Germany slump raises FTSE pain
GERMANY’S slump into recession today heaped more pressure on a London stock market already fearful over the possibility of a US debt default.
The FTSE 100 index dipped as much as 0.6% before settling 28.51 points lower at 7598.59, having fallen 1.75% yesterday on worries over the earnings exposure of blue-chip companies in the US.
Last night’s decision of Fitch Ratings to put its AAA rating on negative watch highlighted the severity of the situation as politicians continue their US debt ceiling talks.
Recession for Europe’s powerhouse economy added to the downbeat mood after revised figures left Germany’s first quarter GDP 0.3% lower on top of an earlier 0.5% contraction.
One area of cheer came from the tech sector after Nvidia, whose chip designs are used in the gaming, mobile and automotive industries, impressed Wall Street with a flying start to 2023 as AI demand soars.
Investment trust Scottish Mortgage, which has 3.2% of its portfolio tied up in the company, rose 11.2p to 656p near the top of the FTSE 100.
Other blue-chip risers included British Gas owner Centrica, which lifted 3.5p to 117.1p as the lower Ofgem price cap signalled the return of competition to the energy market.
The fallers board included clean air technologies business Johnson Matthey, down 61.5p to 1799.5p after its guidance for this year disappointed City analysts.
In the FTSE 250 index, investors backed Tate & Lyle as shares climbed by 15p to 799.5p after the food ingredients firm sweetened profits by 13% to £253 million.
However, the UK-focused FTSE 250 still weakened 0.5% or 94.93 points to 18,836.23. Fallers included retailer Pets at Home after it reported a 4.8% rise in underlying profits to £136.4 million and forecast a broadly unchanged performance this year.
Shares have been on a strong run lately but lost 11.6p to 355.6p today.