LONDON MARKET CLOSE: Risk appetite returns after week of heavy losses

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Stocks in London kicked off the new week on the front foot, with risk appetite returning following the heavy selling last week, with the FTSE 100 boosted by high street banks and oil majors.

Financial markets in the US are closed on Monday in observance of the maiden Juneteenth public holiday.

The FTSE 100 index closed up 105.56 points, or 1.5%, at 7,121.81. The blue-chip index had shed 4.1% last week.

The FTSE 250 ended up 84.91 points, or 0.5%, at 19,010.82. The AIM All-Share closed down 3.80 points, or 0.4%, at 897.17.

The Cboe UK 100 ended up 1.7% at 709.51, the Cboe UK 250 closed up 0.3% at 16,704.54, and the Cboe Small Companies ended down 0.8% at 13,689.01.

In European equities on Monday, the CAC 40 stock index in Paris closed up 0.6%, while the DAX 40 in Frankfurt finished 1.1% higher.

The CAC was lagging its European peers after the result of the French legislative election saw President Emmanuel Macron lose his parliamentary majority.

Markets were bolstered by US Treasury Secretary Janet Yellen saying a recession in the US is not ‘inevitable’. Yellen, however, warned the economy is likely to slow.

The dollar lost out at the start of the week.

The euro was priced at $1.0528 late Monday, up from $1.0465 at the same time on Friday. Against the yen, the dollar was trading at JP¥135.03, lower against JP¥135.17.

The pound was quoted at $1.2246 late on Monday, up from $1.2211 at the London equities close Friday. Cable had hit an intraday high of $1.2279.

Sterling received a boost from hawkish comments from a Bank of England policymaker.

The BoE should lift interest rates in chunkier instalments as a flailing pound is heaping more inflationary pressure on the UK, Catherine Mann said on Monday.

Mann was one of three members of the BoE's nine-strong Monetary Policy Committee to vote for a 50 basis point rate increase at last week's meeting.

In the end, the BoE voted to raise the Bank Rate by a quarter-point to 1.25%.

The London-listed banking sector was also on the up following Mann's comments. HSBC shares rose 5.8%, one of the best FTSE 100 performers. Lloyds added 3.8%, while Virgin Money climbed 1.7%.

Elsewhere in London, BP and Shell rose 3.1% and 3.3%, also boosting the FTSE 100. The oil majors clawed back some of Friday's hefty share price falls, despite Brent prices declining.

Brent oil was quoted at $113.70 a barrel late on Monday, down from $114.22 late Friday.

Euromoney jumped 26%, the best FTSE 250-listed performer. Shares ended at 1,382.00 pence.

The business information publisher and events organiser confirmed it received an approach from a consortium of Astorg Asset Management and Epiris regarding a possible cash offer at 1,461 pence per Euromoney share, valuing the company at £1.6 billion.

Rank Group, which exited the FTSE 250 after an index review came into force, tumbled 15% at the start of the week. Shares were hit hard after it downgraded annual earnings guidance again, citing soft demand for its Grosvenor casinos.

The Maidenhead-based firm said performance across its Grosvenor casinos was ‘considerably weaker than expected’ since its last trading update in late April.

Consequently, Rank Group downgraded annual guidance for like-for-like underlying operating profit to £40 million for the year ending June 30. This is down from previously downgraded guidance for a range of £47 million to £55 million from back in April.

Kingspan plunged 10%. The building materials firm warned order volumes have slowed in recent weeks.

‘We have seen the mood in most end-markets deteriorate over the last two months with order intake volume down significantly on the May and June period in 2021 although ahead versus the same period in 2019,’ the Kingscourt, Ireland-based firm cautioned.

Despite the recent slowdown, Kingspan expects trading profit for the first half of 2022 to be in the region of €415 million, up 26% from €329 million a year before. This is a ‘record’ high for the company, it noted.

Gold stood at $1,838.66 an ounce at the time of the European equities close on Monday, lower against $1,841.66 late Friday.

Tuesday's economic calendar has the release of the latest Reserve Bank of Australia monetary policy meeting minutes overnight. The RBA earlier in June hiked interest rates.

The local corporate calendar has annual results from packaging company DS Smith and currency and derivatives manager Record.

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