- The FTSE 100 drops 130 points
- The UK economy is growing by only 0.8%
- B&M and Burberry become ex-savages
10.50 am: Aston Martin leads the players
The FTSE 100 remained close to the bottom for the day, falling from 1.86% to 7176.40.
The more domestic-oriented FTSE 250 is doing even worse, down 2.18% to 18,623.86.
Aston Martin Lagonda Global Holdings PLC (LSE: AML) is the largest decline in the index with a medium capitalization, a decline of 10.45% after a report in Autocar that the luxury car group is looking for funds to strengthen its financial position ahead of planned investments.
Many companies have seen their shares quoted without dividends, including Bank of Georgia Group PLC (LSE: BGEO), which fell 7.41%.
9.47 am: Car production in the UK rises for the first time in 11 months
Some positive economic news in the UK, provided you like cars.
Car production in the UK rose 13.3% in May, the first increase in 10 consecutive months of decline, according to the Car Manufacturers and Dealers Association.
The production of battery electric cars has doubled, increasing by 108.3%, with 4525 produced.
But SMMT added: “This rise, which comes despite the closure of a major car plant last year, along with the change of a key model to another, must, however, be seen in the context of May 2021, which is still suffering significantly from the roadside pandemic. winds
“In fact, production remains 46.3% below the month before the 2019 pandemic, with ongoing supply chain problems, growing economic uncertainty, rising business costs and disruptions caused by the war in Ukraine.
And the sector is calling for urgent government assistance to mitigate the £ 90m increase in energy costs and to protect the competitiveness of the UK car industry.
Mike House, CEO of SMMT, said: “May’s return to growth in car production in the UK is extremely welcome after 10 months of decline, which shows the fundamental resilience of the sector.
“However, any recovery will be gradual, as supply chain supply remains volatile, business costs are volatile and geopolitical instability is still very real. As the industry competes for decarbonisation, we must protect the competitiveness of production, stimulate investment and develop the skills base. Government and industry are playing a role in this transformation, and cooperation will be essential if the UK is to remain at the forefront of automotive innovation. “
9.05 am: Paradise apple and Barratt slide
Homeowners are among the leaders to fall after Nationwide announced a slowdown in the UK housing market.
Persimmon PLC (LSE: PSN) was down 4.28%, while Barratt Developments PLC (LSE: BDEV) lost 3.74%.
Susanna Streetter, a senior investment and market analyst at Hargreaves Lansdown, said: “There are preliminary signs that homebuyers are abandoning the hot housing market, with rising house prices falling slightly.
“But concerns about rising interest rates and the potential to be ruled out by cheaper deals in the future still seem to fuel this race for movement for now. However, investors are nervous about the prospect of a potential drop in prices next year, which could affect demand for new homes. Builders Persimmon and Barratt Developments fell about 4% at the start of trading, while Bellway fell 3%, adding to a sharp decline since the beginning of the year. “
Andrew Montlake, managing director of mortgage broker Coreco, also expects growth to continue to slow: “We have almost certainly passed the peak of the real estate market, with the rate of price growth now slowly declining.
“The era of super-cheap money is over, and this, combined with the unprecedented crisis in the cost of living and rising interest rates, is beginning to affect rising house prices. Increased borrowing costs and huge pressure on household finances will almost certainly start to curb demand in the coming months, leading to a slowdown in prices in the second half of the year. The only constant in these times of flow, of course, is the lack of supply and homes under construction. good quality housing at affordable prices will keep prices going even as we go through an unprecedented crisis in the cost of living. “
Among the others that fell on the leading index are several companies that go out without dividends.
B&M European Value Retail SA (LSE: BME) was down 5.1%, while Burberry Group PLC (LSE: BRBY) was down 3.89%.
Overall, the FTSE 100 is heading in only one direction, now down 130.07 points or 1.78% at 7182.25.
8.30am: No positivity as Footsie fails
Leading stocks opened sharply lower after half a year of weak trading ended, with investors worried about a global slowdown or even a recession as central banks raised interest rates to try to curb rising inflation.
Russia’s war against Ukraine shows no signs of ending, which heightens concern as long as the lasting effects of COVID-19 remain.
