London stocks were still in the red by midday on Wednesday, although retailers Dunelm and B&M bucked the trend after well-received updates.
The FTSE 100 was down 0.5% at 7,114.84.
IG market analyst Joshua Mahony said: “Another day of losses look to be on the cards if early European price action is any guide, with widespread losses bringing the DAX into a one-month low.
“UK plans to raise taxes, coupled with a gradual transition towards tighter monetary policy serve to highlight how the focus is likely to shift towards withdrawing and paying for stimulus rather than implementing new support measures.
“The theme of monetary withdrawal comes up once again tomorrow, with the ECB providing yet another opportunity to highlight how the current direction of travel is being driven by the hawks. As such, it comes as no surprise to see caution ahead of an ECB meeting that could see Lagarde & co trim their bond buying programme. While Friday’s US non-farm payrolls figure did raise hopes of a potential delay to tapering, the recent rise in US 10-year yields highlight how markets see rates rising before long.”
In equity markets, housebuilders were among the worst performers, with Taylor Wimpey, Barratt Developments and Persimmon all weaker.
On the upside, B&M European Value Retail surged after the discount retailer said it expects interim core earnings to be ahead of analysts’ forecasts on the back of stronger gross margins.
Smiths Group rose after agreeing to sell is medical business to US-based ICU Medical for $2.4bn, withdrawing its support for a rival $2bn offer from TA Associates agreed last month.
Homewares retailer Dunelm also gained after it said 2022 full-year profits would be “modestly” ahead of expectations as it posted a strong rise in 2021 earnings, driven by online sales during the Covid pandemic.
Morrisons was in focus as it said it is in talks with the Takeover Panel about launching an auction process for the supermarket chain after Fortress Investment Group and Clayton Dubilier & Rice failed to declare their bids final.
Market Movers
FTSE 100 (UKX) 7,114.84 -0.48%
FTSE 250 (MCX) 23,988.64 -0.45%
techMARK (TASX) 4,779.71 -0.65%
FTSE 100 – Risers
B&M European Value Retail S.A. (DI) (BME) 576.20p 6.59%
Smiths Group (SMIN) 1,462.00p 2.78%
International Consolidated Airlines Group SA (CDI) (IAG) 158.06p 2.07%
Whitbread (WTB) 3,319.00p 1.81%
Rolls-Royce Holdings (RR.) 112.76p 1.70%
JD Sports Fashion (JD.) 1,054.50p 1.25%
InterContinental Hotels Group (IHG) 4,607.00p 0.96%
Polymetal International (POLY) 1,453.50p 0.94%
BP (BP.) 300.55p 0.72%
Unilever (ULVR) 4,007.00p 0.45%
FTSE 100 – Fallers
Land Securities Group (LAND) 711.60p -3.03%
Taylor Wimpey (TW.) 171.70p -2.47%
Royal Mail (RMG) 484.70p -2.18%
Barratt Developments (BDEV) 693.20p -2.17%
Persimmon (PSN) 2,770.00p -2.15%
Melrose Industries (MRO) 185.80p -1.90%
British Land Company (BLND) 526.60p -1.86%
Berkeley Group Holdings (The) (BKG) 4,571.50p -1.86%
Hikma Pharmaceuticals (HIK) 2,531.00p -1.75%
Smith (DS) (SMDS) 454.70p -1.64%
FTSE 250 – Risers
Dunelm Group (DNLM) 1,441.00p 12.05%
Liontrust Asset Management (LIO) 2,540.00p 4.31%
easyJet (EZJ) 806.80p 3.70%
Capita (CPI) 49.50p 3.45%
Wizz Air Holdings (WIZZ) 5,058.00p 2.53%
SSP Group (SSPG) 273.00p 2.48%
Restaurant Group (RTN) 122.80p 2.16%
Carnival (CCL) 1,553.20p 2.13%
Mediclinic International (MDC) 312.00p 1.56%
Cineworld Group (CINE) 67.98p 1.55%
FTSE 250 – Fallers
Inchcape (INCH) 884.50p -5.20%
Biffa (BIFF) 387.00p -4.21%
Harbour Energy (HBR) 369.00p -4.21%
Workspace Group (WKP) 905.00p -3.83%
Big Yellow Group (BYG) 1,509.00p -3.76%
Great Portland Estates (GPOR) 761.50p -3.06%
Safestore Holdings (SAFE) 1,135.00p -2.91%
Vistry Group (VTY) 1,189.50p -2.86%
888 Holdings (888) 402.40p -2.80%
Virgin Money UK (VMUK) 202.20p -2.79%
