LONDON MARKET CLOSE: Stocks mixed; oil prices bolsters FTSE 100

(Alliance News) - Stocks in London ended mixed on Monday following the heavy losses last week on fears that rising interest rates could spark a recession, with volumes light as US markets were closed for Independence Day.

The FTSE 100 index closed up 64.00 points, or 0.9%, at 7,232.65. The FTSE 250 index closed down 44.03 points, or 0.2%, at 18,592.95. The AIM All-Share index closed up 0.19 of a point at 875.02.

The Cboe UK 100 index closed up 1.2% at 722.11. The Cboe 250 ended down 0.2% at 16,185.36. The Cboe Small Companies finished 0.3% higher at 13,290.11.

In Paris the CAC 40 closed up 0.4%, while the DAX 40 in Frankfurt ended down 0.3%.

"A fresh surge in crude prices during the day has bolstered BP and Shell, providing hope that the UK leading index still has the power to outshine other indices. But as ever it is the absence of the US that is problematic - Wall Street has driven the selloffs this year, and today's gains could easily slip away tomorrow," said IG Group's Chris Beauchamp.

In the FTSE 100, energy stocks ended among the best performers, tracking spot oil prices higher. BP closed up 4.8%, Shell up 4.3% and Harbour Energy up 5.2%.

Brent oil was quoted at USD113.66 a barrel at the equities close, up sharply from USD110.84 at the close Friday.

In the FTSE 250, Pets At Home closed down 7.8% after RBC downgraded the pet products retailer to 'underperform' from 'sector perform'.

Grafton slumped 7.7% after the Selco owner said Gavin Slark plans to step down as chief executive, after 11 years at the helm. He will stay on as the builders merchant's boss until the end of the year, "in line with his service agreement".

Elsewhere, AO World slumped 19% after a press report at the weekend pertaining to its credit cover caused the online electrical appliance retailer's stock to drop sharply.

The Sunday Times reported that Atradius, a credit insurer, cut its credit cover for the online retailer's suppliers. Credit cover is crucial aspect of the retail supply chain. It provides cover for firms should customers not pay debts in time or at all.

AO confirmed in a statement on Monday that it was aware that one of the third-party credit insurers which provides credit insurance to some of its suppliers had rebased their cover in May with respect to AO, reflecting post-Covid sales levels.

This, the company explained, was a reduction from the heightened levels that had been in place and required through the pandemic.

AO said that, to date, this rebased cover has had no effect on its liquidity position, which remains in-line with the board's expectations for 2023, it added.

The company continued that progress in regard to the closure of its German operations has been "encouraging", with total cash costs of closure now expected to be towards the lower end of its original estimates of nil to GBP15 million.

AO added it continues to have full access to its GBP80 million revolving credit facility and is still considering and implementing a number of ongoing initiatives and further actions to strengthen its balance sheet.

The pound was quoted at USD1.2114 at the London equities close, up from USD1.2034 at the close Friday.

The euro stood at USD1.0430 at the European equities close, up from USD1.0406 after producer price inflation data from the continent.

Eurozone factory gate inflation eased slightly in May, figures showed. According to Eurostat, the producer price index rose 36.3% annually in May, easing from 37.2% in April.

The figure came in slightly below FXStreet-cited consensus of 36.7%.

On a monthly basis, producer prices rose by 0.7% in May, cooling off from 1.2% in April. This undershot the consensus estimate of 1.0% for the monthly change.

Against the yen, the dollar was trading at JPY135.72, up from JPY135.19 late Monday.

Gold stood at USD1,808.30 an ounce at the London equities close, firm against USD1,806.73 late Friday.

Financial markets in the US were closed on Monday for Independence Day.

The economic calendar on Tuesday has a slew of services PMI readings from China, France, Germany, the eurozone and UK. On the central banking front, the Reserve Bank of Australia announces its latest interest rate decision overnight.

The UK corporate calendar on Tuesday has first quarter results from supermarket chain J Sainsbury and annual results from fashion retailer Quiz.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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