CAC 40 in Paris was down 1.0%, while the DAX 40 in Frankfurt was down 0.4%.
In Paris, Societe Generale lost 9.1%, as its strategic plan disappointed investors.
The retail and investment bank and financial services firm said it is aiming to achieve average annual revenue growth between 0% to 2% between 2022 and 2026. It would fall short of the 8.8% growth achieved in 2022 alone.
Stocks in New York were called to open higher. The Dow Jones Industrial Average was called up marginally. Both the S&P 500 index and the Nasdaq Composite were called up 0.1%.
Brent oil was quoted at $94.33 a barrel at midday in London on Monday, up from $93.72 late Friday. Gold was quoted at $1,927.44 an ounce, up slightly against $1,927.20.
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