London open: Stocks slide on downbeat US cues
London stocks slid in early trade on Thursday after US markets reversed early losses to end sharply lower overnight.
At 0845 GMT, the FTSE 100 was down 1% at 7,098.25, taking its cue from Wall Street, where stocks tumbled after the first US case of the Omicron variant was identified.
Richard Hunter, head of markets at Interactive Investor, said: "Further developments on the Omicron variant and the interest rate outlook are putting a dampener on sentiment, as investors grapple with the economic impact of both.
"Travel and tourism stocks in the US were the latest casualty of selling pressure as the first case of the new variant hit American shores. The news exacerbated what had been a cautious recovery from the initial waves of the pandemic, with concerns already in place that some were holding back from joining the workforce until social confidence returned. The latest news will likely harm the brittle confidence of the consumer and markdowns were in evidence across each of the major indices.
"A tentatively positive showing from Asian markets overnight has not fed through to the UK in opening trade, with the indices currently switching between risk on and risk off on a daily basis. Investors are caught between reflecting on what has been a positive response to the pandemic, which has fed through to strongly improved corporate earnings, set against the implications of the latest (and indeed future) variants on delaying a full return to economic normality."
In equity markets, financial services platform AJ Bell slumped even after it lifted its dividend and announced a special payout to shareholders as it increased annual profits by 13%. The company’s total dividend was hiked by 13% to 6.96p a share, augmented by an extra 5p each. Pre-tax profits for the year to September 30 rose to £55.1m from £48.6m.
Abrdn was also weaker following a report it’s on the verge of finalising a £1.5bn takeover of Interactive Investor. According to Sky News, abrdn was on Wednesday applying the finishing touches to a takeover, in a move that will transform the asset manager’s personal investing capabilities.
Royal Mail, 3i Group, Ninety One, Johnson Matthey, Bellway and Pets at Home were all in the red as they traded without entitlement to the dividend.
On the upside, Workspace rallied after an upgrade to ‘buy’ from ‘neutral’ at Bank of America Merrill Lynch.
Market Movers
FTSE 100 (UKX) 7,098.25 -0.98%
FTSE 250 (MCX) 22,673.50 -1.04%
techMARK (TASX) 4,382.38 -0.69%
FTSE 100 - Risers
Unilever (ULVR) 3,866.00p 0.30%
GlaxoSmithKline (GSK) 1,545.00p 0.25%
Reckitt Benckiser Group (RKT) 6,148.00p 0.20%
United Utilities Group (UU.) 1,085.00p 0.05%
Taylor Wimpey (TW.) 162.40p 0.03%
AstraZeneca (AZN) 8,296.00p -0.22%
Kingfisher (KGF) 322.20p -0.22%
Pearson (PSON) 582.00p -0.24%
Phoenix Group Holdings (PHNX) 642.60p -0.25%
Meggitt (MGGT) 739.00p -0.27%
FTSE 100 - Fallers
Royal Mail (RMG) 475.10p -6.40%
Pershing Square Holdings Ltd NPV (PSH) 2,900.00p -3.81%
Fresnillo (FRES) 876.60p -3.35%
3i Group (III) 1,391.00p -2.96%
Scottish Mortgage Inv Trust (SMT) 1,460.00p -2.86%
Entain (ENT) 1,671.50p -2.85%
JD Sports Fashion (JD.) 220.45p -2.50%
Intermediate Capital Group (ICP) 2,133.00p -2.38%
ITV (ITV) 110.45p -2.34%
Abrdn (ABDN) 233.60p -2.26%
FTSE 250 - Risers
Workspace Group (WKP) 852.00p 4.03%
FirstGroup (FGP) 97.05p 1.89%
Inchcape (INCH) 859.50p 1.48%
XP Power Ltd. (DI) (XPP) 5,190.00p 1.37%
Countryside Properties (CSP) 442.00p 1.24%
Trainline (TRN) 288.20p 1.19%
Investec (INVP) 383.30p 0.47%
HICL Infrastructure (HICL) 168.80p 0.36%
Dunelm Group (DNLM) 1,369.00p 0.07%
Centrica (CNA) 65.52p 0.03%
FTSE 250 - Fallers
AJ Bell (AJB) 374.00p -5.36%
Carnival (CCL) 1,163.40p -5.26%
Endeavour Mining (EDV) 1,660.00p -4.05%
Ninety One (N91) 249.20p -3.63%
Aston Martin Lagonda Global Holdings (AML) 1,483.50p -3.36%
Edinburgh Worldwide Inv Trust (EWI) 305.50p -3.32%
888 Holdings (888) 304.80p -3.24%
Bellway (BWY) 3,074.00p -3.21%
Baillie Gifford US Growth Trust (USA) 330.00p -3.08%
Liontrust Asset Management (LIO) 2,235.00p -2.83%