London open: Stocks slump after Wall Street selloff

London equity markets slumped in early trade on Thursday, taking their cue from a weak session on Wall Street, where stocks suffered their worst losses since June 2020.

At 0850 BST, the FTSE 100 was 0.9% lower at 7,368.65. Overnight, the S&P 500 closed down 4%, while the tech-heavy Nasdaq ended 4.7% weaker.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "A red wall of worry has built up across financial markets with investors increasingly nervous that economies are set to career into recession."

She said traders are trying to assess just how difficult it is going to be for central banks to rein in rampant inflation without pushing economies into reverse.

"The slide was sparked by the US retail giant Target warning that customers were already buying fewer high ticket items like furniture and electronics, with higher fuel prices and supply chain costs also eating into margins. It comes hot on the heels of Walmart’s. With consumer spending power expected to be eroded further through interest rate rises, the worry is that Target’s pain is a precursor for yet more struggles to come for retailers. A trend also seems to be emerging of people wanting to save their dollars to spend on experiences like holidays rather than homewares with luggage at Target selling fast.

"Consumers are showing more caution but after the pandemic lockdowns there is clearly pent up demand for travel with airlines like easyJet ramping up capacity to meet demand and bookings at restaurants surging. So while goods price inflation may fall, it may be hard to keep a lid on the price of services, particularly with higher wage costs amid the fight for labour also being passed onto customers."

In equity markets, Kingfisher, Tesco, Unilever, PageGroup, Bunzl and GlaxoSmithKline all fell as they traded without entitlement to the dividend.

Royal Mail was under the cosh as it warned of price increases and £350m in cost cuts to combat soaring inflation after reporting a rise in full-year profits.

On the upside, Airtel Africa rose after saying that its subsidiary SmartCash PSB had started operations in Nigeria.

HomeServe surged after the emergency home repairs group agreed to be bought by Canada’s Brookfield Asset Management in a £4.1bn deal.

Auction Technology also gained as it lifted its full-year revenue growth guidance following a better-than-expected first half.

Budget airline easyJet flew higher after saying it expects third-quarter capacity to be 90% of pre-pandemic levels and that it had narrowed half-year loses.

Market Movers

FTSE 100 (UKX) 7,368.65 -0.93%
FTSE 250 (MCX) 19,726.18 -1.12%
techMARK (TASX) 4,272.50 -0.91%

FTSE 100 - Risers

Dechra Pharmaceuticals (DPH) 3,342.00p 2.39%
Airtel Africa (AAF) 145.50p 1.75%
Hikma Pharmaceuticals (HIK) 1,692.50p 0.83%
BAE Systems (BA.) 759.20p 0.53%
Fresnillo (FRES) 751.20p 0.48%
BP (BP.) 424.35p 0.47%
Endeavour Mining (EDV) 1,761.00p 0.11%
Rio Tinto (RIO) 5,376.00p 0.07%
Meggitt (MGGT) 778.00p 0.00%
Anglo American (AAL) 3,412.50p -0.01%

FTSE 100 - Fallers

Royal Mail (RMG) 323.20p -5.61%
Kingfisher (KGF) 241.20p -4.85%
Tesco (TSCO) 253.20p -4.85%
Scottish Mortgage Inv Trust (SMT) 748.00p -3.91%
3i Group (III) 1,275.00p -3.70%
Unilever (ULVR) 3,518.50p -2.96%
Entain (ENT) 1,356.50p -2.55%
DCC (CDI) (DCC) 5,904.00p -2.41%
Next (NXT) 6,158.00p -2.28%
Abrdn (ABDN) 183.00p -2.27%

FTSE 250 - Risers

Homeserve (HSV) 1,169.00p 11.02%
Auction Technology Group (ATG) 982.00p 4.25%
easyJet (EZJ) 513.60p 2.51%
Euromoney Institutional Investor (ERM) 1,060.00p 2.32%
Hochschild Mining (HOC) 103.50p 1.37%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 316.50p 0.80%
Elementis (ELM) 112.50p 0.72%
Vivo Energy (VVO) 146.20p 0.69%
Schroder Oriental Income Fund Ltd. (SOI) 265.00p 0.38%
Britvic (BVIC) 821.50p 0.37%

FTSE 250 - Fallers

Chrysalis Investments Limited NPV (CHRY) 122.20p -6.00%
Trustpilot Group (TRST) 105.10p -5.14%
Pagegroup (PAGE) 462.20p -5.05%
Clipper Logistics (CLG) 820.00p -4.65%
Carnival (CCL) 1,007.50p -4.32%
Watches of Switzerland Group (WOSG) 879.00p -4.20%
Vesuvius (VSVS) 340.00p -3.68%
Convatec Group (CTEC) 216.80p -3.64%
Mitchells & Butlers (MAB) 203.80p -3.41%
Blackrock Throgmorton Trust (THRG) 570.00p -3.39%