The FTSE 100 was down 0.3% to 7,240.4 in early afternoon trading on Thursday as the commodities-heavy index fell on miners and consumer goods, marking a downturn after the FTSE 100’s string of good luck last week.
“Overall, the FTSE 100 tried its best to push ahead at the market open, but momentum was quickly lost,” said AJ Bell investment director Russ Mould.
“Miners [and] consumer goods … dragged the market down, which is a shame after the progress made last week among large cap UK stocks.”
Ocado widens loss in HY1
Struggling online retailer Ocado saw its shares fall 3% to 750.9p after a widened interim loss and a decline in revenue was confirmed in its HY1 report.
Revenue in HY1 dropped 4.4% to £1.2 billion compared to £1.3 billion in HY1 2021, along with a pre-tax loss of £211.3 million against £27.9 million the year before.
“The significant increase in cost of living is having a significant impact on customer behaviour and will be an ongoing challenge for the remainder of the year,” said Ocado in a statement.
Oil falls
The price of oil fell as reports suggested lowered demand from US motorists at the height of summer driving season, as the cost of living continued to bite and petrol prices exceeded consumer tolerance.
Information released by the US administration on Wednesday revealed a rise in American gas inventories to 3.5 million, far in excess of the predicted 71,000 uptick.
Meanwhile, the Nord Stream 1 pipeline resumed gas exports from Russia, easing demand fears after warnings from the EU yesterday flagged concerns that Putin would withhold exports in a bid to “blackmail” Europe in response to its efforts against the war in Ukraine.
Benchmark Brent Crude oil was trading at $102 per barrel, while Shell and BP shares fell 1.4% to 2,021.2p and 1.6% to 381.9p, respectively.
Mining stocks slide
Mining stocks continued to drop as pessimism over China’s poor economic performance and recession fears led to increased worries over a lack of commodities demand.
“China is one of Asia’s key growth powerhouses,” AJ Bell financial analyst Danni Hewson told Capital.com.
“We already knew that growth expectations were being pared back, but the latest GDP figure is the sort of pedestrian number one might expect from a developed Western nation.”
“This doesn’t bode well as recession fears grow in many parts of the world, and it could fuel speculation that China’s commodities appetite may wane if economic activity is stalling.”
Anglo American shares fell 0.6% to 2,588.2p after the mining group announced weaker production in HY1, with a 17% fall in copper output to 273,000 tonnes compared to 330,000 tonnes year-on-year due to lower grades from its Los Bronces and El Solado operations.
Antofagasta shares dipped 0.1% to 1,047.2p, Endeavor slid 1.5% to 1,574.5p, Fresnillo dropped 3% to 640.7p, Glencore decreased 1.6% to 419.1p and Rio Tinto declined 0.3% to 4,676p.
Howden Joinery Group
Howden Joinery Group shares topped the FTSE 100 with a 3.8% climb to 653.4p following a reported pre-tax profit of 22% to £145 million in HY1 against the previous year.
The company’s revenue grew 16% to £913.1 million compared to £784.9 million, with the firm attributing its successful financial term to good management of economic headwinds and growth across its UK and international depots.
Financial groups rise
3i Group enjoyed a 3.8% climb to 1,242.5p after a successful Q1, including a 6.4% NAV increase to 1,406p and a total NAV return of 6.6%.
The investment group credited the strong performance of its Action holding for its positive Q1, and highlighted several key investments made over the period.
“3i has made a good start to its new financial year. Both portfolios are trading resiliently in the current environment and Action is continuing to grow at an impressive rate,” said 3i CEO Simon Borrows.
“We have already announced a number of new investments this year and executed realisations at significant premiums to their carrying values in recent months, underlining the quality of our portfolio.”
Intermediate Capital Group shares rose 2.8% to 1,456.2p on the back of a positive Q1 trading statement, with fundraising of $4.5 billion and a total AUM growth of 3% to $71.3 billion on a constant currency basis.
“The breadth of ICG’s strategies and our firm-wide focus on downside protection are powerful characteristics of our business, especially in the current environment,” said Intermediate Capital Group CEO Benoît Durteste.