Interactive Investor

FTSE 100 stocks hurt badly: biggest fallers revealed

Responding to an overnight sell-off on Wall Street, UK blue-chip shares fell to their lowest in over three weeks. City writer Graeme Evans assesses the damage.

16th April 2024 13:48

by Graeme Evans from interactive investor

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A crowded FTSE 100 fallers board today included Marks & Spencer Group (LSE:MKS) and Lloyds Banking Group (LSE:LLOY) as UK labour market uncertainty added to worries blowing in from Wall Street.

The risk-off mood, which was replicated across Europe after Monday’s technology-led slump for US markets, left London’s top flight 1.4% or 107 points lower at 7,858 at lunchtime Tuesday.

Glencore (LSE:GLEN) and Rio Tinto Registered Shares (LSE:RIO) were among mining stocks 2% or more lower after the dollar rose to near a five-month high on expectations that US interest rates will stay elevated this year.

As most commodities are priced in dollars, the recent increase has the potential to suppress demand by making products more expensive in local currency terms.

Even China’s robust first-quarter GDP figure of 5.3% and the support of mining industry analysts at Barclays failed to lighten the mood in the sector.

Barclays now values Anglo American (LSE:AAL) at 2,715p but shares fell 77p to 2,092p, while Glencore dropped 12.95p to 468.7p compared with a 515p target.

The biggest fallers in the FTSE 100 were Pershing Square Holdings Ord GBP (LSE:PSH) and Scottish Mortgage Ord (LSE:SMT) Investment Trust after last night’s bruising session for US technology stocks.

The latter’s decline of 30.8p to 835.4p erased some of the recovery seen since it pledged £1 billion of buybacks in an effort to address the gap to its net asset value.

About 3% of its portfolio is invested in Tesla Inc (NASDAQ:TSLA), which has now lost 35% of its value this year after last night’s disclosure of thousands of job cuts in the face of Chinese competition.

Semiconductor giant NVIDIA Corp (NASDAQ:NVDA), which accounts for 8% of the trust’s assets as the joint biggest holding, fell 3% as US traders worried that US rates could stay on hold until December.

Alphabet Inc Class A (NASDAQ:GOOGL) backer Pershing Square, meanwhile, saw the gap to its net asset value of 5405p widen with a fall of 128p to 3876p.

Other stocks impacted by the weaker sentiment included Rolls-Royce Holdings (LSE:RR.), which retreated below 400p at one point, and the car retail platform Auto Trader Group (LSE:AUTO) after a fall of 19.4p to 673.8p.

Lloyds dropped 1.3p to 49.8p, a performance not helped by the surprise jump in the UK unemployment rate to 4.2% from the 3.9% seen in the previous three-month period.

The shares were near 54p earlier this month, up from February’s 41p after the outlook was boosted by hopes for lower interest rates and a return to economic growth.

As well as fears over how a weaker jobs market might affect the health of its loan book, today’s wage growth figures dealt a blow to prospects of stimulus through a near-term cut in borrowing costs. Lloyds is due to present first-quarter results on Wednesday 24 April.

NatWest Group (LSE:NWG), which presents figures on 26 April, fell 5.8p to 271p but is more than 20% higher over the year to date. Barclays (LSE:BARC) lost 2.9p to 180.2p.

The economic and consumer spending uncertainty also dented another UK bellwether in retailer Marks & Spencer, which fell 5.1p to 249.1p.

Defensive stocks including Centrica (LSE:CNA), Severn Trent (LSE:SVT) and Smith & Nephew (LSE:SN.) dominated a shortened risers board, while AstraZeneca (LSE:AZN) was just 74p lower at 10,950p after Deutsche Bank removed its “Sell” recommendation and Barclays upped its price target to 13,000p.

Car insurer Admiral Group (LSE:ADM) also got City backing as RBC Capital disclosed a new price estimate of 3,400p. Shares were 16p lower at 2,695p today.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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