London stocks were still little changed in early trade on Tuesday following a tech selloff on Wall Street and as investors eyed the latest US inflation reading.
The FTSE 100 was flat at 7,479.92.
On Monday, tech stocks in the US slid after Nvidia issued a profit warning.
Oanda market analyst Craig Erlam said: “We may have reached a point in which investors need to decide whether they truly buy into the recovery/no recession narrative or not. That is what appears to have fuelled the recovery we’ve seen in equity markets despite the fact that inflation hasn’t even started falling, central banks are still hiking aggressively and recession is on the horizon for many.
“It’s time to decide whether this is just a substantial bear market rally or a genuine view that the economic outlook is far less downbeat than many fear. If equity markets are going to push on from here, it must be based on the latter which I’m sure many would welcome but perhaps more through hope than expectation.”
He said the US inflation data on Wednesday could effectively set the mood for the rest of the summer. “That seems quite dramatic but if we fail to see a drop in the headline rate, considering the acceleration we’re expected to see in the core, it could really take the wind out of the sails of stock markets as it would be very difficult for the Fed to then hike by anything less than 75 basis points in September.”
In equity markets, asset manager Abrdn slumped after it posted a drop in first-half profit and revenue and struck a cautious note on the outlook. Adjusted pre-tax profit fell to £99m from £163m in the same period a year ago, while adjusted operating profit slid 28% to £115m and fee-based revenues were down 8% to £696m. Abrdn said this was driven by market movements.
On an IFRS basis, the company swung to a pre-tax loss of £320m from a profit of £113m.
Legal & General dipped even as the insurer reported a rise in interim operating profits, driven by higher interest rates and a strong annuity portfolio performance.
Workspace provider IWG tumbled despite saying that its first-half losses had narrowed amid strong demand for hybrid working.
AJ Bell financial analyst Danni Hewson said: “IWG’s latest results indicate progress in the business, with improvements in both occupancy rates and pricing.
“Unfortunately, it cannot escape the cost pressures hurting companies worldwide. Neither can it be relaxed about Covid as certain markets continue to experience lockdowns, which has a negative impact on demand for some of its serviced offices.
“The market did not like the results, with the shares diving more than 17% in early trading. Before the numbers came out, analysts had forecast IWG returning to profit this year at £48.6m. Given the ongoing cost pressures and lockdown disruptions, it seems likely this estimate will have to be scaled back.”
InterContinental Hotels was in the red even as it posted a jump in half-year profits and revenue and hailed increased demand for travel in most of its markets.
Market Movers
FTSE 100 (UKX) 7,479.92 -0.03%
FTSE 250 (MCX) 20,008.38 -0.55%
techMARK (TASX) 4,333.81 -0.69%
FTSE 100 – Risers
Standard Chartered (STAN) 619.20p 1.98%
HSBC Holdings (HSBA) 553.60p 1.48%
BT Group (BT.A) 161.55p 1.48%
Land Securities Group (LAND) 719.60p 1.24%
BP (BP.) 421.20p 1.18%
Pearson (PSON) 889.60p 1.09%
London Stock Exchange Group (LSEG) 8,392.00p 1.04%
Hargreaves Lansdown (HL.) 958.80p 0.99%
Shell (SHEL) 2,182.00p 0.95%
British American Tobacco (BATS) 3,299.00p 0.89%
FTSE 100 – Fallers
Abrdn (ABDN) 165.15p -4.51%
Rolls-Royce Holdings (RR.) 84.50p -2.54%
Entain (ENT) 1,292.50p -2.38%
Flutter Entertainment (CDI) (FLTR) 8,664.00p -2.21%
Halma (HLMA) 2,214.00p -2.17%
Dechra Pharmaceuticals (DPH) 3,478.00p -2.14%
Scottish Mortgage Inv Trust (SMT) 898.60p -2.03%
JD Sports Fashion (JD.) 131.00p -1.91%
Rightmove (RMV) 642.00p -1.86%
Anglo American (AAL) 2,896.50p -1.78%
FTSE 250 – Risers
Polymetal International (POLY) 209.90p 4.43%
Pagegroup (PAGE) 434.60p 3.72%
Energean (ENOG) 1,241.00p 3.68%
Man Group (EMG) 253.50p 2.67%
Capricorn Energy (CNE) 225.80p 2.64%
Just Group (JUST) 76.70p 2.27%
Hiscox Limited (DI) (HSX) 920.20p 2.24%
Lancashire Holdings Limited (LRE) 454.40p 1.84%
Beazley (BEZ) 565.50p 1.80%
Telecom Plus (TEP) 2,135.00p 1.67%
FTSE 250 – Fallers
IWG (IWG) 173.00p -10.36%
ASOS (ASC) 1,005.00p -3.74%
Auction Technology Group (ATG) 916.00p -3.58%
Weir Group (WEIR) 1,619.50p -3.57%
Future (FUTR) 1,710.00p -3.34%
Aston Martin Lagonda Global Holdings (AML) 489.50p -3.30%
Sirius Real Estate Ltd. (SRE) 92.10p -3.26%
Softcat (SCT) 1,380.00p -3.16%
Carnival (CCL) 731.40p -3.00%
Molten Ventures (GROW) 427.40p -3.00%
