- FTSE 100 down 81 points at 9,427
- Week set to end with a harrumph
- HSBC downgraded
5.17pm: Stocks sour
The FTSE 100 finished Friday’s session down 81 points at 9,427.
Stocks tumbled as Trump threatened a ‘massive’ tariff increase for China, with the Nasdaq down 1.9%, the S&P 500 down 1.5% and the Dow Jones down 1.2%.
3.30pm: Out with a whimper
The FTSE 100 looks set to end the week with a whimper, having stormed to a record high on Wednesday.
Trading in a very tight plus and minus range, it was off 12 points at 9,497.59 with just over an hour to go.
For the last five trading days, it has managed a six-point gain. A strong rally in the drugs sector has been offset by banks taking a bath.
HSBC’s $13.7 billion Hang Seng take-private has been panned, while Lloyds investors have been fretting over potential additional provisions for car finance mis-selling.
A ceasefire in the Middle East, while buoying sentiment Stateside, has done zero for the confidence of UK investors, who appear to be suffering a bout of altitude sickness.
Amid the Bank of England’s concerns that AI may be turning into a bubble, there’s been a quietly anxious undertone to the mood in London. Comments by Jamie Dimon, JPMorgan’s long-serving capo de tutti capo, seemed to add to the sense of foreboding.
Gold, having burst through $4,000, has settled just below its all-time high. Analysts at Goldman are predicting it may scale to $4.900 by the end of 2025, boosted by fund buying.
Perhaps ETF managers some inside angle on the envisaged AI implosion given the haven status of the yellow metal.
1.30pm: Wall Street set to open higher
US equity futures indexes were pointing to Wall Street opening higher at investors anticipate third-quarter earnings, which start in earnest next week.
Ahead of the open, Dow Jones futures were up 0.13%, while those for the S&P 500 and Nasdaq were up just under 0.1%
Stocks took a break from their record-setting rally on Thursday, finishing the session lower. The Dow led the declines, down 0.5%. The S&P 500 was down 0.3% and the Nasdaq slipped 0.1%.
US earnings season gets into full swing next week, with the big banks reporting their numbers. So, in the absence of economic releases as the government shutdown continues, all eyes will be on how corporate America is performing.
“Next week, US banks enter the reporting fray en masse, with updates from Citigroup, Goldman Sachs, JP Morgan Chase, Wells Fargo, Bank of America and Morgan Stanley,” commented interactive investor’s Richard Hunt.
“Overarching themes will include whether the strength of the second quarter in deal making and investment banking fees has continued, how trading income has fared given market volatility and the health of the consumer in terms of borrowing, where any signs of rising bad loans would provide a red flag on deteriorating economic conditions.”
In Europe, the FTSE 100 has recovered earlier losses and is up just 1 point as the London market heads into the afternoon. Frankfurt’s Dax has headed the other way, down less than 0.1%, while the Paris CAC 40 is 0.2% firmer.
In Asia, Tokyo’s Nikkei retreated 1% after hitting a new peak on Thursday. Hong Kong’s Hang Seng fell 1.7% and the Shanghai market ended 0.9% lower. Mumbai’s BSE SENSEX bucked the trend with a 0.4% gain, while the ASX 200 in Sydney closed 0.1% lower
12.07: HSBC deal prompts downgrade
HSBC latest move in Hong Kong has left Jefferies feeling more cautious.
The bank’s plan to buy out minority shareholders in Hang Seng Bank, at a cost of $13.7bn, may make strategic sense, but it comes with an awkward side effect: three quarters without share buybacks.
For investors used to HSBC’s steady capital returns, that is a hard pause to swallow.
Jefferies has cut its rating on the shares to ‘hold’ from ‘buy’, trimming its enthusiasm just as HSBC was hitting its stride.
Turning to the wider market, the FTSE 100 was up 4 points at 9,513.21, dragging itself out of the red.
10.15am: Defence stocks also under pressure
It’s not just gold stocks weighing on the Footsie this morning; defence shares including BAE Systems PLC (LSE:BA.) and Rolls-Royce Holdings PLC (LSE:RR.) are both down around 2.5% as tensions ease in the Middle East, with a potential deal to end the Gaza conflict. That’s also put pressure on oil shares, with the price of Brent crude retreating 0.6% to $64.81 a barrel.
