Stocks in London kicked off the new trading week on the front foot on Monday, while traders cautiously await the latest US Federal Reserve interest rate decision later this week.
In Germany, however, the blue chip benchmark was lagging European peers as Russia slashed gas flows via the Nord Stream pipeline, and a poor business survey, was too much to bear.
The FTSE 100 ended up 29.93 points, or 0.4%, at 7,306.30. The FTSE 250 index lost 21.78 points, or 0.1%, at 19,802.99. The AIM All-Share index ended down 2.95 points, or 0.3%, at 902.14.
The Cboe UK 100 index ended up 0.3% at 728.87. The Cboe 250 fell 0.1% at 17,259.00. The Cboe Small Companies closed up 0.5% at 13,649.49.
In mainland Europe, the CAC 40 stock index in Paris rose 0.3%, though the DAX 40 in Frankfurt ended 0.3% lower.
The DAX 40 faced late session selling pressure on news that Gazprom is cutting daily gas deliveries via the Nord Stream pipeline.
The Russian state energy company will lower gas flows through the Nord Stream 1 pipeline to Germany to 20% of maximum capacity, citing repairs of another turbine.
The company said that gas flows through the pipeline that runs under the Baltic Sea from Russia to Germany would drop to 33 million cubic metres on Wednesday.
Sentiment in Germany was already fragile after a warning from a business poll that showed Germany is on ‘brink of recession’
The German Ifo business climate index fell to 88.6 points in July from a revised reading of 92.2 in June and missed expectations of a score of 90.1.
‘Companies are expecting business to become much more difficult in the coming months. They were also less satisfied with their current situation. Higher energy prices and the threat of a gas shortage are weighing on the economy. ’Germany is on the cusp of a recession,‘ commented ifo President Clemens Fuest.
The euro struggled on Monday. The single currency faded to $1.0215 at the time of the European equities close, down from $1.0224 late Friday.
The pound was on the up, however, rising to $1.2041 from $1.2028. Against the yen, the dollar climbed to JP¥136.71 from JP¥136.11.
It was a mixed start to the week for the greenback, which could face further volatility throughout the rest of the week ahead of the Fed's rate decision on Wednesday.
Traders are pricing in a 75bps rate hike, but there is a possibility of a 100bps rise.
Another market focus this week is earnings from trillion-dollar tech names. Google owner Alphabet and computer software and consumer electronics maker Microsoft report quarterly earnings on Tuesday, before e-commerce firm Amazon and iPhone maker Apple on Thursday.
Reports from the tech sector so far have been mixed. Results from streaming service Netflix were well-received, though Snapchat owner Snap disappointed.
On Friday, Twitter reported a heavy second quarter loss as it counts the costs of a protracted and messy takeover battle with Tesla boss Elon Musk.
US equities started the week mixed. The Dow Jones Industrial Average was up 0.3%, the S&P 500 up 0.2%, though the Nasdaq Composite was down 0.4%.
In London, the banking sector enjoyed a decent start to the week, with StanChart rising 3.1%, NatWest climbing 2.3% and Barclays adding 1.8%.
Barclays reports second quarter numbers on Thursday, before NatWest and StanChart on Friday.
Lenders were enjoying gains ahead of the expected Fed and then Bank of England rate hikes, which will grow margins on lending.
Elsewhere in London, Ferrexpo jumped 14% after the iron ore pellet producer said it completed an external assurance process for the reporting of crucial safety metrics and scope 1 and scope 2 greenhouse gas emissions for its performance in 2021.
In addition, Credit Suisse upgraded Ferrexpo to 'outperform' from 'neutral'.
Molten metal flow engineer Vesuvius surged 9.9% as it said trading for the months of May and June remained stronger than anticipated.
Vesuvius expects to report a trading profit for the first half of 2022 of £127.4 million. This would be sharply higher than the £73.3 million reported a year before.
Looking ahead, it now expects its full-year trading profit to be towards the top end of the range of current analysts' expectations of £155 million and £199 million. This compares to £142.4 million in 2021.
The London-listed travel sector struggled in a negative read-across after peer Ryanair warned could not ’ignore the risk‘ of new Covid variants in Autumn.
The budget carrier pointed to its experience with Omicron last November and the Ukraine invasion to demonstrate how ’fragile the air travel market remains‘.
Ryanair said the strength of any recovery will be dependent on there being no adverse or unexpected developments over the remainder of its financial year.
In the first quarter ended June 30, revenue was €2.60 billion, multiplied from €370 million in the first quarter last year. This helped swing the Dublin-based carrier to a profit after tax of €170 million from a €273 million loss a year before.
Shares in easyJet, which reports a trading statement on Tuesday, ended 0.8% lower. British Airways owner International Consolidated Airlines Group lost 0.9% and Jet2 fell1.3%.
Ryanair ended down 0.1% in Dublin.
Brent oil was quoted at $104.78 a barrel late Monday, largely flat from $104.74 at the European equities close on Friday. Gold stood at $1,718.56 an ounce, down sharply against $1,731.12.
Tuesday's economic calendar has minutes from the Bank of Japan's latest meeting released overnight. The Fed's latest meeting kicks off on Tuesday, meanwhile.
The local corporate calendar has half-year results from consumer goods firm Unilever, power generation firm Drax and newspaper publisher Reach.
Copyright 2022 Alliance News Limited. All Rights Reserved.
