The week is not looking good for the FTSE 350, amid the ongoing sterling crisis.
UK markets heading down
It finally happened. The FTSE 100 ended the day below 7,000 points on Tuesday, finishing 36 points (0.5%) down at 6,985. It had looked reasonably stable throughout the day, but took a tumble approaching market close.
Now the 7,000 barrier has been firmly broken, negative sentiment could accelerate and send the index down further on Wednesday.
The FTSE 350 dropped 30 points (0.8%) to close at 3,844.
US markets stable
Despite the UK’s upsets, US markets head into Wednesday after a calm day Tuesday.
S&P 500 stocks ended the day on 3,647 points, for a very small 8 point loss. The Nasdaq, meanwhile, is still below the 11,000 point level. But the tech stock index did recover 27 points to finish on 10,830 points.
Economic turmoil
The Bank of England has defied circulating rumours of an emergency interest rate rise. But late Tuesday, its chief economist Huw Pill said it will need a “significant monetary policy response” to protect the pound.
So maybe we won’t have to wait until November for the next interest rate decision after all. It seems certain that investors and economists will be hanging on every word we might hear on Wednesday.
Mortgage seekers will be anxious to know what’s going to happen too. A number of lenders have already pulled mortgage deals due to the uncertainty, and more could follow.
Growth share crash
Being an AIM share, it’s outside of the FTSE 350. But boohoo has been one of the most watched stocks on the London market for some time. It’s all down to its 85% crash over the past 12 months, with an extra dip at the end of Tuesday.
Wednesday brings first-half results, at a time of extreme pressure on retail shoppers. Will boohoo get back to growth? Analysts think so, though not this year. But they’re predicting a price-to-earnings (P/E) ratio for boohoo of under 10 in the next couple of years.
Dividend payments
Wednesday is interim dividend payment date for FTSE 100 insurance stock Aviva. The first-half payment of 10.3p per share is 40% higher than last year’s. But that hasn’t stopped the share price falling 22% in the last 12 months.
Interim dividends will also be on their way from Endeavour Mining and Genuit Group, both in the FTSE 250.