FTSE Roundup: UK stocks close lower as investors await Feds' next move

Stocks in London closed lower on Thursday as market participants anxiously await the upcoming interest rate decision by the US Federal Reserve, scheduled for next Wednesday. However, some of the nerves surrounding the decision were alleviated after a weaker-than-expected reading on US jobless claims.

The FTSE 100 index ended the day down 24.60 points, or 0.3%, at 7,599.74, while the FTSE 250 also slipped by 44.72 points, or 0.2%, closing at 19,107.55. Meanwhile, the AIM All-Share experienced a marginal decrease, finishing just 0.15 of a point lower at 792.90.

Among the blue-chip performers, Vodafone suffered the most, with its shares falling by 5.4%. This decline followed a 2.3% increase on Wednesday, driven by reports from Reuters stating that the telecommunications provider was in the final stages of merging its UK operations with Hong Kong conglomerate CK Hutchison. An announcement regarding the merger is anticipated to be made as soon as Friday.

On Thursday, Vodafone’s shares faced a setback as they went ex-dividend, meaning new buyers would not qualify for the latest payout. This led to the reversal of gains made the previous day.

Other notable decliners included grocer Sainsbury’s, which fell by 3.8%, and advertising firm WPP, which lost 2.6%. Both companies also went ex-dividend, contributing to their downward movement.

Housebuilder Crest Nicholson experienced a substantial drop of 7.4%. While the company reported a pretax profit of £28.4 million for the half-year ended April 30, a significant improvement from the £52.2 million loss during the same period last year, its revenue declined from £364.3 million to £282.7 million. Moreover, home completions decreased by 18% to 894 from 1,096 the previous year. Crest Nicholson attributed these figures to economic uncertainty and reduced confidence in the housing market.

In contrast, FirstGroup witnessed a surge of 14% after tripling its total dividend, despite reporting a lower annual profit. The public transport provider announced a final dividend of 2.9 pence per share, up from 1.1 pence per share the previous year. As a result, the total dividend for the financial year 2023 reached 3.8 pence, more than triple the previous year’s amount. This positive outcome came despite a sharp decline in pretax profit, which fell to £128.7 million from £654.1 million, and a 15% drop in revenue to £4.76 billion from £5.59 billion.

Costain, however, witnessed a steep decline of 13% after being removed from a UK infrastructure project. The company reached an agreement with National Highways that its involvement in the A66 Northern Trans-Pennine upgrade project “will come to an organised and managed end.” Costain clarified that the project’s exclusion would not impact its order book, as it was part of the preferred bidder book. The company remains confident in delivering full-year results in line with its expectations and expressed its commitment to other crucial National Highways projects, including the A12 Chelmsford to A120 widening project.