FTSE 100 close: Markets end in the green before Easter weekend despite US recession fears
London’s blue-chip index approached the Easter weekend higher as oil giant Shell lifted markets despite fears that the US economy might be slowing.
The capital’s premier index ended 1.03 per cent higher at 7,741.56 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, closed 1.05 per cent higher at 18,797.03 points.
Shell traded near the top of the FTSE , closing up 2.3 per cent, despite signalling it will face a big loss in the first quarter of 2023. It forecast that it would face a loss of between $900m and $1.2bn due to “one-off tax charges”.
AJ Bell’s Danni Hewson said: “the anticipated loss is a quirk of accounting – reflecting one-off tax charges which could well be the result of booking the impact of future windfall taxes upfront. Based on the performance of the company’s other business units you would still expect Shell to be generating plenty of cash to fund its dividend.”
Shell also said it expects higher LNG output in the first quarter compared to last year.
Over the week it is nearly four per cent higher after OPEC announced a reduction in its production volume, sending the price of oil up to around $85.
Housebuilders were mixed, after Halifax’s monthly house price index increased unexpectedly. Persimmon climbed 2.5 per cent and Taylor Wimpey rose 1.5 per cent while Barratt Developments remained flat.
As the market recovers from the fall out from September’s mini budget, figures showed that the average house price increased 0.8 per cent in March thanks to an easing in mortgage rates.
On an annual basis, house prices were 1.6 per cent higher than a year ago, slowing from 2.1 per cent house price growth in February.
Although this was the weakest rate of annual growth in nearly three-and-a-half years, Halifax Mortgages Kim Kinnaird said the market “continues to show resilience following the sharp downturn at the end of 2022”.
The UK’s construction industry also received an update today, with new data showing civil engineering propping up the UK’s construction sector.
At 50.7 in March, the headline seasonally adjusted S&P Global /CIPS UK Construction Purchasing Managers’ Index (PMI) – which measures month-on-month changes in total industry activity – was down from 54.6 in February but above the 50.0 no-change threshold for the second month running.
London outperformed other markets which were weaker after data from the US suggested it might be approaching a recession.
Two jobs reports this week have showed a weaker labour market, suggesting that the Fed’s policy of hiking rates is starting to have an effect. Another report will be published tomorrow, giving us more insight into the state of the US economy.
Derren Nathan, Hargreaves Lansdown’s head of equity research said that “while the figures provide some support for the more doveish members of the Fed’s Open Market Committee, markets took little comfort from the reality that the world’s largest economy could be heading towards a recession.”
The pound remained fairly steady around $1.2458