The FTSE 350 faltered on Tuesday. And European markets ended the day in the red, as we head into a week of interest rate decisions and a UK mini budget.
UK stock market decline
The FTSE 100 dropped 44 points, or 0.6%, on Tuesday to end the day at 7,193 points. A 0.7% decline took the FTSE 350 down 29 points, to finish at 3,981.
With very little company news on Wednesday, investors may have their thoughts fixed on where central banks are likely to peg their interest rates when their next decisions come around.
In the UK, we’ll have to wait until Thursday. The general expectation is for a 0.5% rise, but some are predicting a 0.75% hike as inflation could soon head back into double digits.
US interest fears
US stocks followed Europe’s lead and headed lower Tuesday. American inflation in August has already come in higher than expected. And as a result, many will be expecting trading to be muted when the market reopens Wednesday.
The S&P 500 dropped 44 points, or 1.1%, Tuesday, giving up Monday’s 27-point gain. The Nasdaq fell back too, with a 110 point (1%) drop following on from an 87 point gain on Monday.
The S&P is now down 6.2% since inflation figures were revealed. Nasdaq stocks have lost 6.9%. We’ll have to see if the gloom is contagious and infects UK markets Wednesday.
Supermarket results
Full-year results from Supermarket Income REIT are due Wednesday, and it’s an interesting real estate investment trust. The company invests in supermarket properties, and owns sites operated by Tesco, Sainsbury and Marks & Spencer, among others.
A company like this offers investors a different entry into the groceries retail business rather than buying supermarket shares for their direct profits. It also means there’s no need to choose which individual supermarket chain to go for.
Dividend cash
Shareholders have some cash coming their way Wednesday, as Domino’s Pizza Group reaches its first-half dividend payment date. A 6.7% increase will send 3.2p per share their way. The company is also buying back shares.
It’s interim dividend payment date for OSB Group too, with a 78% hike to 8.7p. And there’s another share buyback here.
Economics
Ahead of Thursday’s big interest rate news, Wednesday brings us an update on the state of the UK’s public sector net borrowing. That’s likely to be quickly overshadowed by the new chancellor’s mini-budget due Friday, which is expected to pump up borrowing further.