Last checked at 
(Alliance News) - Stocks in London were marked lower on Monday with the lack of direction from Wall Street, with US markets closed, adding to the subdued mood.
The FTSE 100 index closed down 30.02 points, 0.4%, at 7,594.91. The FTSE 250 ended up just 3.22 points at 19,200.84, and the AIM All-Share closed down 1.69 points, or 0.2%, at 747.37.
The Cboe UK 100 ended down 0.5% at 758.07, the Cboe UK 250 closed down 0.3% at 16,615.72, and the Cboe Small Companies ended 0.2% lower at 15,062.74.
The downbeat mood was replicated in Europe, with the CAC 40 in Paris down 0.7% and the DAX 40 in Frankfurt 0.5% lower.
The falls in London came with US markets closed for Martin Luther King Jr Day and ahead of a key week of economic data releases.
Joshua Mahony at Scope Markets pointed out this week sees "a deluge of data" headed up by Wednesday's UK inflation readout.
"Wage data due on Tuesday provides a reminder over the elevated underlying pressures being felt by UK businesses," with the 7.3% average earnings figure seen last time around standing in stark contrast to the 3.9% consumer price index figure from November, he noted.
Financial markets are currently pricing five rate cuts this year from the Bank of England, with an expected first dovish pivot at the May meeting.
Goldman Sachs expects Tuesday's November labour market report to show the unemployment rate remaining at 4.2% and three-month year-over-year private sector regular pay growth moderating to 6.7% from 7.3% in October.
Goldman thinks Wednesday's inflation print will show services and core inflation declining to 5.9% year-on-year, and 4.8% year-on-year, respectively.
Taken together with further declines in food and energy inflation, it expects headline inflation to moderate to 3.6% year-on-year, well below the Bank of England's November projection of 4.6%.
Looking ahead, given the significant decline in energy prices over the past few weeks, Goldman now expects headline inflation to fall below the BoE's 2% target in April, and end the year at 1.8%, down from a previous prediction of 2.4%.
The pound was quoted at USD1.2734 at the London equities close Monday, down compared to USD1.2760 at the close on Friday. The euro stood at USD1.0950 at the European equities close Monday, down against USD1.0971 at the same time on Friday. Against the yen, the dollar was trading at JPY145.77, up compared to JPY144.62 late Friday.
The fall in the euro came despite hawkish rhetoric from European Central Bank Governing Council member Robert Holzmann.
Holzmann said in an interview in Davos, Switzerland, where he's attending the World Economic Forum that it is "much too early" to talk about trimming borrowing costs.
"Once such a date would be set, it would trigger immediately a dynamics which we cannot control," he added.
"And with all the knowledge we currently have, it would not be honest to do it because we don't know how inflation will develop."
In the FTSE 100, Flutter Entertainment was the biggest riser, up 2.4%, and Ocado a big faller, down 4.5%. Both will issue trading updates this week, the bookmaker on Thursday, and grocer and warehouse technology firm Ocado on Tuesday.
Burberry suffered again, with shares down 5.1% as analysts reacted to Friday's profit warning.
The luxury goods manufacturer cut its forecast for adjusted operating profit for the financial year ending March 30 to be in the range of GBP410 million to GBP460 million. The latest guidance would at worst represent a decrease of over a third from the GBP634 million achieved in financial 2023.
Back in November, it had guided for profit towards the lower end of the consensus range at that time of GBP552 million to GBP668 million.
Goldman Sachs downgraded the company to 'neutral' from 'buy' while UBS, JPMorgan, Morgan Stanley and Deutsche Bank were among those lowering price targets.
Lloyds Banking Group fell 2.5% after it was seen as facing the largest monetary hit among UK banks from the review of motor finance, being undertaken by the Financial Conduct Authority.
Barclays suggested a potential provision range of GBP500 million to GBP1.0 billion for Lloyds, while RBC Capital Markets put the figure at GBP1.2 billion.
Bank of America downgraded Lloyds to 'neutral' from 'buy'.
While RBC said Lloyds could see the largest absolute impact from the FCA review, Close Brothers could see the largest relative impact at around 120 basis points of capital.
"Any action taken here could have implications for [Close Brothers Group's] go forward [net interest margin] NIM, with premium financing making up around 10% of the banking loan book," RBC said.
Shares in Close Brothers fell 2.6%.
Another bank on the wane was HSBC, falling 2.3%, downgraded by Exane BNP to 'underperform' from 'neutral.'
Shares in Crest Nicholson eased 1.1% after it lowered its profit outlook.
The housebuilder said it had identified "further additional costs" associated with its Brightwells Yard, Farnham project, as well as other legacy sites which will impact results.
Based on this, Crest Nicholson now expects pretax profit in its financial year to October 31 to be GBP41 million. In November, the company had guided pretax profit to be between GBP45.0 million and GBP50.0 million for the financial year ended October 31, having guided for GBP50.0 million in August. In financial 2022, the company reported pretax profit of GBP137.8 million.
On AIM, Fevertree Drinks fizzed 4.9%, supported by positive comments from Liberum Securities.
The broker upgraded the London-based drinks maker to 'buy' from 'hold' and increased its price target to 1,300p from 1,200p.
"Despite the 'bad news' maybe not being over, the valuation.....looks reasonable. For those wanting to build a position, now is the time," the broker commented.
Brent oil was quoted at USD78.09 a barrel at the London equities close Monday, down from USD78.65 late Friday.
Gold was quoted at USD2,053.53 an ounce at the London equities close Monday, little changed from USD2,053.68 at the close on Friday.
In Tuesday's UK corporate calendar, trading statements are due from Experian, Ocado, Rio Tinto and Wise Group.
The economic calendar for Tuesday has the UK unemployment figures at 0700 GMT.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