The FTSE 100 index fell 121.15 points or 1.66% to 7191.17 as a result of a lot of hawkish comments from central bankers on Wednesday at the ECB’s forum in Portugal.
Richard Hunter, Head of Markets at Interactive Investor, said: “The lack of any immediate positive catalysts, combined with careful comments on the outlook from central banks, pulled the rug out of the FTSE100 … at the opening of stock exchanges.
“The losses were widespread, with retailers and miners being particularly weak, while builders were also under additional pressure given the challenges facing the UK economy.
“The collapse leaves the index down 2.5% so far this year, almost doubling the loss from the previous session and showing once again how uncertain the current background is.
7.48 am: UK GDP rises by 0.8%, while house prices rise by 10.7%
The slowdown in the UK economy in the first quarter was confirmed today, with final estimates in line with the initial reading.
On a quarterly basis, the UK’s GDP grew by an unaudited 0.8% in the first three months of the year, according to the Office for National Statistics, down 1.3% in the fourth quarter.
On an annual basis, the economy grew by 8.7% in the first quarter, compared to 6.6% in the last three months of 2021.
ONS Director of Economic Statistics Darren Morgan said: “Our latest estimate of economic growth in the first quarter has not been revised as a whole, indicating that the UK economy continues to recover from the pandemic.
But real household disposable incomes fell 0.2%, a larger drop than previously expected.
Meanwhile, there are signs of a moderate slowdown in the UK housing market, according to the latest Nationwide data, although the rise is still in double digits.
The annual growth of house prices was 10.7% in June, compared to 11.2% in May.
Prices rose by 0.3% per month, after taking into account seasonal effects, the 11th consecutive monthly increase.
The price of a typical home in the UK has climbed to a new record of £ 271,613, with average prices rising by more than £ 26,000 in the last year
Robert Gardner, chief economist at Nationwide, said: “There are preliminary signs of a slowdown, with the number of mortgages approved for home purchases returning to pre-pandemic levels in April, and inspectors reporting some easing of new inquiries from buyers. However, the housing market has maintained a surprising amount of momentum given the growing pressure on household budgets from high inflation, which has already led to record low consumer confidence.
“Part of the sustainability probably reflects the current strength of the labor market, where the number of vacancies has exceeded the number of unemployed in recent months. In addition, the unemployment rate remains close to a 50-year low. At the same time, the availability of housing on the market remained low, which helped maintain upward pressure on housing prices.
“The market is expected to slow further as the pressure on household finances intensifies in the coming quarters, with inflation expected to reach double digits by the end of the year. In addition, the Bank of England is expected to raise interest rates further, which will also have a cooling effect on the market if mortgage rates improve. “
Regionally, the Southwest overtook Wales as the strongest performer in the second quarter, while London was the weakest.
Since the beginning of the pandemic, the same pattern has been maintained, with the Southwest performing best and London taking the wooden spoon.
6.50 am: Footsie will fall again
The FTSE 100 has been prepared for another major downturn in the open, with the UK economy being the main point of discussion.
The companies’ forecasts for financial spreads bet on Footsie with more than 50 points at the beginning of trading after mixed results in the US and Asia overnight.
Today is the final reading of the first quarter of the United Kingdom with a consensus that this will confirm a sharp slowdown in economic activity.
Economists expect the final figure to grow by about 0.8%, down 1.3% in the previous quarter.
Nationwide’s housing index should also show whether rising interest rates and recent mortgage increases are beginning to affect the housing market.
Bunzl and Hunting are selected by the companies that are releasing updates today (read more).
Abroad, China’s economy has begun to improve again as Covid’s restrictions have eased.
Its services sector grew the fastest in 13 months, with the official number rising to 54.7 from 48.2 in June. Over 50 points to expand.
Production in China also recovered to 50.2 from 49.6 a month earlier, again showing a return to overall growth.
Jeffrey Halley, a senior analyst at Oanda, described it as “a beautiful rebound when reopened.”
US markets have had a slow day and remain on course for one of their worst halves in decades.
“The market is struggling to find direction,” was a common refrain with nerves about the reason for the upcoming results and whether the forecasts are too optimistic, which adds to the concern.
Unless there is a dramatic change in mood today, …
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