UK Stock Market News: European Markets Sink

The UK stock market traded in bearish territory today. The European stocks tumbled, as US tech giants Tesla and Alphabet failed to impress the investors with their moves. LVMH, French luxury goods retailer, also suffered, further eroding the optimistic sentiment. 

On Wednesday, the FTSE 100 index dropped by 0.5%, exchanging hands at 8,129.06. Meanwhile, the FTSE 250 shaved off 0.2%, at last trading at 21,050.19, and the AIM All-Share plunged at 778.93, lowering by 0.2%.

Furthermore, the Cboe UK 100 decreased by 0.4% at 811.48, with the Cboe Small Companies remaining flat at 17,248.12. The Cboe UK 250 resisted the trend, though. It managed to climb up slightly at 18,393.42. 

From London-listed banking shares, HSBC and Barclays each fell by 1.0%, and Standard Chartered lost 1.6%. At the same time, Scottish Mortgage Investment Trust decreased by 1.8%. The latter’s loss influenced the FTSE 100 negatively, and Burberry’s drop by 1.6% exacerbated the index’s suffering. 

Other European stocks declined, as well, with the CAC 40 in Paris dropping by 1.5%. Frankfurt’s DAX 40 shaved off 0.7% today. The US stocks also ended in the red in this session, but they fared marginally better compared to the European ones. 

The Dow Jones Industrial Average declined by 0.1%, while the S&P 500 dropped by 0.2%. At the same time, the Nasdaq Composite lowered by 0.1%. Tech stocks suffered more, with Alphabet tumbling by 2.2%, and Tesla dropping by 7.8%.

What About the Winner Stocks? 

Some shares came out winners in the UK stock market today. Among them, easyJet and Reckitt  gained the most in the FTSE 100. The first one surged forward by 6.7%, while the second one added 3.1%.

The analysts stated that easyJet seems set for breaking its high records this summer. The stock’s third-quarter earnings came out higher than expected, buoying the investors. The company’s revenue increased by 11%, hitting  £2.64 billion. On the other hand, Headline pretax rallied by 16%, reaching £236 million in the last quarter. 

The traveling firm’s CEO Johan Lundgren stated that more customers chose easyJet in the last months, driving the stock’s strong performance. 

However, the consumer goods and hygiene products maker Reckitt Benckiser’s half-year earnings were lower, and the company plans to divest some of its home care brands from its portfolio. Its list includes Calgon and Air Wick, thus far. 

In the first-half of 2024, the stock’s net revenue plummeted by 3.7%, hitting £7.17 billion. On the other hand, Pretax dropped by 7.3% to £1.52 billion.

Informa’s revenue reached £1.70 billion in the same time period, showing a 12% surge year-on-year. But Pretax reported lower profits by a quarter.

During today’s session, Nichols shares rallied by 6.8% in London. The Vimto owner announced recently that its profits increased. The company also launched a special dividend, which will return £20 million to the stockholders. 

What’s The Analysts’ Forecast For The Stock Market In The UK?

Now that you know changes in the UK stock market today – news that show its bearish trajectory, let’s see what the analysts say about its short and long term recovery. 

Currently, UK markets are following the broader bearish trend, and the indexes might recover if the investor sentiment changes. Shares fluctuate daily and move into narrow ranges, swinging up and down. 

They gain a bit today and lose these gains tomorrow. That’s why we calculate their gains or losses on a quarterly or yearly basis. That’s where the real profits show. 

So, short-term forecasts aren’t so concerning, compared to long-term predictions. If you follow the financial world’s developments, then you should already know that the UK stock markets have struggled over the last few years, ever since the country announced its decision to leave the European Union. 

The idea of Brexit was enough to cause investors to withdraw from British exchanges and move towards US stocks. Despite the UK’s economy proving its resilience and strength throughout the Brexit process, this trend of favoring US markets continues.

The government and regulators are working hard to revitalise its exchanges. Unfortunately, some firms are disappearing and new ones that appear aren’t enough to replace the lost ones. Consequently, the market is shrinking alarmingly fast. 

Moreover, UK stocks are currently trading at a discount compared to their international rivals. That’s partly because the British indexes include lowly rated sectors. For example, the FTSE 100 unites banks and various resources, but it lacks tech stocks, which are highly rated. Comparatively, Tech earnings significantly boost US stocks. 

Will The UK Market Recover? 

Despite the recent UK stock market news, some analysts believe that the wind is changing at last and the UK stock exchanges are reviving, with more traders returning to the British assets. While these signs are tentative for now, it might change in the near future. 

IPO activity is on the rise, attracting new investors. Despite this, the FTSE All-Share index remains 11% lower compared to its international peers.

Besides, major investors are setting their sights on London’s stock market, anticipating that soaring economy, political stability and lower interest rates will create a good climate for investment growth. 

International asset managers have recently joined fund houses (Rathbones, Ruffer, etc.) in the United Kingdom. Among them are BlackRock and Allianz. 

After several years of underperforming compared to US and European markets, UK share prices are now on the rise. Investors and traders are finding UK valuations more attractive, signaling a positive shift in market sentiment.

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