FTSE heads lower after Chinese benchmark heads into a bear market.
UK markets were guided in lower this morning after Janet Yellen’s comments spooked US and Asian equities overnight, with one Chinese benchmark entering a bear market after Goldman Sachs cut its forecast for Chinese growth.
Having come to the bulls rescue on so many occasions in the last 12 months, you could forgive traders for feeling optimistic going into yesterdays Fed statement, with the comments odds on to try and keep markets on track, but the surprise admission that US rates could go up quicker than expected caught traders of guard and sent US stocks plummeting. Having been purposefully opaque with regards to guidance on rates previously, offering a timescale seems to have given the market a dose of reality at precisely the wrong time, having been fragile over the last few weeks already.
Given the headlines, it becomes even harder to pick what investors will be taking from Jobless numbers this afternoon and what constitutes a good figure, which will likely make the build up a bit jumpy in the current environment.
Next continued their stellar 12 month run today, hitting lofty expectations for a 12% rise in profits after another year of strong growth from its online and catalogue businesses. The firm did caution on the outlook of the UK recovery, but that did little to reduce investor appetite, with the stock pushing over 1% higher to add to the 60% gains of the last 12 months and keep a tight grip on its position as the shining light of the sector.
United utilities dipped on the open despite assuring investors that it is trading in line with expectations, with revenues and underlying profits expected to come in higher than last year. In the context of 9% gains since early February, todays move is possibly just a bit of opportune profit taking in the absence of any fresh news.
“Challenging” trading conditions from the turn of the year has likely pegged Majestic wine back to flat sales for the year according to a statement today. Growth of 2.8% for the 10 week Christmas period has been offset by weak performance since, and current form seems to have spooked the market somewhat with the stock down 19% in early deals.
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