Stocks fall as risk sentiment remains bearish
Stock prices in London closed lower on Thursday as investors failed to shake off nerves over US interest rates, as well as the uncertain geopolitical situation in the Middle East.
The FTSE 100 index closed down 88.47 points, or 1.2 per cent, at 7,499.53. The FTSE 250 Index ended 190.32 points, or 1.1%, lower at 17,213.14, and the AIM All-Share Index closed 1.56 points, or 0.2% lower. , at 683.24.
The Cboe UK 100 finished down 1.1% at 748.99, the Cboe UK 250 closed down 0.9% at 14,931.03, and the Cboe Small Companies finished down 0.5 % at 12,931.20.
In Europe, the CAC 40 in Paris closed down 0.6%, while the DAX 40 in Frankfurt closed down 0.3%.
Stocks in New York were lower at the London close, with the DJIA down 0.3%, while the S&P 500 index and Nasdaq Composite were down 0.4%.
“Current risk appetite remains conservative at best, due to prevailing economic uncertainties and heightened geopolitical risks from the Middle East. With interest rates at their highest level since the financial crisis and uncertainty continued concern about inflation, investors are thinking about the future economic landscape,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.
American markets were on alert before the speech by the President of the American Federal Reserve, Jerome Powell. He is expected to speak at the Economic Club of New York around 5 p.m. BST.
Mr. Powell is likely to be very optimistic in his policy speech, as concerns about rising oil prices, caused by the war between Israel and Hamas, continue to grow.
A barrel of Brent was quoted at USD 91.28 at the close of the London stock markets on Thursday, compared to USD 91.10 last Wednesday.
Geopolitical unrest in the Middle East has destabilized markets over the past two weeks and amplified uncertainty.
The British prime minister arrived in Israel on Thursday to meet Middle East leaders and call for avoiding any escalation of the conflict.
Rishi Sunak will meet with Israeli Prime Minister Benjamin Netanyahu and President Isaac Herzog at the start of a two-day trip that is expected to take him to several capitals in the region.
He will invite Middle East leaders to “avoid further dangerous escalation”, saying that “too many lives have already been lost” in the war between Israel and Hamas.
Mr Sunak’s visit follows that of US President Joe Biden. Mr. Netanyahu’s office announced that it had approved a request from Mr. Biden to allow Egypt to deliver limited quantities of humanitarian aid to the Gaza Strip.
On London’s FTSE 100, Rentokil fell 18% to the bottom of the index.
The pest control and hygiene company warned that difficult market conditions in North America meant its annual result in the region would be worse than expected.
It now forecasts an adjusted operating margin in North America of between 18.5% and 19.0%, compared to its previous expectation of a margin of 19.5%. At the group level, however, it maintains its adjusted operating margin forecast of 16.5%.
Rightmove fell 13% as the stock was hit by mergers and acquisitions in other parts of the online property portal market.
New York-listed property group CoStar has reached an agreement to acquire OnTheMarket, the rival property portal to AIM-listed Rightmove.
The offer is 110p for each OTM share, valuing the company at around £99 million. This price represents a 56% premium to OTM’s closing price of 70.50 pence on Wednesday.
Shares in OTM jumped 53% to 107.53p on Thursday.
For CoStar, the transaction constitutes an “attractive strategic entry point” into the residential real estate market in the United Kingdom, according to the press release.
Russ Mould, of AJ Bell, said: “This is a classic deal: a US company already expert in the same sector uses the acquisition of a London-listed company to expand into a new segment of the British market. In the case of CoStar, the operation will allow it to gain a foothold in the residential real estate sector in the United Kingdom.
AJ Bell rose 4.6% on Thursday, putting it at the top of the FTSE 250 index.
For the financial year ended September 30, the company, which offers online investment platforms and brokerage services, recorded net inflows of £1.65 billion, an increase of 57% on £1.05 billion recorded in the previous year.
“At an industry level, we continue to engage with government on potential ISA reforms, with a focus on simplifying the current ISA landscape so that retail investors can navigate it more easily. We believe that This will encourage more people to invest through ISAs, which would benefit UK listed companies, given the natural preference of retail investors for their home country,” said Michael Summersgill, director general of the company.
On the AIM, Saietta shares fell 23% after trading resumed in London on Thursday afternoon.
The designer, engineer and manufacturer of “eDrive” solutions for electric vehicles said its pre-tax loss for the year ended March 31 was £29.3 million, compared with a loss of £11.1 million. sterling the previous year.
However, Saietta said revenue and other income from continuing operations more than doubled in the 2023 financial year, from £2.1 million to £4.8 million. Including discontinued operations, turnover increased by 19%, from £4.3 million to £5.1 million.
The pound was quoted at $1.2149 at the close of London stock markets on Thursday, down from $1.2191 at Wednesday’s close.
The euro stood at $1.0576 at the close of European markets on Thursday, up from $1.0533 at the same time on Wednesday. Against the yen, the dollar traded at 149.92 yen, up from 149.86 yen late Wednesday.
Gold was quoted at $1,952.66 an ounce at the close of the London Stock Exchanges on Thursday, up from $1,941.78 at the close on Wednesday.
In Friday’s UK business calendar there is a trading statement from hotel chain operator InterContinental Hotels. There are also updates from real estate agency Foxtons and currency and derivatives manager Record.
Friday’s economic calendar includes UK public sector finances and retail sales at 0700 BST. There is also data on the PPI in Germany.
The People’s Bank of China’s prime rate announcement will be released overnight.
This article is originally published on zonebourse.com
