Tuesday blues on London markets after long weekend
LONDON’S traders went back to work on yesterday without a spring in their step as a grim forecast from the IMF weighed on global sentiment.
The FTSE 100 closed down 15.1 points, hitting 7,601.28, a drop of 0.2%.
CMC Markets analyst Michael Hewson said: “European markets have got off to a lacklustre start to the week, pulling off their lows of the day, despite the IMF following the World Bank yesterday in downgrading its outlook for the global economy.
“The IMF reduced its global GDP outlook to 3.6%, from 4.4%, while upgrading its inflation outlook to 5.7% in advanced economies.”
He added: “This morning’s initial weakness has given way to a slightly more resilient tone, as today’s sharp decline in oil prices offsets concerns that the start of a renewed Russian offensive on the Donbas region could increase the pressure on the EU to look at a complete embargo on Russian oil and gas.”
But despite a 4.7% drop in the price of Brent crude oil, which reached 107.74 dolThe lars per barrel, Shell’s shares closed up 1.6%, while BP gained 0.4%.
It came after analysts at JPMorgan upgraded what they thought shares in the oil giants will be worth in the future.
“We’ve seen a little bit of softness in airlines, with Wizz Air leading the fallers after being downgraded by HSBC, on the back of its decision to not hedge its fuel costs, unlike its peers easyJet and Ryanair,” Mr Hewson said.
On the continent the Dax closed down 0.1% while Paris’s Cac 40 dropped 0.8% on the day.
On Wall Street the S&P 500 was up 1.3% while the Dow Jones had risen 1.2% by the time markets in Europe had closed.
On currency markets sterling rose 0.1% against both the euro and the dollar. Shortly after stock markets closed in London one pound could buy 1.3003 dollars or 1.2056 euros.
In company news, Cake Box said that sales reached record levels over the past year as they jumped 50% in the year to March, especially over the last six months.
business said that its franchisees had seen a 41% jump in online trading over the last year.
It opened 31 shops over the period and now sells cakes from 185 sites across the country.
Shares closed up 7.3%.
Pearson said that it is still on track to meet its financial guidance despite the end of a key US contract next year.
The business said that the Arizona State University partnership would end after a decade.
It would have a “modest” impact on profit, it added.
Shares closed down 0.7%.
The biggest risers on the FTSE 100 were Smith & Nephew, up 39.5p to 1,234p, Royal Mail, up 9.4p to 338.5p, Ferguson, up 230p to 10,250p, Rolls-Royce, up 2.07p to 95.5p, and Smurfit Kappa, up 63p to 336.6p.
The biggest fallers on the FTSE 100 were Intermediate Capital Group, down 77p to 1,614.5p, ITV, down 3p to 74.24p, Informa, down 21p to 597.4p, JD Sports, down 4p to 143.05p, and Rentokil, down 15p to 514p.