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LONDON MARKET CLOSE: Vodafone rises after gaining new shareholder

Stocks in London rose above European equities to close higher on Monday, with Vodafone and utility stocks performing well despite dull economic data from China.

Poor economic data from China overnight added to a wall of worry faced by equity markets, which have already been weakened by inflationary fears and central bank hawkishness this year.

The FTSE 100 closed up 46.65 points, 0.6%, at 7,464.80 on Monday. The FTSE 250 ended just 2.22 points higher at 19,924.11, and the AIM All-Share closed down 0.020 of a point at 955.58.

The Cboe UK 100 ended up 0.5% at 743.09, the Cboe UK 250 rose 0.2% to 17,611.05, and the Cboe Small Companies closer 0.4% higher at 14,663.44.

In European equities, the CAC 40 in Paris stock index ended down 0.2%, while the DAX 40 in Frankfurt lost 0.5%.

Germany's blue-chip index suffered from share price falls for carmakers BMW and Mercedes-Benz. The duo fell 0.4% and 1.1%.

Stocks in New York were lower at the time of the closing bell in London. The Dow Jones Industrial Average was down 0.4%, the S&P 500 lost 0.6%, while the tech-heavy Nasdaq Composite lost 1.1%.

‘Wall Street's indices have plodded into the new week, weighed down by weak economic data from China. The most concerning for US consumer stocks, that retail data which won't be surprising considering lockdown restrictions but spells out in black and white how restricted spend has been,’ said Danni Hewson of AJ Bell.

‘London's markets fared a little better, the FTSE 100 clinging onto forward momentum by the skin of its teeth, the domestically focussed FTSE 250 vacillating between the green and the red. Investors in London taking advantage of a dearth of domestic economic data to shake nerve, but there’s plenty to test the mettle for the rest of the week,’ Hewson added.

The National Bureau of Statistics in China released data showing that retail sales shrank 11% year-on-year in April.

It is the biggest slump since March 2020 as Chinese consumers remained cooped up at home or nervous about lingering restrictions.

Industrial production sank 2.9% a year before, reflecting damage from shuttered factories and transportation woes, as officials ramped up Covid-19 restrictions last month.

This figure is the weakest since early 2020 and swung from 5.0% growth in March.

The world's second-largest economy has persisted with strict virus measures, choking global supply chains as dozens of Chinese cities – including the key business hub Shanghai – grapple with restrictions.

The pound was quoted at $1.2250 late Monday, higher than $1.2230 at the London equities close on Friday. The euro was priced at $1.0402, down against $1.0410. Against the yen, the dollar was trading at JP¥129.10, down from JP¥129.28.

In London, Vodafone shares added 1.6%, after the company welcomed its newest major shareholder, Emirates Telecommunications Group.

UAE-based Emirates Telecom was formerly known as Etisalat and now goes by the moniker 'e&'. It took a 9.8% stake in FTSE 100-listed Vodafone, it said on Saturday, though it has no intention of mounting a takeover offer.

SSE rose 1.0%, while British Gas owner Centrica climbed 3.5%.

Investors certainly seem to think that Ofgem’s proposed changes to the price cap will be a boon for energy companies even whilst they are savaged by fuel poverty campaigners,‘ said Hewson continued. ’The changes should prevent more providers going bust and though it will ultimately mean that price cuts will also take effect more quickly it puts people struggling to pay bills on something of a roller coaster.‘

The price cap on UK household energy bills could be reviewed every three months under new plans mooted by Ofgem on Monday. The energy regulator said that it might insert two new reviews a year, one in January and another in July.

It would help pass on savings from a potential fall in gas prices to customers more rapidly, Ofgem said, and also protect under-pressure energy suppliers from being damaged by the cap.

The regulator is also consulting on plans that could add between £40 and £80 to customers' bills from this October.

The energy price cap – currently at a record £1,971 per year for the average household – is reviewed every six months and changed in October and April. By changing the price cap more often, Ofgem will make it more reflective of international gas prices, taking some of the pressure off suppliers.

Brent oil was quoted at $112.19 a barrel late Monday, up from $111.00 late Friday. Gold stood at $1,812.63 an ounce, flat against $1,812.69.

Back in London, sofa seller Made.com slumped 15% after it lowered its guidance for 2022 due to ’highly challenging‘ market conditions.

It reported trading has been volatile and more challenging than anticipated in recent months and noted ’third-party data‘ suggests that the online furniture and home market is down 30% to 40% so far in 2022.

‘We now assume the market will remain highly challenging for the rest of 2022 despite the significantly easier comparatives for the second half,’ it said.

Made.com expects gross sales to remain flat or to decrease by a maximum of 15% compared to the year before.

Made.com has had a tough first year or so on the London Stock Exchange. It floated at 200 pence per share back in June 2021 and its stock has fallen roughly 75% since.

DFS Furniture shares fell 4.7% on Monday, in a negative read-across.

On AIM, online retailer boohoo lost 2.6%, after Credit Suisse cut the stock to 'neutral' from 'outperform'.

Tuesday's economic calendar has UK unemployment data at 0700 BST, before US retail sales at 1330 BST. Eurozone gross domestic product data is reported at 1000 BST.

Ahead of the data, the European Commission downgraded its economic forecast for the EU and the eurozone on Monday, predicting economic activity to grow slower than previously thought, even as inflation accelerates quicker than expected.

In its latest spring forecast, the European Commission lowered its growth forecast for gross domestic product for both the EU and the eurozone to 2.7% in 2022 and 2.3% in 2023. This is down from winter forecast projections of 4.0% in both regions for 2022 and of 2.8% for the EU and 2.7% in the eurozone in 2023.

Tuesday's local corporate calendar has annual results from Vodafone, support services firm DCC and real estate investment trust Land Securities. Soft drinks company Britvic posts interim results and gold miner Fresnillo reports a trading statement.

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