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LONDON MARKET CLOSE: FTSE 100 down in mixed start to June

The FTSE 100 in London closed lower on Monday amid a shaky start in New York, and after a difficult day for GSK and Baltic Classifieds.

The FTSE 100 index closed down 12.63 points, 0.2%, at 8,262.75. The FTSE 250 ended up 170.37 points, 0.8%, at 20,900.49, and the AIM All-Share closed down 0.63 of a point, 0.1%, at 805.16.

The Cboe UK 100 ended down 0.1% at 824.85, the Cboe UK 250 closed down 1.1% at 18,377.99, and the Cboe Small Companies ended up 0.1% at 17,108.44.

In European equities on Monday, the CAC 40 in Paris ended up 0.1%, while the DAX 40 in Frankfurt ended up 0.6%.

The UK manufacturing sector returned to growth in May, according to purchasing managers’ index survey results on Monday.

The seasonally adjusted S&P Global UK manufacturing purchasing managers’ index rose to 51.2 in May from 49.1 in April. This was its highest reading since July 2022, but below an earlier flash estimate of 51.3 points.

Nevertheless, manufacturing production expanded at the quickest rate since April 2022.

In the US, however, reports painted a conflicting picture as to the health of the US manufacturing sector.

The S&P Global US manufacturing PMI rose to 51.3 in May, after having posted in line with the 50.0 no-change mark in April. The total was above the flash figure of 50.9.

But the Institute for Supply Management’s manufacturing PMI registered 48.7 in May, down from 49.2 recorded in April.

Stocks in New York were mixed at the London equities close. The DJIA was down 0.7% and the S&P 500 index down 0.2%. Meanwhile, the Nasdaq Composite rose 0.4%.

The pound was quoted at $1.2788 at the London equities close Monday, higher compared to $1.2719 at the close on Friday. The euro stood at $1.0883 at the European equities close Monday, up against $1.0844 at the same time on Friday. Against the yen, the dollar was trading at JP¥156.16, lower compared to JP¥157.24 late Friday.

In the FTSE 100, GSK lost 9.5%.

The pharmaceutical firm told investors that there is ‘no scientific consensus’ that ranitidine increases risk of any cancer. It plans to immediately seek appeal to a ruling by the Delaware State Court, whereby a judge found the evidence backing up claims that Zantac - or ranitidine - causes cancer is legitimate and can be heard by juries.

GSK said that the ruling contradicts the Federal Court’s Multidistrict Litigation ruling under the same legal standard, and emphasised that the ruling does not determine liability.

AJ Bell Investment Director Russ Mould noted investors had reached a ‘point of some comfort’ with GSK’s Zantac issue but this ruling has thrown a ‘significant spanner into the works.’

‘In the short term this just pours more uncertainty over the investment case,’ he said.

Wealth managers St James’s Place and Quilter were up 4.7% and 3.6%, respectively.

JPMorgan upgraded both London listings to ’overweight’ from ’neutral’.

‘After a very challenging period for UK wealth managers, we believe that the combination of improving flows, high [earnings per share] growth, and fading regulatory headwinds will lead to improving sentiment and positive share price performance,’ the broker remarked.

In the FTSE 250, Baltic Classifieds fell 5.5%.

Apax partners said it has sold 40 million shares in the online classified ads portal provider. The shares are worth £92.4 million in total.

On AIM, Beacon Energy plummeted 65%.

The oil and gas company said that the SCHB-2 sidetrack in Erfelden field was kicked off from the original well bore, and that the well will be temporarily shut-in to allow the rig to be demobilised. During this time, pressure build-up data will be obtained to better inform Beacon’s understanding of the reservoir response.

Once the rig has left the drilling site, remedial actions will be undertaken, and the well will be reconnected to the Schwarzbach facility to allow well clean-up and a long-term flow rate.

Brent oil was quoted at $78.22 a barrel at the London equities close Monday, down from $81.30 late Friday.

Gold was quoted at $2,341.60 an ounce at the London equities close Monday, higher against $2,328.36 at the close on Friday.

In Tuesday’s economic calendar, there is German unemployment data. After that, there is a US job openings reading.

The UK corporate calendar for Tuesday has a trading statement from British American Tobacco. There are also full year results from LondonMetric Property.

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