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Precise Investors

Monday, September 26, 2022
Stocks & Shares

FTSE 100 drops on recession concerns

London share prices

The FTSE 100 was down 17.54 points, or 0.2%, at 7,532.83 and the FTSE 250 index was down 58.07 points, or 0.3%, at 19,831.47

London share prices started lower on Monday, at the start of a week expected to be dominated for markets by central bank policy.

Investors are looking ahead to a meeting of central bankers in Jackson Hole, Wyoming that starts on Thursday, with a keynote speech from Fed Chair Jerome Powell scheduled for Friday awaited for clues to the future pace and longevity of US interest rate hikes.

The message from Powell will probably be hawkish with the near-term priority to tackle high inflation, predicted Lloyds Bank. A further rise in US policy interest rates of 50bp or 75bp is expected next month.

More immediately, China’s central bank continued to move in the opposite direction from global peers, cutting interest rates to revive an economy hobbled by localised lockdowns to contain Covid-19.

The FTSE 100 was down 17.54 points, or 0.2%, at 7,532.83 early Monday. The FTSE 250 index was down 58.07 points, or 0.3%, at 19,831.47. The AIM All-Share index was down 2.23 points, or 0.2%, at 917.94.

The Cboe UK 100 index was down 0.1% at 748.81. The Cboe 250 was down 0.1% at 17,664.67. The Cboe Small Companies was flat at 14,476.24.

In Paris, the CAC 40 stock index was down 0.9%, while the DAX 40 in Frankfurt was 1.1% lower.

In the FTSE 100, Pershing Square Holdings was up 0.5%. Bill Ackman’s London-listed investment fund swung to a $3.04 billion pretax loss in the first half of 2022 from a profit of $718 million a year before, saying the six months were ‘a challenging time’ due to the geopolitical environment and inflation.

Net return in the half-year to June 30 was negative 26.0%. However, performance has improved since, bringing the year-to-date net return to August 16 to negative 10.8%.

The investment manager and the board view the decline in the market value of PSH’s portfolio year to date as a temporary dislocation resulting from market dynamics, Chair Anne Farlow said.

Vodafone was up 0.3% after the telecommunications company said it has entered into heads of terms with 4iG Public and Corvinus for the sale of Vodafone Hungary, for an enterprise value of €1.8 billion ($1.80 billion).

The company said the sale price represents a 9.1 times multiple of Vodafone Hungary’s adjusted earnings before interest, tax, depreciation and amortisation after leases for the financial year that ended March 31.

The FTSE 100 firm is targeting completion of the sale by the end of 2022. It noted that its shared services business in Hungary, VOIS, is not included in the transaction.

Conversely, oil majors BP and Shell were down 0.9% and 1.3% respectively, tracking spot oil prices lower.

Brent oil was quoted at $95.08 a barrel Monday morning, down from $96.45 late Friday.

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