The FTSE 100 was marginally weaker on Wednesday as Sainsbury’s, banks, and other retailers weighed on the index.
London’s leading index had started the session broadly flat, but minor gains gave way to minor losses, and the FTSE 100 was down 0.2% at the time of writing.
“Miners did their best to prop up the FTSE 100, but opposing forces from the banking, pharma and utility sectors were too great to keep the index in positive territory,” said Dan Coatsworth, head of markets at AJ Bell.
“Hong Kong’s Hang Seng index was a notable mover, falling 1.3% as nearly all sectors apart from basic materials and industrials were in the red. China’s CSI 300 index was also weak, with both indices hit by disappointing services data.”
China-focused banks HSBC and Standard Chartered were among the top fallers as sentiment took a knock.
Investors may have been surprised to see miners such as Anglo American, Antofagasta, and Glencore among the top risers, given their dependence on Chinese demand. Antofagasta was the top riser after Jefferies analysts raised their price target to 3,500p.
Sainsbury’s was the FTSE 100’s top faller after Qatar sold a £270m stake in the business. Sainsbury’s shares fell 3.7% with Tesco and Marks and Spencer falling between 1% and 2% in sympathy.
“The stock has enjoyed a good run since April, thanks to business progress. A food-first strategy has reaped significant rewards and Sainsbury’s has managed to breathe new life into the business,” Coatsworth explained.
“QIA might take the view that now is a good time to cut its exposure as Sainsbury’s regaining its mojo is one thing, taking it to another level is more challenging.”
US rate cut
US stocks were also relatively subdued overnight, with the S&P 500 gaining just 0.2% despite a strong run-up in tech shares.
Support is creeping back into US stocks as traders eye a possible US rate cut. But this has yet to translate to any meaningful optimism in UK and European shares.
That said, ff hopes of a rate cut solidify in the coming sessions, it wouldn’t be a surpirse to see global stocks melt up into the announcement next week.
“Recent data continues to support the narrative of a soft landing in the US economy – a delicate balance between slowing growth alongside resilience in the US labour market,” explained Oliver Faizallah, Head of Fixed Income Research at Charles Stanley, part of Raymond James Wealth Management.
“This backdrop has given the US central bank the Federal Reserve room to ease policy, with markets now fully pricing in a 25bps rate cut at next week’s meeting, a sharp shift from just 30% odds a month ago. The move reflects both supportive economic indicators, dovish Fed commentary, and speculation around future leadership.”