FTSE 100 down 1% and set for 2023 low close, Hang Seng falls 2%
The FTSE 100 index is in danger of setting its lowest close of the year after falling 1% or 71.77 points to 7,238.44.
London’s top flight is on a six session losing run that has cost the benchmark more than 250 points since Monday and 6% across August.
Today’s mood wasn’t helped by the crisis in China’s debt-laden property sector after Evergrande last night filed for bankruptcy protection in the United States.
The Hang Seng index in Hong Kong closed 2% lower and is now down by more than 10% this year amid China’s disappointing economic recovery.
On Wall Street, the recent optimism over a soft landing for the US economy has been punctured by signs the Federal Reserve is not yet done raising interest rates.
The speculation yesterday pushed the US 10-year Treasury yield, which is used as a benchmark for global borrowing costs, to its highest daily close in 15 years.
Traders fear the uncertainty could continue for another week until Federal Reserve chair Jerome Powell addresses the Jackson Hole symposium next Friday.
The S&P 500 index and Nasdaq Composite closed around 1% lower last night, a performance that set the FTSE 100 index towards a nine-month low.
Big fallers in London include the mining stocks Antofagasta and Anglo American, down by 3% as traders revised expectations for China demand.
Other big fallers included the luxury goods group Burberry, which has lost more than 4% of its value in the past week and today dropped another 48p to 2137p.
BAE Systems put back 7p to 962.8p after falling 4% yesterday on jitters over the £4.4 billion deal for Colorado-based Ball Aerospace, a move that will boost the UK company’s capabilities in spacecraft and missile development.
The bleak mood was mirrored in the UK-focused FTSE 250 index, which fell 1% or 188.87 points to 18,167.20. Stocks down by more than 2% included the US-focused retailer WH Smith, National Express owner Mobico and the property firm British Land.
Qatari royal mulls sale of luxury Knightsbridge homes for £370 Million
A Qatari sheikh, whose son is fronting a bid for Manchester United Football Club, is mulling the sale of two luxury houses in London’s most exclusive districts with a combined asking price of £370 million.
Sheikh Hamad bin Jassim bin Jaber Al Thani is potentially planning to sell a triplex penthouse at the One Hyde Park project in London’s upscale Knightsbridge district for about £220 million, as well as a property he owns nearby at Belgrave Square for about £150 million, according to people familiar with the matter.
Sheikh Hamad may decide against a sale if offers fall short of the asking price, the people said. Efforts to reach the royal for comment through his private investment firm Al Mirqab Capital and several family members were unsuccessful.
Kingspan delists from London Stock Exchange
The future of Irish companies in the City was in focus today, as building materials firm Kingspan officially delisted from the London Stock Exchange.
Kingspan was one of three Irish companies to deliver a blow to London in the space of two months, joining rival building supplies firm CRH and betting giant Flutter when it announced plans to delist in April.
The business faced widespread criticism for supplying 5% of the insulation used at Grenfell Tower. The public inquiry into the Grenfell fire heard Kingspan’s K15 product became a “raging inferno” in internal tests. Kingspan says K15 was “misused” in an unsafe manner at the tower, and noted that the inquiry said the exterior cladding provided by other firms was “the principal reason” the fire spread.
Today, Kingspan also revealed its profits ticked up in the first half of the year, to €435.5 million £372.2 million) despite high interest rates deterring construction. It said it expects to see deflation in the costs of building materials during this quarter.
The shares continue to trade in Dublin, where they are down 3.5%.
Wilko union reassures staff as administrators mull bids
The GMB union, which represents around a third of Wilko’s 12,000 staff, reassured staff and confirmed that administrators were weighing multiple bids to save the retailer, as reported in the Standard yesterday.
Andy Prendergast, GMB national secretary, said: “GMB has met with administrators and the company as part of the formal consultation process.
“We can confirm there have been expressions of interest from organisations who are considering taking over at least some parts of the business.
“These are still at an early stage, but means there are genuine grounds for hope.
“Whilst this process continues staff will continue to be paid and kept on. All stores are continuing to trade, and deliveries of new stock will continue.”
It is not expected that any firm will by the entirety of Wilko, but there is hope that a number of the more profitable stores can be saved.
Poll: One in three London homeowners think they will struggle with mortgage costs in next six months
One in three London homeowners say they will struggle to meet their mortgage payments in the next six months, new polling reveals.
The survey, conducted by YouGov and commissioned by City Hall, showed that 11 per cent of the capital’s mortgage payers think they will “definitely” struggle to keep up with payments and a further 23 per cent will “probably” struggle.
The combined total of 34 percent saying they expect to struggle is up from 21 per cent in January.
FTSE 100 extends losing streak, BAE steadies
The London market’s run of losses rolled into a sixth session today as the FTSE 100 index fell another 28.10 points to 7,282.11, taking the deficit for this week to 244 points.
Stocks in the red included Rolls-Royce, which fell 2.45p to 199.95p, and the luxury goods group Burberry after a decline of 26p to 2159p.
BAE Systems rose 4.6p to 960.4p after shares fell heavily yesterday on jitters over the scale of the £4.4 billion acquisition of Colorado-based Ball Aerospace.
The FTSE 250 index fell 0.5% or 97.05 points to 18,259.02, with cyber security firm Darktrace and National Express owner Mobico among the stocks 2% lower.
Capital Economics: 0.5% fall in real consumer spending expected
Bad retail sales in July were mostly driven by bad weather, but also represent weakening appetite for consumer spending, Capital Economics deputy chief UK economist Ruth Gregory said.
“The 1.2% m/m fall in retail sales volumes in July probably had more to do with the unusually wet weather than the impact of higher interest rates on consumer spending,” she said. “But with the Bank of England’s interest rate hikes still feeding through and consumer confidence falling, we remain downbeat on the outlook for overall spending this year.
“Overall, the figures were a bit worse than we had expected. And our view is still that the growing drag on activity from higher interest rates will eventually generate a 0.5% peak to trough fall in real consumer spending.”
FTSE drops and Bitcoin down 5%
A few minutes into the day’s trading session in London, the FTSE has opened lower, while Bitcoin has fallen 5% since yesterday.
Here’s a look at your key market data:
‘Barbenheimer’ boost reverses first-half decline at cinema chain Everyman
High-end cinema chain Everyman’s revenue and profits fell in the first half of the year, but it said the joint releases of Barbie and Oppenheimer on 21 July boosted sales and shows “cinema remains as relevant as ever”.
The cinema – known for its comfortable seats and food options like pizza and hot honey halloumi – brought in revenue of £38.3 million in the six months to 30 June, down slightly from 2022. Profit, meanwhile, fell by 22.7% to £5.8 million.
But things pickwed up in July, which the business put down to ‘Barbenheimer’, which drove a record week for admissions. Revenue for the month came to £10.6 million, while profit doubled July 2022’s total at £2.6 million.
Great Portland snaps up property in Soho Square in £70m deal
Property group Great Portland Estates has acquired land in London’s Soho Square in a £70 million deal.
The company has bought the freehold interests at 16/19 Soho Square, 29/43 Oxford Street and 7 Falconberg Mews from Belgravia & Chelsea Property Services.
The deal values the properties at £772 per square foot and includes planning permission to demolish some buildings and construct up to 90,000 square foot of office and retail space.
Alexa Baden-Powell, Senior Investment Manager, said, “This acquisition represents a fantastic opportunity for us to develop a strategic West End freehold site into a best-in-class headquarters building with excellent sustainability credentials.”
