LONDON MARKET CLOSE: Stocks start week with modest gains

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- Stocks in London continued last week's upward trajectory on Monday, as investor sentiment continues to improve despite concerns over interest rate hikes and a global slowdown in growth.

The FTSE 100 index closed up 49.51 points, or 0.7%, at 7,258.32 on Monday. The FTSE 250 ended up 1.0%, or 195.24 points, at 19,318.95, and the AIM All-Share closed up 7.22 points, or 0.8%, at 903.49.

The Cboe UK 100 ended up 0.8% at 725.11, the Cboe UK 250 closed up 1.1% at 16,937.52, and the Cboe Small Companies ended down 0.1% at 13,486.47.

In mainland Europe, the mood was shakier. The CAC 40 in Paris ended down 0.4% and the DAX 40 in Frankfurt ended up 0.5%.

The mood appeared steady on Monday after a turbulent few sessions. Things are likely to heat up on Wednesday when we get remarks from the heads of the Federal Reserve, European Central Bank and Bank of England. In addition, US gross domestic product data will be released.

In London, miners advanced after coming under selling pressure last week in the wake of recession worries. Antofagasta finished as the top performer in the FTSE 100, up 3.3%, while Anglo American rose 2.2% and Glencore added 1.5%.

‘Industrial metals are largely higher today following a very bearish run last week. Worries about a cooling in global demand has hurt the commodities. Copper is up over 1% today but keep in mind it tumbled to a 16-month low on Friday,’ said David Madden, market analyst at Equiti Capital.

Brent oil was quoted at $114.74 a barrel at the London equities close Monday, up from $113.44 late Friday. Oil majors BP and Shell rose 1.3% and 1.2% respectively.

Towards the other end of the index was online grocer Ocado, closing down 1.2% after Credit Suisse downgraded the stock to 'neutral' from 'outperform'.

In the FTSE 250, Biffa shares fell 2.1% after saying auditor Deloitte has asked for additional time to complete its annual audit. The delay is related to an ongoing landfill tax enquiry.

Earlier in June, the company said it was facing a probe related to UK landfill tax law. While there is no guarantee a claim could be brought against it, Biffa estimated a maximum hit of £153 million, plus penalties and interest. Landfill tax is a levy imposed on a firm that disposes of materials in waste sites.

Elsewhere, Hyve rose 4.3% after saying the post-pandemic recovery of in-person events has ‘considerably ahead of anticipated levels’.

The events organiser explained that the momentum seen in the first half of its financial year had continued into the third-quarter, ending June 24. Revenue in the period showed a full recovery on a pro-forma basis, Hyve said, supported by strong customer demand for in-person events.

Forward bookings for all of financial 2022 total £122.3 million, which excludes August events in China due to Covid restrictions and all events in Ukraine due to the war.

On the junior AIM market, shares in CareTech jumped 21% after accepting a £870.3 million takeover bid tabled by a consortium which features the residential social care and education services firm's founders.

The offer from Amalfi Bidco, a consortium which includes CareTech founders Farouq and Haroon Sheikh and THCP Advisory, has the support of over 50% of shareholders. The consortium will pay a 750 pence cash consideration, a 28% premium to CareTech's share price on March 4, the day before the Sheikh brothers said they were in the ‘early stages’ of forming a takeover consortium.

Stocks in New York were mostly higher at the London equities close, with the Dow Jones up 0.3%, the S&P 500 index up 0.3%, and the Nasdaq Composite flat.

The dollar eased back amid Monday's risk-on mood. The pound was quoted at $1.2303 at the London equities close Monday, up compared to $1.2282 at the close on Friday.

Sterling rose despite heightened Brexit worries. UK Prime Minister Boris Johnson has signalled that his plan to effectively tear up parts of the Northern Ireland Protocol could be law by the end of the year.

MPs are set to vote later on Monday on controversial new legislation to give ministers powers to override parts of the post-Brexit deal on Northern Ireland. Johnson said the plan could be carried out ‘fairly rapidly’, with the proposals in law by the end of the year.

The UK has insisted that its unilateral approach is the only option left to resolve the issues ‘baked in’ to the protocol if the EU maintains its refusal fundamentally to rewrite the terms of the deal. But the move has sparked a fierce backlash from the bloc, with fresh legal action launched against Britain last week.

The euro stood at $1.0608 at the European equities close Monday, against $1.0549 at the same time on Friday.

Safe haven assets such as the Japanese yen and gold lost ground due to the improved market sentiment. Against the yen, the dollar was trading at JP¥135.19, up compared to JP¥135.10 late Friday.

Gold was quoted at $1,822.51 an ounce at the London equities close Monday, down from $1,830.41 at the close on Friday.

Tuesday's economic calendar has Irish retail sales at 1100 BST and US consumer confidence at 1500 BST.

The corporate calendar on Tuesday has full-year results from money transfer service Wise and safety and regulatory compliance services and software firm Marlowe. ICG Enterprise Trust releases first quarter results and Petrofac puts out a trading update.

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