London stocks were firmly in the red by midday on Friday amid concerns about inflation.
The FTSE 100 was down 1% at 7,014.54.
Neil Wilson, head of markets at Markets.com, said: “Stock markets in Europe fell sharply in the first day of trading in the new quarter, taking the cue from a dismal finish on Wall Street. It’s a sea of red for European bourses though hefty early losses were pared after the first hour of trade.”
Wilson pointed out that banks and cyclicals were bearing the brunt of the selling, whilst utilities is the only sector in the green as defensives find some bid.
“I’ve been warning for a long time about stagflation – now this is at the heart of the market’s selloff. We can pin it on worries about persistent inflation, supply chain trouble making things more expensive, labour shortages in key areas because no one wants to work, central banks tightening to avert inflation becoming unanchored and slowing growth. It’s recalibration for a macro outlook that seems to be less optimistic than it was in the first half of the year.”
Worries about the energy crisis in China also weighed on sentiment, after the country reportedly ordered state-owned firms to do whatever it takes to secure supplies for the winter.
In equity markets, online electricals retailer AO World tanked after it said adjusted core earnings for the year are set to be between £35m and £50m, versus expectations of £54m, and warned that a shortage of delivery drivers was taking its toll. Currys shares also fell sharply.
Darktrace was under the cosh after shareholders KKR Dark Aggregator LP, Summit DT CLN Holdings 4 and Balderton Capital SFI SLP sold 25m shares in the company in a placing at 750p each.
Convenience food maker Greencore lost ground despite saying that adjusted annual profits would be at the upper end of guidance as it worked to mitigate supply-chain and labour issues in the UK caused by Brexit and the Covid pandemic.
Bucking the trend, education publisher Pearson rallied on the back of a positive research note by Citi, which said the recent selloff has created “an interesting valuation opportunity”.
Euromoney rose after it said full-year adjusted pre-tax profit was set to be “significantly ahead” of analysts’ expectations.
Pub chain JD Wetherspoon was trading flat, paring earlier losses after saying it had plunged to its worst full-year loss ever as revenues tumbled after its pubs were forced to shut due to Covid measures.
Market Movers
FTSE 100 (UKX) 7,014.54 -1.01%
FTSE 250 (MCX) 22,858.40 -0.75%
techMARK (TASX) 4,576.37 -1.06%
FTSE 100 – Risers
Pearson (PSON) 733.40p 3.03%
National Grid (NG.) 899.40p 1.67%
Admiral Group (ADM) 3,151.00p 1.38%
International Consolidated Airlines Group SA (CDI) (IAG) 180.54p 1.14%
Fresnillo (FRES) 789.20p 1.00%
ITV (ITV) 107.55p 0.89%
Relx plc (REL) 2,163.00p 0.75%
Ocado Group (OCDO) 1,671.50p 0.54%
SSE (SSE) 1,577.50p 0.41%
London Stock Exchange Group (LSEG) 7,476.00p 0.35%
FTSE 100 – Fallers
Lloyds Banking Group (LLOY) 44.94p -3.49%
B&M European Value Retail S.A. (DI) (BME) 571.80p -3.18%
JD Sports Fashion (JD.) 1,016.50p -3.05%
Evraz (EVR) 576.60p -2.99%
Next (NXT) 8,014.00p -2.41%
Smith & Nephew (SN.) 1,257.00p -2.33%
Persimmon (PSN) 2,608.00p -2.25%
Hikma Pharmaceuticals (HIK) 2,395.00p -2.24%
Imperial Brands (IMB) 1,524.50p -2.18%
Scottish Mortgage Inv Trust (SMT) 1,398.50p -2.07%
FTSE 250 – Risers
Euromoney Institutional Investor (ERM) 1,040.00p 2.36%
Greencoat UK Wind (UKW) 132.40p 2.00%
GCP Infrastructure Investments Ltd (GCP) 102.40p 1.99%
IWG (IWG) 298.60p 1.91%
Drax Group (DRX) 490.20p 1.74%
Wizz Air Holdings (WIZZ) 5,100.00p 1.72%
Watches of Switzerland Group (WOSG) 962.00p 1.69%
Mitchells & Butlers (MAB) 240.60p 1.60%
Domino’s Pizza Group (DOM) 402.40p 1.56%
Assura (AGR) 72.55p 1.40%
FTSE 250 – Fallers
AO World (AO.) 169.70p -21.94%
Currys (CURY) 122.70p -8.09%
Cineworld Group (CINE) 74.60p -5.19%
Virgin Money UK (VMUK) 194.50p -4.84%
Dunelm Group (DNLM) 1,371.00p -3.59%
Harbour Energy (HBR) 350.60p -3.42%
Greencore Group (CDI) (GNC) 136.40p -3.40%
Moonpig Group (MOON) 308.80p -3.20%
IP Group (IPO) 135.60p -3.14%
Darktrace (DARK) 794.50p -3.11%
