London pre-open: Stocks to slide amid global market selloff

5th Aug 2024 07:33

(Sharecast News) - London stocks were set to tumble at the open on Monday after Japan's Nikkei tanked more than 12%, continuing the selloff that began on Friday.

The FTSE 100 was called to open down around 1%, having fallen 1.3% at the end of last week after the non-farm payrolls report for July came in much weaker than expected, fuelling concerns the Federal Reserve may have made a mistake by not cutting rates last week.

Chris Beauchamp, chief market analyst at online trading platform IG, said: "Markets are in absolute turmoil this morning thanks to the Nikkei 225's biggest one-day drop since 1987, which has wiped out the index's gains for the year. Volatility as measured by the Vix is at a two-year high, as the index earns its moniker of 'the Fear Index'.

"Futures point to a torrid time for European and US markets too - the FTSE 100 is expected to open down 1% and the Dax by 2%, but it is on Wall Street where a fresh wave of selling is on the cards. Investors continue to flee tech stocks, and the Nasdaq 100 is expected to open down 1000 points lower from Friday's close, a loss of over 5%.

"This is a perfect demonstration of what happens when everyone tries to sell at once. Such moves don't stop in a single day and we likely have a summer of volatility ahead of us, particularly as we await developments in the Middle East."

In corporate news, shipping services firm Clarksons reiterated its expectations for the full year even as it posted a drop in interim profit and revenue.

In the six months to 30 June, underlying pre-tax profit fell to £51.5m from £53.1m in the same period a year earlier, with revenue down to £310.1m from £321.1m.

Clarksons said that both spot and forward business transacted in the first ahead of the same period last year in the broking division.

Chief executive Andi Case said: "I am immensely proud of everyone within the Clarksons team for delivering this strong set of results for the first half of 2024. The profile and further development of the forward order book, level of new business being transacted and pipeline for the second half, means that we have confidence that we will be second half weighted and deliver full year results in line with the board's expectations.

"This confidence has enabled the board to increase the interim dividend by 2p to 32p, continuing the progressive dividend policy into the 22nd year."

Senior reported strong first-half results, with a 7% increase in sales and a 13% rise in adjusted operating profit.

The FTSE 250 company said it secured significant contract wins in both its Aerospace and Flexonics divisions, contributing to a book-to-bill ratio of 1.15.

Its full-year outlook remains positive, with an anticipated growth in line with previous expectations, and the interim dividend was increased 25% to 0.75p.