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London’s FTSE 100 has continued its disappointing start to the year as sentiment soured following weak performances from grocers and insurers, as well as anxiety over future interest rate cuts.
The capital’s premier bluechip index slipped 0.27 per cent lower at 7,663.02, while the FTSE 250, which is more aligned with the health of the domestic economy, traded largely flat at 19,294.97.
The index was dragged down by its biggest loser, insurance giant Admiral, which fell 6.1 per cent. Direct Line also plunged 7.3 per cent to become the worst performing stock on the FTSE 250.
Shares nosedived after the City watchdog’s insurance head suggested that firms may soon face regulatory action for premium finance.
In a trading update, grocery giant Sainsbury’s said third-quarter food sales grew 9.3 per cent while Christmas grocery sales jumped up 8.6 per cent, driven by cash-strapped shoppers using its loyalty card scheme.
Despite the bumper festive period, the company disappointed on non-food sales maintained its guidance for the year. The news sent shares down 5.1 per cent, making Sainsbury’s the second-biggest loser on the FTSE 100.
Marks and Spencer stock also dropped 3.4 per cent.
Bitcoin surged as much as $1,000 (£786) last night after the US Securities and Exchange Commission (SEC) said on X, formerly Twitter, that it had approved bitcoin exchange-traded funds. The agency later said its account had been “compromised”.
“It’s hard to assign a singular reason for the lack of enthusiasm so far month to date apart from a great deal of uncertainty around the prospects for the global economy and the timeline for central bank rate cuts,” said CMC Markets analyst Michael Hewson.
Russ Mould, investment director at AJ Bell, added: “The market is still trying to work out if central banks are going to under-promise and over-deliver on interest rates cuts or if they really mean it when they say any such move is still some way off.”
Markets will have to wait until Thursday’s US inflation figures for any further detail on the path of interest rates.
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Market updates
Almost £2 of every £100 spent in UK hospitality is being blown on cheap baked goods at Greggs, the no-frills chain told markets today. The stock was the FTSE 250’s biggest winner after shares skyrocketed more than six per cent.
The Gym Group said membership had increased to 850,000 at the end of the as more and more Brits joined the low-cost gym operator last year in an attempt to cut the pounds. Shares rose 1.1 per cent.
Homebuilder Persimmon said in 2023 it completed the building of 9,222 new homes, down 33 per cent from the previous year which was just shy of 15,000, amid waning demand. Shares jumped 3.2 per cent.
Pennon Water has acquired Sutton and East Surrey (SES) Water and other ancillary businesses from its holding company for £89m to expand its operations across the country. Shares ticked up 0.8 per cent.
FTSE 100 top five risers and fallers
Risers
1 – Berkeley, up 1.8 per cent
2 – Intertek, up 1.2 per cent
3 – Relx, up 1.1 per cent
4 – BAE Systems, up 1.1 per cent
5 – Intermediate Capital, up 1 per cent
Fallers
1 – Admiral, down 6.1 per cent
2 – Sainsbury, down 5.3 per cent
3 – Marks and Spencer, down 3.4 per cent
4 – Flutter Entertainment, down 3.3 per cent
5 – Ocado, down 2.3 per cent
Market prices
Gold – $2,030.38 per ounce, largely unchanged
Brent oil price – $77.26, up 0.59 per cent
GBP/USD – $1.2721, up 0.08 per cent
S&P 500 – up 0.18 per cent lower at 4,764.91
Nasdaq – up 0.24 per cent at 14,893.02
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