London midday: Stocks slip on political uncertainty, US data

10th Jun 2024 11:52

(Sharecast News) - Political instability in Europe hit market sentiment on Monday, with the UK's FTSE 100 falling to its lowest in nearly two weeks, dampened further by speculation that Ashtead could become the latest blue chip to leave the London market.

Stocks were also extending losses made on Friday after the much stronger-than-expected US employment report for May.

"A sea of red has greeted traders in Europe, as the repercussions of Friday's US jobs report continue to ripple throughout financial markets. Good news clearly remains bad news for markets, with a bumper 272k payrolls figure serving to shift rate expectations that has swung back in favour of a September pause from the Fed," said analyst Joshua Mahony from Scope Markets.

Just before midday, the FTSE 100 was down 0.34% at 8,217.28. Nevertheless, losses in London were not as pronounced as those in Europe, with the Cac 40 in Paris down 1.8% and other regional indices trading around 0.7-0.9% lower, investors reacted to the advance of far-right anti-immigrant political parties in European Parliament elections. French President Emmanuel Macron called a snap poll in response to his party suffering a heavy defeat.

"For a fiscally challenged France, new parliamentary elections add a level of uncertainty. This could turn into a concern for markets," said analyst Holger Schmieding at Berenberg.

No major economic releases were scheduled in the UK while in the US the market spotlight would be on the results of a trio of Treasury debt auctions.

Meanwhile, US stock futures were pointing to a negative start on Wall Street ahead of the Federal Reserve's policy meeting on Wednesday - though no change is expected. Tech giant Apple will likely to be in focus ahead the start of its five-day Worldwide Developers Conference or WWDC, with chief executive Tim Cook tipped to give some big AI-related announcements at his keynote speech on Monday.

Ashtead making headlines

Ashtead was lower by midday, giving up earlier gains, amid speculation that the equipment rental firm is considering transferring its listing to the US, where it generates the bulk of its revenues.

AJ Bell investment director Russ Mould, said "no-one will want to see the company switch its listing to New York, especially as the firm is just one of 18 in the UK's elite index that can point to a record of growing its dividend every year for at least a decade".

However, he pointed out that there are "many good reasons" why firms might switch their listing to overseas. "They may have a lot of staff there and incentivising them with US-listed shares or options on them could be simpler for a host of reasons, including tax and currencies. They may wish to have US-listed stock available to them as a currency for making acquisitions. And they may simply have a substantial portion of their business there. This is very definitely the case with Ashtead."

ME Group International fell sharply despite reporting a positive first-half trading performance, with a 4.6% increase in group revenue and a 10.3% rise in profit before tax compared to the same time last year, driven by growth in its photobooth and laundry operations.

Chemring gained after signing a 15-year deal partnering deal with US defence firm Northrop Grumman for the supply of HMX energetic material used in its missile programmes along with an order for the product worth $83m as demand for military weapons increased globally.

Market Movers

FTSE 100 (UKX) 8,217.28 -0.34%

FTSE 250 (MCX) 20,481.99 -0.36%

techMARK (TASX) 4,832.12 -0.23%

FTSE 100 - Risers

M&G (MNG) 203.60p 2.67%

Pershing Square Holdings Ltd NPV (PSH) 4,314.00p 2.08%

Rolls-Royce Holdings (RR.) 465.20p 1.82%

Intermediate Capital Group (ICG) 2,256.00p 1.17%

CRH (CDI) (CRH) 6,132.00p 0.86%

Antofagasta (ANTO) 2,161.00p 0.75%

BAE Systems (BA.) 1,405.00p 0.72%

BP (BP.) 465.85p 0.68%

Flutter Entertainment (DI) (FLTR) 14,885.00p 0.51%

National Grid (NG.) 873.40p 0.48%

FTSE 100 - Fallers

Smith (DS) (SMDS) 362.00p -2.27%

Rentokil Initial (RTO) 412.00p -2.23%

Entain (ENT) 701.20p -2.12%

NATWEST GROUP (NWG) 310.50p -2.02%

Barclays (BARC) 212.95p -1.98%

Admiral Group (ADM) 2,677.00p -1.94%

Smurfit Kappa Group (CDI) (SKG) 3,640.00p -1.73%

Ocado Group (OCDO) 356.40p -1.63%

Reckitt Benckiser Group (RKT) 4,436.00p -1.55%

St James's Place (STJ) 513.00p -1.54%

FTSE 250 - Risers

Just Group (JUST) 104.40p 3.37%

ICG Enterprise Trust (ICGT) 1,248.00p 2.13%

Hargreaves Lansdown (HL.) 1,080.00p 2.03%

Harbour Energy (HBR) 309.10p 1.91%

Petershill Partners (PHLL) 210.50p 1.69%

Great Portland Estates (GPE) 345.00p 1.62%

Indivior (INDV) 1,297.00p 1.41%

Syncona Limited NPV (SYNC) 109.60p 1.29%

Asia Dragon Trust (DGN) 405.00p 1.25%

Paragon Banking Group (PAG) 756.50p 1.20%

FTSE 250 - Fallers

Me Group International (MEGP) 162.40p -4.69%

W.A.G Payment Solutions (WPS) 69.20p -3.89%

Aston Martin Lagonda Global Holdings (AML) 159.40p -2.80%

Hochschild Mining (HOC) 176.20p -2.65%

Crest Nicholson Holdings (CRST) 243.20p -2.64%

Ferrexpo (FXPO) 45.00p -2.17%

TP Icap Group (TCAP) 204.00p -1.92%

Elementis (ELM) 143.80p -1.78%

Foresight Group Holdings Limited NPV (FSG) 450.00p -1.75%

Hiscox Limited (DI) (HSX) 1,133.00p -1.73%