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London open: Stocks slide after heavy Wall St losses
London stocks slid in early trade on Wednesday, taking their cue from a heavy selloff on Wall Street on the back of poor manufacturing data, with sharp falls for Nvidia also weighing on sentiment.
At 0825 BST, the FTSE 100 was down 0.6% at 8,245.26 .
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “September began on an ugly note, to say the least. The US equities tumbled after the latest ISM data showed a fifth month of contraction in the US manufacturing, and at accelerated pace. The latter revived the recession worries ahead of this week’s critical US jobs data, and sent the S&P 500 more than 2% down. This was the worst selloff since August 5, when a weak jobs data from the US had boosted the recession worries, the expectation of a 50bp cut from the Federal Reserve and resulted in an almost 10% selloff of the S&P 500.
“The technology stocks led losses yesterday. Nasdaq 100 dived more than 3%, as Nvidia tumbled nearly 10% as part of the broader macroeconomic worries and suspected AI fatigue, and another 2.42% in the afterhours trading on news that the DoJ sent subpoenas to the company because it suspects that Nvidia violated antitrust laws, made switching harder to other chipmakers and penalized companies that didn’t use Nvidia’s AI chips exclusively.”
In equity markets, housebuilder Barratt Developments was on the back foot as it reported a sharp fall in annual profit, citing cost-of-living pressures, higher mortgage rates and limited consumer confidence. The company said pre-tax profit slumped to £170.5m from £705m, with completions down 18.6% to 14,000.
Segro declined after saying it had agreed to buy rival Tritax EuroBox in a deal with an implied enterprise value of around £1.1bn including debt.
Hilton Food also fell despite posting a jump in interim adjusted operating profit, while Direct Line nudged lower as the insurer’s half-year operating profit missed expectations.
Compass Group was a little firmer after an upgrade to ‘outperform’ by BNP Paribas Exane.
Airtel Africa tumbled after a downgrade to ‘neutral’ by JPMorgan, while British Gas owner Centrica lost ground after a cut to ‘hold’ at HSBC.
Packaging firm DS Smith was also in the red after a downgrade to ‘hold’ by Stifel.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ck Infrastructure Holdings Limited | +0.55% | +3.15 | 580.40 |
| 2 |  |
Rolls-royce Holdings Plc | +0.49% | +2.30 | 474.60 |
| 3 |  |
Bt Group Plc | +0.46% | +0.65 | 141.10 |
| 4 |  |
Compass Group Plc | +0.37% | +9.00 | 2,414.00 |
| 5 |  |
Imperial Brands Plc | +0.36% | +8.00 | 2,201.00 |
| 6 |  |
British American Tobacco Plc | +0.28% | +8.00 | 2,875.00 |
| 7 |  |
International Consolidated Airlines Group S.a. | +0.14% | +0.25 | 185.05 |
| 8 |  |
Haleon Plc | +0.05% | +0.20 | 382.60 |
| 9 |  |
Vodafone Group Plc | +0.00% | +0.00 | 75.66 |
| 10 |  |
Wheaton Precious Metals Corp. | +0.00% | +0.00 | 4,320.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | -2.87% | -33.00 | 1,115.50 |
| 2 |  |
Centrica Plc | -2.78% | -3.50 | 122.45 |
| 3 |  |
Ashtead Group Plc | -2.77% | -150.00 | 5,260.00 |
| 4 |  |
Prudential Plc | -2.48% | -16.00 | 629.60 |
| 5 |  |
Segro Plc | -2.30% | -20.20 | 859.80 |
| 6 |  |
Sage Group Plc | -2.18% | -22.10 | 991.40 |
| 7 |  |
Jd Sports Fashion Plc | -2.17% | -2.90 | 130.65 |
| 8 |  |
Scottish Mortgage Investment Trust Plc | -2.17% | -17.60 | 794.00 |
| 9 |  |
Crh Plc | -2.03% | -138.00 | 6,646.00 |
| 10 |  |
Ferguson Enterprises Inc. | -1.93% | -300.00 | 15,250.00 |
US close: Stocks sharply lower following August manufacturing PMIs
Wall Street stocks closed firmly lower on Tuesday as traders returned from the Labor Day long weekend to fresh manufacturing data.
At the close, the Dow Jones Industrial Average was down 1.51% at 40,936.93, while the S&P 500 lost 2.12% to 5,528.93 and the Nasdaq Composite saw out the session 3.26% weaker at 17,136.30.
The Dow closed 626.15 points lower on Tuesday, more than reversing gains recorded in the previous session as the blue-chip index wrapped a fourth consecutive winning month.
Tuesday’s primary focus was manufacturing PMI from both S&P Global and the Institute for Supply Management, with market participants hoping to gain further insight into the state of the US economy throughout August.
S&P Global revised its manufacturing PMI slightly lower to 47.9 in August, down from a preliminary reading of 48, continuing to show that the manufacturing sector has continued to deteriorate year-to-date.
ISM’s PMI, on the other hand, edged slightly higher to 47.2 last month, up from 46.8 in July but falling short of market expectations for a reading of 47.5, extending weak momentum for manufacturing and underscoring the impact of elevated interest rates by the Federal Reserve.
Elsewhere on the macro front, construction spending fell by 0.3% month-on-month in July to $2.16trn, according to the Census Bureau, following an upwardly revised flat reading.
Wednesday newspaper round-up: Councils, Apple, offshore wind farms
Spending on the UK live music sector and associated businesses has hit a record £6.1bn as a wave of huge acts from Elton John to Beyoncé cashed in on the pent-up demand to attend shows in person. Live, the federation representing Britain’s live music industry, revealed that the sector’s contribution to the UK economy topped £6bn for the first time last year, as fans denied live experiences in the Covid pandemic rushed to snap up tickets. – Guardian
Local authority leaders say they are having to drain their financial reserves to keep services afloat and avoid effective bankruptcy. A survey of the mid-tier group of English city councils, which includes Southampton, Hull, Sunderland and Norwich, found that many that had previously avoided financial difficulties during periods of austerity were close to running out of funds. – Guardian
Rachel Reeves’s top pick for investment minister has turned down the role just weeks before a key summit designed to woo international financiers. The Government has been left scrambling to find an alternative investment tsar after Benjamin Wegg-Prosser, chief executive of political advisory firm Global Counsel, declined the position for financial reasons. – Telegraph
Apple has warned Britain’s competition watchdog that its “flawed and insufficient” analysis of the iPhone maker’s dominance in the mobile browser market risks harming consumers and developers. The Silicon Valley tech group claimed the Competition and Markets Authority was using outdated information and “unsubstantiated assertions” from a developers “rather than objective evidence” in its investigation. – The Times
Nine new offshore wind farms were among the record number of projects agreed in the Labour government’s first renewable energy auction. The sixth annual auction round for state subsidies yielded 131 new green infrastructure projects. This was the highest yet, and up from 92 in the previous auction, according to the Department for Energy Security and Net Zero. – The Times
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