“Progress towards a ceasefire in Gaza eased geopolitical risk premiums, reducing demand for defence names that had been buoyed by the conflict,” commented Scope Markets Josh Mahony.
“Meanwhile, with tensions easing, we are also seeing gold miners like Fresnillo, and energy names such as Shell lose traction.”
The FTSE 100 is now 11 points down at 9,498.70.
9.45am: Footsie lags on profit taking
The FTSE 100 continues to drift lower as Friday morning trading progresses, while other European markets are firmer. London’s blue chip index is currently 12 points lower at 9,496.94, a fall of just over 0.1%.
“Strength in consumer stocks and utilities was offset by weakness in miners and healthcare,” AJ Bell’s Russ Mould noted.
“Gold miners sold off as investors took some profits following the storming run for the metal price. There was bound to be a pullback at some point, given gold’s rapid ascent.
“It was also notable that defence stocks were being sold down, including Babcock which has rocketed this year,” Mould added.
Meanwhile, on the continent, Frankfurt’s DAX is up 0.1% while the Paris CAC 40 has gained 0.3%.
8.45am: US banks under the spotlight
US earnings season gets into full swing next week, with the big banks reporting their numbers. So, in the absence of economic releases as the government shutdown continues, all eyes will be on how corporate America is performing.
“Next week, US banks enter the reporting fray en masse, with updates from Citigroup, Goldman Sachs, JP Morgan Chase, Wells Fargo, Bank of America and Morgan Stanley,” commented interactive investor’s Richard Hunt.
“Overarching themes will include whether the strength of the second quarter in deal making and investment banking fees has continued, how trading income has fared given market volatility and the health of the consumer in terms of borrowing, where any signs of rising bad loans would provide a red flag on deteriorating economic conditions.”
8.15am: Footsie drifts lower at open
London’s FTSE 100 started Friday on the back foot, shedding 7 points to 9,502.25 in opening trades as gold retreated from its recent highs above $4,000 an ounce.
Miners, and gold miners in particular, led the loser board, with Fresnillo PLC (LSE:FRES) and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) shedding 4.2% and 3.7% respectively, while Antofagasta PLC (LSE:ANTO) and Glencore PLC (LSE:GLEN) fell 1-2%.
While the pullback in the gold price is weighing on mining shares, interactive investors’ Richard Hunter noted: “The dip does little to upset a stellar direction of travel this year, which has resulted in gains of 270% for Fresnillo and 118% for Endeavour.”
On the upside, food services company Compass Group PLC (LSE:CPG) rose 1.7%, while JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) gained 1.4%.
8am: Shoppers mark time ahead of budget
September wasn’t great for shops, with footfall dropping 1.8% compared to last year. Blame it on Budget jitters keeping wallets firmly closed, plus London Tube strikes and some pretty miserable weather didn’t help matters either.
High streets took the biggest hit, down 2.5%. The British Retail Consortium’s Helen Dickinson says retailers are struggling after last year’s £5 billion increase in employment costs. She’s hoping the Chancellor will ease business rates in the upcoming Budget to help revive struggling shopping areas.
7.15am: FTSE pauses for a breath
The FTSE 100 has been called lower again when Friday trading gets underway, extending losses since powering to a fresh high on Wednesday.
Futures for the London benchmark are pointing to a loss of 17 points, after yesterday’s 39-point slide to 9,509.
Overnight, US stocks also took a break from their record-setting rally, finishing Thursday’s session lower as earnings season kicked off amid the continuing government shutdown.
The Dow Jones led the declines, down 0.5%. The S&P 500 fell 0.3% and the Nasdaq slipped 0.1%.
It’s a similar story in Asia this morning, with Tokyo’s Nikkei retreating 0.9% after hitting a new peak a day earlier. Hong Kong’s Hang Seng is down 1.4% and the Shanghai market is 0.7% lower. Mumbai’s BSE SENSEX is bucking the trend with a 0.4% gain, while the ASX 200 in Sydney is down 0.1%.
“Markets have struggled for momentum over the last 24 hours, as investors question how long this rally can persist, whilst concern grew about an extended government shutdown in the US. So that’s meant equities saw a modest pullback,” commented Deutsche Bank’s Jim Reid.
“The fear is that the longer it lasts, the worse the economic impact will be, as increasing numbers of workers miss paychecks from here.”
