London stocks fell at the end of the week amid investors’ jitters around the prospects for policy tightening by the US central bank and after the Office of National Statistics reported that UK retail sales cratered at the end of 2021.
The FTSE 100 ended down 1.20% or 90.88 points at 7,494.13, alongside a 1.99% or 451.74 point drop on the FTSE 250 to 22,263.24.
Overnight, the Dow Industrials, S&P 500 and Nasdaq Composite all gave back about 1% and on Friday they were registering similarly-sized falls.
“Is this the bear market proper – an end to the ’09-’18 expansion? Jeremy Grantham reckons trend for the S&P 500 is 2,500 – we’re at 4,400 still. Who’s up for a 50% decline? The Fed would try to stop that but can it?,” Markets.com chief market analyst Neil Wilson mused out loud.
Worth noting, Thursday’s losses in the US materialised despite Janet Yellen, the US Treasury chief, sounding a positive note on the inflation outlook for the year ahead, indicating that it might fall sharply should the pandemic be brought under control.
Adding to the downbeat sentiment, shares of US video-streaming giant Netflix were tumbling 21% after the company’s fourth quarter subscriber growth numbers disappointed analysts.
On home shores, the latest economic news was very downbeat.
According to the Office for National Statistics, UK retail sales dropped 3.7% month-on-month, which was far worse than the 0.6% drop expected by economists.
Mirroring that drop in retail sales, consultancy GfK’s Consumer Confidence Index fell four points in January, to -19, its lowest level since February 2021. GfK attributed the fall to expected rises in inflation, fuel and interest rates.
Joe Staton, Client Strategy Director at GfK, said: ” Despite some good news about the easing of Covid restrictions, consumers are clearly bracing themselves for surging inflation, rising fuel bills and the prospect of interest rate rises.”
In the background, traders were also keeping a close eye on a potentially critical meetings between the US and Russian foreign policy chiefs in Geneva.
Rio Tinto gets the boot in Serbia
Shares in Rio Tinto fell in both London and Australia on Friday, after Serbia revoked the miner’s lithium exploration licences. The surprise decision, which coincides with a cooling of relations between Belgrade and Canberra over Serbian tennis player Novak Djokovic, is a major blow for the Anglo-Australian miner. It is seeking to become Europe’s largest supply of the metal, a key ingredient in the batteries used in electric vehicles.
Close Brothers Group reported that the firm had “performed well” over the first half of its financial year with “good” loan book growth and “strong” margins in Banking. Growth momentum at Close Brothers Asset Management had continued, although trading income in Winterflood has moderated since the end of the 2021 financial year.
Investment company Ninety One on Friday said assets under management at December 31 had risen to £141.7bn compared with £128.6bn a year earlier. The figure was a slight rise on the £140bn recorded at the end of last September, Ninety One said in an extremely short trading update.
Promotional products business 4imprint Group said on Friday that full-year unaudited group revenues had shot up in 2021, pushing pre-tax profits towards the upper end of analysts’ forecasts. 4imprint stated revenues for the 2021 financial year was approximately $787.0m, an increase of 41% year-on-year, as its total order count was roughly 90% of the figure seen in 2019, demonstrating “a strong recovery” in the business over the course of the year.
Market Movers
FTSE 100 (UKX) 7,494.13 -1.20%
FTSE 250 (MCX) 22,263.24 -1.99%
techMARK (TASX) 4,444.07 -1.70%
FTSE 100 – Risers
British American Tobacco (BATS) 3,138.00p 0.79%
Burberry Group (BRBY) 1,925.50p 0.79%
GlaxoSmithKline (GSK) 1,647.20p 0.65%
Unilever (ULVR) 3,665.50p 0.53%
Tesco (TSCO) 288.75p 0.50%
Imperial Brands (IMB) 1,731.00p 0.38%
Diageo (DGE) 3,757.50p 0.33%
Reckitt Benckiser Group (RKT) 6,429.00p 0.30%
Avast (AVST) 602.00p 0.20%
Associated British Foods (ABF) 2,042.00p 0.00%
FTSE 100 – Fallers
Entain (ENT) 1,635.00p -5.16%
Evraz (EVR) 540.60p -4.18%
Scottish Mortgage Inv Trust (SMT) 1,114.50p -3.86%
Pershing Square Holdings Ltd NPV (PSH) 2,795.00p -3.65%
Fresnillo (FRES) 832.80p -3.62%
Pearson (PSON) 659.00p -3.51%
Smith (DS) (SMDS) 377.50p -3.35%
Flutter Entertainment (CDI) (FLTR) 10,965.00p -3.35%
Rolls-Royce Holdings (RR.) 119.72p -3.23%
Intermediate Capital Group (ICP) 1,916.50p -3.17%
FTSE 250 – Risers
Wood Group (John) (WG.) 235.00p 1.73%
4Imprint Group (FOUR) 2,675.00p 1.71%
Premier Foods (PFD) 120.60p 1.69%
Chemring Group (CHG) 290.50p 1.22%
Oxford Instruments (OXIG) 2,250.00p 1.12%
BH Macro Ltd. GBP Shares (BHMG) 3,780.00p 1.07%
FirstGroup (FGP) 105.00p 0.96%
Airtel Africa (AAF) 144.60p 0.56%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 503.00p 0.40%
Sirius Real Estate Ltd. (SRE) 130.40p 0.31%
FTSE 250 – Fallers
Hipgnosis Songs Fund Limited C Shs NPV (SONC) 112.50p -100.00%
Playtech (PTEC) 579.50p -20.67%
Trainline (TRN) 235.00p -10.58%
Baltic Classifieds Group (BCG) 199.00p -8.72%
Trustpilot Group (TRST) 214.80p -7.73%
Hochschild Mining (HOC) 118.20p -7.15%
Baillie Gifford US Growth Trust (USA) 230.50p -6.68%
Close Brothers Group (CBG) 1,277.00p -6.08%
Provident Financial (PFG) 344.20p -5.65%
Cineworld Group (CINE) 41.95p -5.62%
